PUT your foot down in a Tesla Model S and the experience is rather different to other cars. The usual exhaust roar is replaced by a hushed whooshing sound as the car accelerates rapidly—and relentlessly—thanks to the high torque of an electric motor making gear changes unnecessary because there is no gearbox. And inside, instead of multiple dials and switches, a large touchscreen dominates the centre console. Established carmakers have tended to make modest electric vehicles, usually small ones to eke out the range available from their pricey batteries. But it was Tesla, a Silicon Valley startup, which realised that many early adopters of new technologies are likely to be well heeled and would prefer a large high-performance saloon that is both luxurious and extremely high-tech.

Why did Tesla act differently? For a start, it does not think of itself as a carmaker. “I see us more as an energy-innovation company,” says Jeffrey “JB” Straubel, the firm’s chief technology officer, and one of the co-founders of Tesla, along with Elon Musk, the chief executive. “If we can reduce energy-storage prices, it’s the most important thing we can do to make electric vehicles more prevalent,” says Mr Straubel. “Add in renewable power and I have a direct line of sight towards an entire economy that doesn’t need fossil fuels and doesn’t need to pay more to do it.”

Mr Straubel’s captivation with energy storage is understandable. He is cagey about the exact cost of the lithium-ion (Li-ion) battery pack powering the Model S, but it is believed to represent around a quarter of the $70,000 starting price of the basic version. A smaller car, the Model 3, is due in 2017. Although the new car will have some self-driving features like the Model S, it is aimed more at the mass-market. But to hit the Model 3’s expected price of around $35,000, Mr Straubel now needs to reduce the cost of his battery packs by at least a third.

The best way to do that and to meet expected demand, Mr Straubel believes, is for Tesla to make its own batteries. And to make them big time. This is why he and Mr Musk are gambling on building a $5 billion “gigafactory” in Nevada in a joint venture with Panasonic, a Japanese battery supplier. By 2020 the gigafactory is set to produce as many Li-ion batteries as the entire world used this year.

“One lunch was the beginning of what eventually became Tesla”

The determination to act boldly and independently has worked for Mr Straubel in the past. When researching a charging system for the Model S he rejected existing industry standards because they delivered too little power. And instead of waiting for an agreement with other carmakers for a universal recharging plug, he designed his own proprietary connector. The company’s Superchargers, which provide free recharging in public locations to Tesla owners, can top up a battery to about 80% of capacity in 40 minutes. These now comprise the largest fast-charging network in the world.

Mr Straubel also takes a different view on the batteries themselves. Whereas most manufacturers of electric vehicles have opted for large-format batteries, both the Model S and its predecessor, the Tesla Roadster, are powered by around 7,000 individual Li-ion cells. The Roadster’s were originally the standard Li-ion cells widely used in industry and found in devices such as laptop computers. For the Model S, however, the cells have been significantly redesigned. Mounted inside a battery pack, the cells are interconnected and interwoven with liquid cooling systems to prevent fires in the event of an accident (damage resulting in short circuits and faulty charging can cause Li-ion batteries to burst into flame).

The electric Porsche

Teslas were always going to be unique. Mr Straubel, who is 38, made his first full-sized electric vehicle 14 years ago (a golf cart which he resurrected at the age of 14 doesn’t count). This was a 1984 Porsche 944 fitted with twin electric motors and 380kg of old-fashioned lead-acid batteries: a weighty proposition, but one that went on to become the fastest electric car in the world at a drag-racing event in California.

“I love immersive experiences where you’re engaged with the thing that you’re engineering. If you are driving, riding or flying it, it’s even more exciting and fun,” says Mr Straubel, who holds a private pilot’s licence. After graduating with a master’s degree in energy engineering from Stanford University, he worked with Harold Rosen (the designer of the first geosynchronous satellite) on a novel hybrid-drive system for cars. This used a turbine to generate electricity and a fast-moving flywheel to store and release kinetic energy when needed. Although the innovative combination worked, it was a leap too far for conservative carmakers, which declined to invest in it. Nevertheless, the pair licensed the technology to a company that makes flywheels for commercial vehicles. Mr Straubel and Mr Rosen went on to build a hydrogen-powered electric engine for aircraft, which was subsequently licensed to Boeing.

It was then that Mr Straubel met Mr Musk, a freshly minted multimillionaire from the sale of his PayPal digital-payments company to eBay. “One lunch was the beginning of what eventually became Tesla,” says Mr Straubel. “We spent most of the meal talking about electric aeroplanes. But as we were wrapping up, I said I was working on a fun crazy project with cars, trying to build a lithium-ion battery pack that could last 1,000 miles.”

That dream is still some way off. The Model 3 is likely to have a range of 322km (200 miles) compared with the 440km claimed for a top-of-the-line Model S. But with Tesla intending to sell ten times as many Model 3s, the need for a reliable battery supplier is paramount. Hence the gigafactory. Tesla will have to innovate in battery chemistry and manufacturing techniques even as it ramps up production. Although the new cells are likely to remain small, their exact specifications are still undecided.

Mr Straubel insists that this strategy is less risky than it might seem. He notes that Model S cells today are produced on equipment very similar to that used for the Roadster cells almost ten years ago, even though the energy from the cells has increased by half and their chemistry has changed substantially. The Roadster cells used cobalt oxide as a cathode whereas the Model S uses a nickel-cobalt-aluminium oxide. The difference, says Mr Straubel, is a much improved energy density, a longer lifetime and a higher operating temperature (which means less cooling is required). Besides the chemistry, Tesla is also developing other new features for the batteries.

The idea is that, benefiting from economies of scale, the gigafactory’s cells will be significantly cheaper than those from more established manufacturers. “Over the next ten years, it’s going to change to the point where we’re focused on production to meet the world’s energy-storage needs rather than waiting for a cost reduction from a radical change in battery technology,” says Mr Straubel.

Not everyone agrees. A report by Lux Research, a firm of technology analysts, has predicted that the gigafactory will bring about only a modest cut in battery costs and suffer more than 50% overcapacity. “Most other companies do not believe that battery volume will grow as fast as it’s going to,” Mr Straubel counters. “They don’t understand the tight linkage between cost and volume. We’re at this crossing-point where a small reduction in cost is going to result in a ridiculously big increase in volume, because the auto industry is so big.”

Not all the cells made by the gigafactory are destined for vehicles. Some will end up in the company’s Superchargers, allowing Tesla to cope with sudden bursts of demand should multiple vehicles need to recharge at once. Others will be used at Tesla’s assembly plants to store energy when it is cheap, typically at night, and release it when the price rises.

Keeping the lights on

The use of batteries to store renewable power (see article) may provide Tesla with its biggest opportunity in the years ahead. The potential is huge, says Mr Straubel. “The economics in many cases have already crossed a threshold where battery packs can effectively store renewables on a very big scale.” The main problem with renewable-power sources, such as wind or solar, is that the wind does not always blow or the sun shine when demand for electricity is high. This requires utility companies to maintain additional power stations, usually running on fossil fuels, to meet the shortfall. Batteries, however, could store the power from renewables when it is generated and release it when needed.

Around 1,000 households in California already have a Tesla battery pack installed alongside photovoltaic panels leased from Solar City, another company owned by Mr Musk. The battery packs allow householders to run appliances if the power goes out or switch when electricity prices are high. But they are also designed to maximise the return from “net metering” rules that allow residential customers to sell excess energy to utilities.

Tesla’s residential batteries have been plagued by interconnection problems with utilities and are not being adopted as swiftly as Mr Straubel had hoped. “Utilities tend to be very conservative by nature,” he says. Nevertheless, Mr Straubel thinks that favourable economics will persuade utilities of the benefits.

As batteries improve in terms of safety and the amount of energy they can store, this will allow new electrically powered products to be produced, reckons Mr Straubel, returning to another of his interests: “In the foreseeable future, electric aeroplanes become an interesting and pretty compelling proposition.” A variety of small electric aircraft have been built in America, China and Europe. Airbus recently set up a subsidiary in France to build a two-seater pilot-training aircraft called the E-Fan. It is powered by electric motors driving a pair of ducted fans on either side of the rear fuselage. The European aerospace giant is also looking at the potential of building an electric helicopter and a 90-seat electrically powered passenger plane for short journeys.

A number of developments are under way which have the potential to boost the amount of energy a battery can store. For instance, a team at Stanford University is investigating enclosing the lithium-based anodes used by Li-ion batteries in a thin film of carbon “nanospheres”. This would allow more lithium to be used safely in the anode (it is lithium’s high chemical reactivity that puts the batteries at risk of catching fire). The coating, researchers think, would allow a Li-ion battery to hold about five times as much energy as those used today, weight-for-weight.

Such innovations are still at the laboratory stage and remain some way from commercial reality. In time, perhaps, even lithium may be replaced by more exotic new materials in batteries. “No one wishes we could come up with a technology that makes today’s chemistry obsolete more than me,” says Mr Straubel. “We could sell more cars at a lower price. But we’re not waiting.”