Elon Musk’s tender to acquire Solar City may be fraught with risk and some say insurmountable challenges, but this vertical integration play demonstrates a broader trend in clean energy. If the deal goes through, it could become a seminal business school case that’s instructive for generations to come.
There is value to be derived from the integrated home energy sales proposition. Each product in the Tesla EV/ Powerwall/ Solar triumvirate adds value to the next. Why buy a Tesla if you’re going to power it with your grandpa’s energy? Now consumers who buy the more moderately priced Model 3 (available in 2017) will be able to procure a lifetime of clean energy at the same time, and store that energy for use throughout their household in their very own Powerwall.
Musk is betting that the combined power of this integrated value proposition will be enough to motivate a whole new wave of consumers to move from thinking that EVs are a nice idea, to acting on purchasing an entirely new, self-reliant electric system that happens to include a car. It’s a big gamble. But if it works it will be transformative in the same way that Apple reimagined cell phones and well, just about everything else.
A Holy Trinity of Branding Opportunity
It’s massively more efficient to market a full suite of home energy services and products under the Tesla name than marketing each product under separate brand names. Granted, there are hurdles to be scaled in terms of consumer education for each product, but the combined offering is orders of magnitude more powerful when sold together.
Not to get ahead of ourselves, but it will be interesting to see how Tesla markets this as yet unnamed product offering – will it be a message of freedom from the grid and Old Man Oil? Or bottom-line, absolute cost savings with an environmental bonus?
Either way, the clean energy industry stands to benefit from this potentially big brand moment. This is a generational opportunity to finally capture the hearts and minds of consumers with an aspirational message. Like Henry Ford, Musk is making it acceptable for the masses to embrace an entirely new way of consuming. And like thousands of carmakers and dealers and suppliers throughout the automotive supply chain, the entire clean energy industry stands to benefit from it.
By dramatically moving the needle on clean energy adoption, Tesla will make it possible for individual consumers to be instrumental in driving the transformation of the entire energy industry.
What a great time it is to be in clean energy. Wouldn’t you agree?