Tesla doubles down on solar
Using uncertainty to generate future revenues - and profit
Tesla Energy has caught the market napping, by announcing a unilateral doubling of the power warranties on its solar panels and tiles. Previous power production guarantees were an industry matching 25 years on panels and 30 years on solar roof tiles. Now Tesla has doubled that to 50 and 60 years respectively.
Competitors are nonplussed. “No one will buy a panel that has only 25 years power life now,” says an influencer for a leading Chinese solar module manufacturer. “We’re basically ruined, unless we can come up with something new, or cut our production cost by two thirds. It’s impossible!”
Grinning broadly while making the announcement, Elon Musk provides a hint as to how this breakthrough was ‘engineered’. “We know all there is to know about current solar technology,” he quips, “but there are unknown unknowns out there, in the future, that will give us much better efficiency and longevity. So we’re betting on the future, and will replace our proprietary panels at our own cost, if necessary!”
By charging a significant premium for today’s technology, Tesla is locking in big profits that they can pump into R&D, ensuring a future where they not only dominate this space, but become the most profitable in the process. Just like Apple did with smartphones.
Not many people have the courage to bet on uncertainty, but Musk understands the power of selling an ‘impossible dream’ to customers. “It’s like Moore’s Law on steroids, and we’re taking that to the bank!”
Warning: Hazardous thinking at work
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