August 2020
The future is here, it’s just not evenly distributed: the known cause of and solution to the climate crisis
Sustainability has been all the rage in early stage investing circles over the past year, though it’s not clear this is necessarily an early stage type problem to solve.
When thinking about how to advance the efforts of decarbonization / climate change / sustainability, it’s important to think about where this problem comes from. More than half of our greenhouse gas emissions come from two sources: transportation and electricity.
Fortunately, we know how to solve these issues and there is market demand for the solutions that exist today. The problem is that supply chain bottlenecks are preventing us from deploying these solutions faster.
Clean transportation and electricity are the two core problems that Tesla is working to solve. Given the current state of these products and markets, the faster path to impact is to double down on the winner here and help them blitzscale rather than taking the technology risk of trying to invent superior ways to solve these problems.
This is reinforced by the fact that these industries are subject to feedback loops that could allow us to dramatically cut carbon emissions over the next two decades by accelerating Tesla’s path to market dominance.
The feedback loops that will accelerate the decline of greenhouse gas emissions
There are two core feedback loops that will help Tesla blitzscale over the next decade: (1) the electric utility death spiral and (2) the gas station death spiral. The electric utility death spiral is already underway in some geographies, the gas station death spiral is still theoretical, but could prove powerful once it gets going.
The electric utility death spiral