Elon Musk wants Tesla to make home heat pumps

(Bloomberg) –Any Tesla fans expecting an auto announcement at Wednesday’s investor day were likely disappointed: The company shared little new information about forthcoming car models. But Elon Musk and his executive team did offer a tidbit of information about a different technology of interest to Tesla — heat pumps. 

Musk opened the event at Tesla’s Austin, Texas, headquarters by laying out what the company believes is required to eliminate fossil fuels, from powering the grid with wind and solar to utilizing heat pumps, adding that Tesla may start making heat pumps for homes. “Earth will move to a sustainable energy economy,” Musk told the assembled crowd. “And it will happen in your lifetime.” 

This is far from the first time Musk has talked about heat pumps, an electric heating technology that works a bit like a refrigerator in reverse. Heat pumps are already installed in Tesla’s Model Y SUV and in newer versions of the company’s other models. In 2020, Musk sang the praises of Tesla’s in-car heat pump, telling investors on an earnings call that it was key to the Model Y’s superior range. “This is especially excellent at low-temperature driving. And the feedback we’re getting from customers who have received the Model Y thus far has been universally positive,” he said, adding that he was “extremely excited” to build a home heating, ventilation and air-conditioning system that could include particle filtration. 

Home heat pumps, which could reduce global carbon dioxide emissions by at least 500 million tonnes by 2030, are having a bit of a moment. Installations exploded last year in Europe as Russia’s invasion of Ukraine led countries such as Poland to rapidly ramp up their heat pump programs. In the UK, there’s a heat pump price war underway, prompted by two of the country’s biggest utilities competing to match the cost of a gas boiler. 

In the US, the Inflation Reduction Act offers incentives for households to install a heat pump, which is expected to boost the market. Demand is growing by 10% year-on-year, said Drew Baglino, Tesla’s senior vice president of powertrain and energy engineering, at Wednesday’s event. Baglino characterized heat pumps as key to the energy transition. “It’s about displacing all the fossil fuel heating that we can,” he said.

When used in electric vehicles, heat pumps can add to range because they’re more efficient than the resistive heating traditionally used to warm homes and cars. Rather than using one unit of power to make one unit of heat, they can provide two or three. But Tesla has also struggled to implement the technology in its cars. Last year, the company issued a recall to fix poor windshield defrosting and cabin heating, which affected some 26,000 Teslas, particularly in very cold weather. 

Heat pumps’ efficiency is also their selling point in homes: Long-term, they offer lower heating and cooling costs, and put less strain on the electricity grid. Still, Tesla would have it work cut out for it. Home heat pumps are a more complex install than traditional gas or oil boilers. They must be sized correctly and installed properly, in a process that should ideally be tailored to the size and insulation levels of the property. Even if the company produced a high-quality, well-priced heat pump, it would have to find qualified installers and engineers to get it into people’s homes, and those are lacking on both sides of the Atlantic. Installation problems have already hamstrung Tesla’s ambitions for a market-leading solar offering.

But the potential upside for Tesla is enormous. Locking in heat pump customers would bolster the company’s push for its own “walled garden,” in which a home’s entirely-Tesla technology — electric car, solar panels, Powerwall battery and heat pump — could stay seamlessly connected. Smart-home technology that lets users get the most out of their green gadgets (soaking up solar energy during the day and storing it for use in heat pumps and chargers overnight, for example) may prove key to avoiding overloading the grid in a world more reliant on electricity.

“It really becomes quite a compelling solution to the consumer where you integrate the electric vehicles’ charging, solar energy storage, hot water, HVAC, in a very tight compact package that also looks good,” Musk said on a 2021 investor call. “It just doesn’t exist.” 

–With assistance from Craig Trudell.

To contact the author of this story:

Olivia Rudgard in London at orudgard@bloomberg.net