Comparing Tesla Master Plan 3 with Rockefeller's Standard Oil | NextBigFuture.com

John Rockefeller and Standard Oil created a new oil based economy. There are a lot of similarities with what Elon And Tesla are doing. Rockefeller was laser focused on reducing costs and waste. Rockefeller used a lot of vertical and horizontal integration to reduce costs.

Deep Technology like nuclear fusion, molecular nanotechnology and reusable rockets will create entire new industries. This is an opportunity and many challenges. It is important to look at the historical creation of foundational giant industries and supply chains. There are also more recent examples of the creation of the internet, electric cars and nuclear fission power.

There are puzzle pieces and steps to create an entire industry and a new economy: 1. From Science into Engineering 2. Engineering into Products 3. Products into Business 4. Business into scaled industry 5. Making the scaled industry involves scaling markets and supply chain

Here is how John D. Rockefeller (Standard Oil) created parts of the oil industry and dominated the oil industry broken into the Industry creation steps. Tesla is creating a new electric economy with Master Plan 3. It is also useful in analyzing how potential new technology like nuclear fusion, AI and reusable rockets could become successful to create new industries.

1. From Science into Engineering.

Standard Oil developed new chemistry to develop oil cracking, creating oil byproducts and various aspects of refining. A refinery is a production facility composed of a group of chemical engineering unit processes and unit operations refining certain materials or converting raw material into products of value. Copper Oxides were used to remove sulfur from Ohio oil. Standard Oil pioneered the process of treating the wood in a kiln to prevent leaking. Standard Oil developed a kerosene that could be produced with 20% of the sulfuric acid used by competitors, thus greatly reducing costs of production.

Tesla developed and pioneered new steel alloys. These are used to enable single large part casting in new gigapresses.

Tesla is developing new battery chemistries. They have been developing the dry electrode process which they originally purchased from Maxwell Technologies.

Tesla has been developing AI for self driving and driver assist.

2. Engineering into Products

Standard Oil built 90% of the refineries at its peak. They made more efficient and larger. Oil was refined into kerosene and then into lubricating oil, gasoline, tar and paraffin.

Tesla has take software and engineering to enable new products and improved factories.

The electric grid is the largest and most complex machine ever built. It’s an amazing feat of engineering providing reliable, safe, and on-demand power. This grid is built on 20th-century technology with large, centralized generation, mostly fossil fuel-based and only a few points of control. Replacing it with solar, wind and batteries is a huge and complicated challenge. There is the first challenge of making the new systems cheaper and more profitable but also more reliable. There is a lot of engineering and products needed for this.

In 2020, Tesla Autobidder was launched. It is a real-time trading and control platform for energy assets, like Tesla’s Powerpacks, Powerwalls, and Megapacks, optimized through machine learning to better use and more directly monetize the assets.

Tesla Powerhub is a monitoring system for energy assets.

Tesla’s Opticaster is an intelligent software designed to maximize economic benefits and sustainability objectives for distributed energy resources.

Tesla Virtual Machine Mode is designed to address stability challenges by virtually emulating mechanical inertia. As more wind and solar power replace fossil fuel generation, less mechanical inertia is available on the grid, removing a natural stability buffer in the case of a grid disturbance. Megapack’s built-in inverters with Virtual Machine Mode create grid-forming dynamics that provide grid strength, respond to added and rejected loads and maintain quality voltage at the point of interconnection. In South Australia, the Hornsdale Power Reserve alone can provide up to 3,000 megawatt-seconds of inertia by using Virtual Machine Mode — roughly half of the state’s entire inertia needs.

Tesla’s Virtual Power Plant (VPP) architecture. A VPP is a network of distributed energy-resources (often solar, wind, batteries) that are aggregated to provide smarter and more flexible power generation, distribution, and availability. Tesla’s VPP consists of vertically integrated hardware and software, including both cloud and edge computing.

Joe Justice worked at Tesla and describes all of the engineering and other innovations in Tesla factories and company operations. Tesla has digital self management for real-time testing of all changes in the factory. A new part of process can be added and tested immediately to confirm it is up to standard and road-legal immediately.

There is factory mode where the digital display and computer in the car will immediately start testing components to be sure they were attached and installed properly.

There is three dimensional flow in Tesla factories. Tesla’s Austin Factory has been architected with 3D agile cells. Each hexagonal agile cell can send product from the cell to any other adjacent cell. The cells are connecting in 3 dimensions. Cells can be beside in two dimensions but they can also be above or below. There are multiple workgroups each in their own cell.

Tesla Austin has been made extra space so that multiple innovative steps can be added between cells.

Tesla will be creating the GigaMexico factory with a new Teslabot focused unboxed process.

The car is built up in parallel subassemblies. The subassembly bodies have room to assemble at the same time. The Teslabot will not have to climb inside a partially built car body.

3. Products into Business

Standard oil made hundreds of products are made from each barrel of oil and new markets were developed for the products. Sales and delivery methods were created to supply global markets (Asia, europe and elsewhere).

Tesla proved that electric cars could be made and sold at scale. Tesla is making new electric cybertrucks and Semi trucks. They are making new self driving systems which could enable robotaxis and robotrucks.

Tesla is dominated battery energy storage.

Software for energy storage is enabling new products and services for a more profitable grid.

Customers can either become more profitable utilities and residential and business customers can become sellers on the business side of energy.

Tesla is creating the dominant charging system that is replacing gas stations for cars and trucks and which will add 30% to the grid when 20-30% of oil is displaced.

4. Business into scaled industry

Standard Oil employed his own plumbers and almost halved the cost of labor, pipes, and plumbing materials. Coopers charged $2.50 per barrel but Rockefeller cut this to $0.96 when he bought his own tracts of white oak timber. He had his own kilns to dry the wood, and his own wagons and horses to haul it to Cleveland. Standard Oil negotiated huge discounts with rail companies to lower the cost of transporting oil and oil products. Standard Oil perfected large steamship tankers to ship oil cheaply overseas.

Tesla’s Master Plan 3 is the replacement of nearly all of the oil based economy.

5. Making the scaled industry involves scaling markets and supply chains.

The Oil Industry enabled to growth of tar for surfaced roads. It also scaled the use of kerosene for lighting. Gasoline and other oil products enabled the growth of rail and then the auto industry.

In 1870, when Standard Oil was formed, the price of kerosene was $0.26 / gallon. By 1880, Standard Oil had driven the price down to $0.09 / gallon; the price was further reduced to ~$0.07 per gallon by 1890.

Tesla is part of driving down the price of batteries to $70/kWh from $300/kWh and will drive it down more to $20/kWh.

The price of 250-300 mile range electric car will go from $30,000 today to $20000 and even $10000 in the future.

The battery industry has grown 100 times already to about 1 terawatt hour per year. It will grow to 20-30 terawatt hours per year.