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- [00:01]
Steven
Hey, it's Steven. I am up to my eyeballs in AI right now. I'm currently preparing for a Transition AI conference next week. Thanks to those of you who bought tickets, the event is sold out. The next you're going to hear from me, Katherine and Jigger on this feed will be our live episode. We're recording from Transition AI. Caroline Golan, who just left Google, is going to be joining us. She has some really fascinating ideas about new infrastructure models for data centers and energy. So in the meantime, I am dropping into the feed this week with an episode of another Latitude Media show, the Green Blueprint. This episode features Drew Baglino, the former SVP of powertrain and energy at Tesla. He was one of the key people who built the energy storage division at the company. And in this episode, Drew explains how his team, which was basically left with scraps and told to just figure it out, built the energy business into a multi billion dollar arm of the company. And this is really timely right now because Drew just unveiled his new company, which just ra $38 million to build solid state transformers. And also because Tesla's recent quarterly earnings were really rough. But the bright spot was energy storage. Tesla doubled its stationary storage deployments last year and expects 50% growth this year. And Drew was one of the people who made that possible. So if you don't listen to the green blueprint, get it in your rotation, take out your phone right now, hit subscribe. Every other week, host Laura Pierpoint tells captivating stories about the messy path to scale for a wide range of climate tech companies. This one definitely to be on your list. So here's the episode with Drew Baglino and we'll catch you later.
- [01:39]
Laura Pierpoint
Latitude Media covering the new frontiers of the energy transition.
- [01:45]
Drew Baglino
I went on a bachelor party one weekend and it was to this house that was off grid. And I was just looking at how kludgy the setup was with the solar and the power electronics and the batteries. It was some lead acid system. I was just super motivated at the end of that weekend to, you know, Tesla can do this so well. We know so much about power electronics, we know so much about batteries, and it just seems obvious that this is going to happen.
- [02:07]
Laura Pierpoint
I love, by the way, that this story starts in some sense with a bachelor party because I feel like this is something that I share and many of us who are energy nerds do that. There's always that story of the time. You know, some people drink beer at bachelor parties. The rest of us spend time looking at Kluge Energy systems and Dreaming about new products that could take over the world. So yeah, high appreciation for that. Totally. In 2013, Drew Baglino was a systems engineer at Tesla. He'd been at the company for about seven years and was helping to develop its first commercial sedan, the Model S.
- [02:40]
Drew Baglino
I was technical lead on the battery projects we did with Daimler Powertrain projects with Toyota Powertrain architect for Model S. All these were like really formative, engaging problem statements that were meaty. And over time, I kept luckily being given the opportunity to take on other meaty problem statements, one of which was energy.
- [03:01]
Laura Pierpoint
That year, Drew went to a bachelor party at that off grid house. And without fully thinking through how he was going to charge his Tesla Roadster to get back home, he drove it there. Remember, this was 2013 when charging infrastructure was scarce. So to charge his car, he started tinkering with the home's solar and battery system.
- [03:22]
Drew Baglino
So I was already like getting up in the business of the electrical system of this house, figuring out how I could charge this roadster. And like doing that made it even more apparent to me that like there's some real low hanging fruit to improve home electrification.
- [03:34]
Laura Pierpoint
And it did improve a lot. Three years later, Tesla CEO Elon Musk stood on stage at a launch event in Los Angeles to announce the second generation of the company's residential battery.
- [03:46]
Drew Baglino
So we'd like to introduce the Powerwall 2. This is a big step above the Powerwall 1. It has twice as much energy, more than twice as much power in basic terms. You can take a four bedroom house and you can power your fridge, the sockets and lights for a day.
- [04:04]
Laura Pierpoint
The PowerWall was a 14 kilowatt hour stationary battery with a 7 kilowatt power output. And it revolutionized home energy storage in large part. The this was thanks to Drew.
- [04:16]
Drew Baglino
I started working on that in 2014. I became the lead engineer, built the energy engineering team and developed and launched Powerwall 1, Powerwall 2 3, Power Pack 12 and then Megapack 1 and Megapack 2. And it was tough.
- [04:31]
Laura Pierpoint
Drew left Tesla in 2024. Among everything he built at the company, one of his proudest accomplishments was helping build an entirely new energy business for the EV maker.
- [04:42]
Drew Baglino
The energy business was heavily supported by the vehicle business through many years, to be frank, but finally kind of got out of that bird's nest and was able to fly on its own and generate serious profits and bring cash back to the Tesla broader company. And it was really a fulfilling journey.
- [05:02]
Laura Pierpoint
I'm Lara Pierpoint and this is the Green Blueprint, a show about the architects of the clean energy economy. We've already invented most of the solutions needed to decarbonize the global economy, but many of these technologies are not yet commercial and they need to get financed and built at scale. We don't have decades to get them commercialized. We have years. This week I talked with Drew Baglino, former Senior Vice President of Powertrain and Energy at Tesla, about building a storage product that would break open the market for home batteries.
- [05:36]
Drew Baglino
The best way to get the most value out of that fixed infrastructure is to have it be bi directional and use near its full capability all day long. The lowest cost way to leverage that infrastructure is to have energy and storage really on both sides, both at the edge and at the center.
- [05:58]
Steven
OpenCircuit is supported by Sungrow. Sungrow is a global supplier of PV inverters and battery storage systems. Sungrow is ranked most bankable in both categories by BloombergNEF. There are many reasons for that, but one big one a strong fire safety record. Last year Sungrow set four of its five megawatt hour PowerTitan II battery systems on fire and it livestreamed it to show the flames didn't spread. Plus, the PowerTitan II earned its Fire Safety Certification from the New York City Fire Department. That is an incredibly difficult feat. Learn more@sungrowpower.com or click the link in the Show Notes. Open Circuit is brought to you by Natural Power for nearly two decades, Natural Power has provided engineering and consulting services for renewables projects across the US Natural Power supports clients in wind, solar and battery storage with a focus on independent engineering, technical due diligence, energy estimation and developer support. With more than 245 gigawatts of project experience in North America and acceptance from major financiers, Natural Power is responsive, able to meet tight timelines and pragmatic. Natural Power works with you to understand, quantify and mitigate risks. Learn more@naturalpower.com or click the link in the Show Notes. Open Circuit is brought to you by Kraken, the only proven AI powered operating system for utilities that includes companies like Champion energy services. Serving 2 million customers, Champion is one of the fastest growing retail electricity providers in the country, with much of that expansion coming in Texas.
- [07:26]
John Ballinger
Texas Residential is unique in that we get to be the center of the customer experience. It's just a fun puzzle every day.
- [07:35]
Steven
John Ballinger is VP of Marketing Operations at Champion. He's been working there for 16 years. The company serves a wide range of retail customers and over that time John has seen a noticeable shift in what those Customers want.
- [07:46]
John Ballinger
They've got smart home devices and they've got EVs, and they've got the solar systems with batteries and they want a highly integrated experience. But we're in a little bit of a pivot and an evolution ourselves. It's pretty different now than it was five or 10 years ago. And that leads to why we're interested in Kraken.
- [08:04]
Steven
Wouldn't it be great if your power provider could easily embrace the adoption of EVs, solar panels and other consumer tech, develop customer centric products in weeks, not years, and offer excellent customer service? But with Kraken, all of this is possible. Later in the show, you'll hear more about how Champion is using Kraken's integrated operating system to meet the dynamic changes currently facing the energy industry.
- [08:25]
John Ballinger
Prior to Kraken, we really haven't had the capability to get there. Now we do.
- [08:29]
Steven
Visit Kraken Tech or click the link in the show notes to learn more.
- [08:42]
Laura Pierpoint
In the early 2000 and tens, Tesla started exploring stationary storage. The company was driving battery costs down as it ramped its vehicle production. And it started to see an opportunity in the market beyond just cars.
- [08:55]
Drew Baglino
Tesla had done a very early. We call it, it doesn't even have a name. It was called, you call it Powerwall Zero. It was like a sort of cobbled together model S battery module. I think we did a thousand of these early systems with SolarCity and it was like a self generation incentive program, trial program really, to see if residential batteries could work.
- [09:16]
Laura Pierpoint
As Tesla and SolarCity were experimenting with these early battery systems, the solar market started to shift dramatically. Net metering policies, which allow solar customers to sell excess electricity back to the grid at retail rates, were being overhauled in key markets like Hawaii and California. The rapid adoption of solar on homes in those markets was starting to fully saturate the grid.
- [09:42]
Drew Baglino
When SolarCity saw the coming sort of net metering change of policy, they knew that it was almost existential to them to have a great battery offering.
- [09:52]
Laura Pierpoint
So SolarCity asked Tesla to make a battery for them. The battery had to be compatible with a variety of inverters because of SolarCity's partnerships with different vendors.
- [10:01]
Drew Baglino
It was a little bit more work for Tesla because we basically had to be compatible with all of these different batteries, sorry, different inverters I should say, but it maybe was a little bit easier for them to manage from a deployment perspective. They didn't have to only use one inverter type with the Tesla battery, for example.
- [10:17]
Laura Pierpoint
And that's what led to the powerwall One, the deployment and the integration of that particular product were very complicated. This involved a lot of moving parts, but it allowed Tesla to bring a product to market.
- [10:30]
Drew Baglino
Tesla at the time didn't have like a channel to the end customer in the residential space necessarily. We didn't have the time to develop a grid interactive inverter that could back up a house. Like we didn't have the team initially, the energy engineering team was really quite small. So it was a way to get a full however glue G system together that could show the value of stationary storage in enabling solar to still provide value and energy independence and backup power.
- [10:57]
Laura Pierpoint
In 2017, California ramped up public safety power shutoffs or PSPs. Utilities would intentionally shut down portions of the grid to mitigate wildfire risk and to prevent system failures. But it meant many Californians faced prolonged outages, which then drove more demand for home based backup power.
- [11:16]
Drew Baglino
Really a home battery wasn't just about making solar, residential, solar valuable and affordable, but also about providing you some amount of energy resiliency, energy security. And so that Powerwall 1 system I think showed all of that to the end customer and also showed the roadmap to make it better.
- [11:35]
Laura Pierpoint
Tesla launched Powerwall 1 in April of 2015. Just over a year later, it launched Powerwall 2 and acquired SolarCity. Also during this time, the company had announced a new ev, the Model X and was working on what would become its best selling car, the Model 3. Things were moving fast and Drew and his team were doing their best to keep up with growing product demand while fighting for resources internally. I asked Drew what it was like during that time, the sacrifices he made and how his team built the battery that spawned the home storage market. Talk a little bit about what it took to build the team within Tesla and your approach to building it and how you thought about resources. Because I think at first blush folks could look at what you are doing there and say, gosh, this is the dream as you're part of this much bigger company with all these resources and so you don't have to go fighting for VC funding and things like that. But I think it actually comes with a different set of challenges to be part of a bigger company that has a big focus on something that's maybe adjacent but not the same sort of core problem that you're ultimately trying to solve. So can you talk a little bit about those dynamics and ultimately how you created a team and how you all functioned within Tesla?
- [12:46]
Drew Baglino
I mean it was truly bootstrapping. We had to be extremely scrappy because in this period of time from 2014 to ultimately 2019, Tesla was definitely not sustainably profitable on the car side. And not just was it not sustainably profitable. We went through some very challenging times like the Model 3 ramp in 2017 and 2018. You know, in that period of time we were able to build like a small, very like, I would say like Swiss army knife, Marine Corps, Jack of all trades group of people that could put together that early Powerwall 1 and Power Power Pack 2 Powerwall 2 programs. You know, this was like a couple dozen group of people that made that all happen on the engineering side. And we also benefited from the fact that there was a little bit of disruption in the solar space at that time. You know, you had companies like SunPower and others, SunEdison, like a large sort of restructuring of the solar industry. The whole SolarCity acquisition, there was some talent available and so we could really pick demonstrated talented individuals that had done utility scale solar projects, that had done great things in the power electronics space in the early days of solar. And then the SolarCity acquisition itself, you know, there was a lot of efficiency found in that integration. Not everybody stayed for sure through that acquisition, but the best people did. It also helped that SolarCity kind of had a pipeline of projects that they had built on the Power Pack side in particular that gave some clear targets to the energy engineering organizations, like hey, you got to deliver this stuff. And then that was another thing that in general I would say we did well, which was whether it was the Southern California Anderson project with Marilyna or the Hornsdale project. Like we had clear problem statements that we had to go out, go and do that. There were like financial implications if we didn't do another big one that was important to Megapack 1. Success was actually the PG&E MAS landing installation. These were huge projects that the company was like signed up to do. You know, Elon CEO says yes, we're going to go do that. Like you then work with finance and with you're partnering organizations to find a way to do it as scrappy but not crappy as possible and find a way to get it done. And then there was some sharing that happened too. One of the things that Tesla probably continues to do well, but certainly did well when I was there was what is the urgent problem? And so we were able to focus in 2016 on ramping the energy module line to 1,000, 2,000 modules a week for Powerwall 2 and for Power Pack 2. And you know, in some ways the that commitment to deliver the Southern California Edison project by the end of 2016 really juiced the the module ramp. And we like brought, you know, software engineers, mechanical engineers, everybody from Palo Alto up to Reno. In fact, the best the first products made in Reno were Powerpack and Powerwall. It was a real rallying point to like get everybody up there, ramp the line, make it happen. And we continued to ramp all of that for Hornsdale, which was mid-2017. And then we had this sort of like core energy team that had ramped some challenging products to ramp. You know, that team was then primed to kind of support the vehicle team ramp Model three. And we did, you know, we spent a good like six to nine months, the energy team, like up in Reno doing that.
- [16:04]
Laura Pierpoint
So was this all like smooth and easy or were there moments of tension in all of this? Cause I imagine that like you've got all this really amazing talent. At the same time you're being very public about these projects that you're ultimately pursuing. So when you needed it, was it easy to marshal the resources you required within the company to deliver on these things or did you have to still kind of fight for them in the moments when things mattered to you?
- [16:27]
Drew Baglino
It was intense nights and weekends situation, you know, burning the midnight oil, as they say. I had my like 3 month old first son and my wife with me up in Reno, living out of the Whitney Peak Hotel. I was there on Thanksgiving Day. It was that kind of situation. But hey, it was like we were doing stuff that we felt passionate about. But I think beyond that, there are difficult trades to make. In that 2016 period, we were developing the energy module. It was also the same time that the 100 kilowatt hour module for model S and X was being developed and the module for Model 3. And the interesting thing was they each went different directions. So it's important as broader context to consider that this was still the time when battery cells and battery modules were coming down the cost curve really quickly and there wasn't an obviously best way to do anything. And in 2016 we were literally trying three different ways to make a cylindrical cell module. And so manufacturing engineering was not easy to come by to think about how to develop the automation for all of these different ways to do cylindrical cell modules. And so there was a lot of people wearing multiple hats. You know, there were some strategic moves to, to partner with some awesome automation houses that, that helped Tesla out. Well, the way I would describe is. Describe it is like jumping on the most critical thing that week and harnessing the team to do that and being very fluid with with how you're allocating folks, like I said, like software engineers working on the manufacturing line, like, that kind of stuff was happening a lot. And for some people, that wasn't for them. But for a lot of people, I think it was super rewarding when it worked, you know, to go through that.
- [18:08]
Laura Pierpoint
That's very cool. And it seems like, I mean, so everybody was kind of okay with this, and they were interested in working on different things at different times, and it worked out pretty fluidly. Or were there any moments where you were like, I can't get what I need to make this happen? Particularly on the powerwall?
- [18:21]
Drew Baglino
Yeah, it was tough. Not everybody was okay with it. Some people, you know, couldn't hack it or left on their own accord. Specifically on the powerwall, we did. We had this, like, blitz. I think we called it the module line blitz, where, you know, we were burning down a huge list of action items to figure out how to ramp that. That energy module line. And it was everything from how do we figure out how to get the potting to cure faster to the, like, module pallet doesn't work and needs to be completely redesigned. And, like, let's figure out how to get that done. And the people that made the pallet said it's going to take six months. Let's figure out how to get it done in two weeks, you know, and just really stretching people to do things that they didn't know they could do. And then there's always some things that have to give, right? Like, especially as we got into 2017 and 2018, there was a cell, A cell sort of pinch. Panasonic was having a hard time ramping, and we didn't have enough cells to go around between vehicles and energy. And. And so we had to kind of like, pare back on the. The powerwall build plan, which was tough. And it was tough, especially in light of this, like, growing backlog we had because of all of the pspss. And people became frustrated that they had to wait really long for a powerwall. And again, the same thing happened, by the way, in the COVID crisis, where, you know, there were semiconductor shortages. It was kind of like, hey, vehicle's the breadwinner energy. You know, you're going to have to get the scraps and figure it out. And I, and I. I don't. I think those were all the right calls. It was tough. And those were. You know, we had. It actually happened more than once with, with Powerwall 1 to some extent and Powerwall 2 again, where we got a lot of people really excited. In lots of markets they really wanted the product and then we couldn't really deliver the product. In one case it was not enough cells, another case it was not enough semiconductors. And it was, you know, it burned a lot of relationships, it burned a lot of people out in the team that were really sad. But like these are, this is just the, this is the sausage making of building a company. You can't win them all.
- [20:12]
Laura Pierpoint
At this point, Drew was an executive at the company, serving as the vice president of technology at Tesla Energy. The Powerwall 2 had already been announced and pressure was mounting to get the product to market. But the supply chain just couldn't keep up with Tesla's growing business. So Drew set out to fix it. We'll get to that after the break.
- [20:38]
Steven
OpenCircuit is supported by Sungrow Sungrow is the leading maker of PV inverters and battery storage systems. You know the story by now. America is in the middle of historic load growth and we need to electrify the economy to meet economic growth and decarbonization goals. We need 2 to 3% more power every year in America. And of course we need Solar plus batteries to get there in time. Sungrow manufactures high quality, affordable solar and battery systems that are essential to meeting our growing demand for electricity. Sungrow is the number one choice for power inverters and their Powertitan II leads the market in utility scale batteries. Sungrow makes energy storage you can count on for commercial and industrial uses too. You can click the link in the Show Notes to learn more about their family of products. Go to sungrowpower.com open circuit is brought to you by Natural Power. For nearly two decades, Natural Power has delivered expert independent engineering and consulting services for renewables projects across the US and beyond. Success in project transactions requires an independent engineer who's laser focused on timelines, understands the nuances of risk, and collaborates seamlessly to develop solutions tailored to your needs. Natural Power excels at working within tight time constraints while ensuring diligence never takes a backseat. With a deep expertise in wind, solar and battery storage, Natural Power delivers top tier support and independent engineering, technical due diligence, energy estimation and developer support accepted by major financiers. Their flexible approach ensures projects are built on a strong foundation powered by expertise driven by sustainability, that is natural power. Find out more@naturalpower.com or click the link in the show notes. OpenCircuit is supported by Kraken, the only proven AI powered operating system for utilities. Earlier you heard John Ballinger, the VP of marketing operations at Champion Energy Services in Texas, speaking about the search for a new tech platform.
- [22:31]
John Ballinger
And we looked at a lot of platforms that have been around a long time in the Texas residential market that would have done a great job of meeting our needs several years ago.
- [22:41]
Steven
But those platforms often solved a single problem. Kraken integrated everything from billing to customer support to device management in a way John hadn't seen anywhere else.
- [22:51]
John Ballinger
It makes piecing together the customer lifecycle so much easier. You want to understand who's called, you want to understand who's made a payment that's failed. You want to understand who's got emails that are bouncing. You're not stitching together five or six different platforms together to figure all that out. And then you add to it with really sophistication, being able to control devices and suddenly our mind blew up. It's not the platform just that we need today, this is the platform we need tomorrow.
- [23:15]
Steven
Like many in the power industry, John worried that migrating to a new tech platform might be a messy, drawn out process. And again, Kraken exceeded expectations.
- [23:24]
John Ballinger
Part of where we've struggled in other migrations is we do kind of just enough. And the Kraken team has brought so much horsepower to this that like we, we're well supported. It's not just enough, it's more than enough.
- [23:37]
Steven
With over 40 large scale migrations completed on time and on budget, Kraken is designed to help utilities leave legacy tech behind. And that allows people like John to push what's possible.
- [23:47]
John Ballinger
Integrating into a customer experience is very hard and Kraken just doesn't. And so like the art of the possible is it's moved the limits way out for us and we can dream bigger.
- [23:56]
Steven
Join leading utilities across the globe in upgrading to Kraken. Visit Kraken Tech or click the link in the show notes to learn more.
- [24:14]
Laura Pierpoint
So let's talk about one moment of that evolution because you, as you mentioned, you had a massive cell shortage and you're really trying to get product out there. So what did that look like? So what exactly were your conversations like with Panasonic when you understood that they couldn't supply at the level you required? And then what did your conversations look like with new suppliers? How did you negotiate those contracts? How fast were you trying to push everyone? What was that like?
- [24:39]
Drew Baglino
It was highly collaborative with Panasonic. You know, both Tesla and Panasonic had to help each other bring labor into the area. You know, they were huge employers in that area. The first big factory in Reno. So there was A lot of collaboration there, helping each other out. Myself and other members of my team kind of volunteered to go in and help debottleneck their ramp up of their new lines. You know, we simplified their life by telling them they didn't need to make the energy cell anymore. Even though that was hard for powerwall, but it was necessary for them to rent vehicles. But at the same time, you know, it like built a conviction in our minds to find new sources of supply, which again is not easy because I think it's important to remember at this time, this was probably 2017, when this is actually happening, there weren't a lot of well renowned high quality cell suppliers out there and we, we didn't want to be involved in something that wasn't going to be like a volume play. Like one of the reasons why we went with cylindrical cells in the first place was because they were the only batteries built in high volume. And it wasn't just about volume, but about commitment to safety and reliability. Because especially with stationary storage, but also with vehicles like you're talking about something that needs to survive through 4,000 to 10,000 cycles, 10 to 15 to 20 years, you need to really have confidence that whatever supplier you're going to go with is actually going to deliver a reliable and ultimately safe product. And ultimately we went with the best. The supplier that impressed us the most at the time in terms of their commitment to those things and their commitment to grow with us in the energy business. I mean a lot of people didn't see it as an obvious thing at that period of time and it worked out. I mean, I think LG took a big bet. I remember going and spending a lot of time in Korea and explaining like what is a residential battery? Why would somebody want it? What is a good battery? What are these things for? There was a good amount of, of fun at some Korean restaurants and ultimately, you know, they took a bet on Tesla on our team on the energy side and it ended up paying off for them when they ended up getting an opportunity to participate with the vehicle business in China and vehicle business in other places. So it is with any, with any business transaction it's like, are you finding like a willing and capable partner that is excited to go on the journey with you? And that is very much like a personal eye to eye thing. And that's why the time in Asia was so valuable at the end. I remember like signing that contract and taking a bunch of photos and, and actually when I left Tesla, the, the guy who I worked on the contract with at lg like sent me the photo was like, I still remember that day, like, what. It was so awesome. What we did, what we made happen.
- [27:11]
Laura Pierpoint
Yeah. I mean, this is such a fascinating story and I love that you're emphasizing the relationship side of things because I think that that matters so much and so many aspects of what climate companies have to do, particularly when it comes to scaling. I'm though, because as you were telling this story, one of the things I found myself doing is making a tally of like, who on which side of the table has leverage based on various factors. Because it seems like for you all, you know, I assume LG and Samsung, they knew that you needed to move as quickly as possible, that you had, you know, some customers who were demanding some product. They probably also knew that there were not thousands of suppliers that could build what you wanted at the safety levels that you required. And then as you say, you know, to some extent it sounds like they started to believe in what you could do as a company. But you're also at the level of explaining why people want residential batteries. So can you say a bit more about like, how the leverage felt in the negotiation? Did it feel like it was trivial for you to get them to a place where they realized this was a big market for them? Or was it. Or was it trickier than that?
- [28:13]
Drew Baglino
It was tricky. It was not easy, especially given how, like, the level of expectations we held the suppliers to. It was not easy to give you a sense of what it was like. At the time when I was working with lg, I was interacting with their IT applications subdivision. Like I wasn't talking to their head of vehicle batteries or anything like that, you know, and that was because that's where the cylindrical cells were within LG at the time. It was not, you know, they considered pouch cells and to be their vehicle cell form factor. And I think actually in some ways that was a good thing because the laptop industry had sort of moved away from cylindrical cells at this point. Led by Apple and others. Slimmer and slimmer all the time, you know, pouch had become dominant. And so this like it Apple, you know, business unit within LG was like, well, I need to find something to be relevant, you know. And so if, if laptops are going to be repeat, repeat sales outside of Korea and maybe Japan, a couple markets, like, I'm going to need to find a new thing. And so that helped. It's hard just to overstate just how amazing it is to have businesses that are willing to take large risks like the gig factory in Reno was A huge risk taken by Panasonic to build a single factory bigger than all other factories combined in a new country where they had never done battery manufacturing before in a state with no manufacturing base, Nevada, you know, with a startup company that is going to equity finance it. You know, I mean, it was like wild that it all came together. And it was a lot of jb, Elon and Kurt and the leadership at. At Panasonic coming together and being like this. This risk is worth taking.
- [29:50]
Laura Pierpoint
Part of what I'm hearing as kind of a throughpoint to your story is just all the synergies that existed between the car manufacturing side and what you were doing on the energy side. And obviously there are some tensions there, but just so many benefits with respect to kind of the glow that you get from big companies being willing to take risks from the relationships that result as a matter, you know, as a matter of course, and the fact that you can kind of move people in and out of where things are required the most. So I really hope that inasmuch as there are folks from big companies that are hearing this, that they're thinking about this, because there are some really cool things you could do with this approach.
- [30:26]
Drew Baglino
Yeah, I think you need to be creative about that and try not to get stuck in a rut. I think that there was a real platform opportunity that came out of reusing pieces of technology. The first supercharger, sometimes called V2 or V1. You know, the chargers in the supercharger are the onboard charger for Model S. Like, it's. It really, like, that's just, I think exemplifies the platform play that is possible with smart reuse of technology. And again, as I was talking about, like early powerwall had like the Model S battery module in it, you know, And I think that is the way to be efficient with resources is like, how do you be strategic with reuse? You know, like the firmware team on the energy side used the like continuous integration system of release management and so much carryover software to do battery management, to do build management, to do communications infrastructure. Like, so much stuff was reused. And this is actually, I think one of the big benefits of an in office culture is you just see, it's like, hey, look at that thing over on that desk. Like, I think I could stick that and use that as my power supply or whatever. You know, it's like, it's more visible on how you can build another great product out of parts you largely already have in your ecosystem, you know, and when you look at like optimus as an example, which is the robot program at Tesla. Like, why is Optimus going quickly at Tesla? It's because, you know, hey, there's a lot of reuse of platform technologies. Whether it's like, how do you opt, like a simulation tool for how you optimize a motor actuator, or literally, like the foundational AI stack behind the image processing and the neural nets, you know, between the car driving itself and the robot walking around like it's a real platform play.
- [32:13]
Laura Pierpoint
And so as you built that, you fought a whole lot of battles. And so you've mentioned some of these that, like, you know, the learnings from the Powerwall one and the initial scrappiness challenges with cell supply needing to sort of move over to ramp the Model 3. When was the moment that you knew that the second Powerwall was a commercial success? Because that was a huge milestone for you, right?
- [32:32]
Drew Baglino
Yeah, that felt awesome, especially through the struggles with the cell shortages and things like that. I think it was when the VPP success and we saw that translate into like the request from lots of places around the globe to repeat it. When we saw the Green Mountain power model be replicated with other utilities and when we saw the channel partners on the direct business, like, basically to the end customer, you know, either directly through Tesla Solar or through partners like sunrun, Sonova and others. Just keep asking for more. I think Puerto Rico was a. We had that hurricane in Puerto Rico where the grid was out for so long, and it really drove a lot of demand for energy resiliency and grid support on the battery side. And Puerto Rico is still one of the largest powerwall markets, which is kind of wild because there's not a lot of people in Puerto Rico, but I think that might be the single largest powerwall market still. Just the customer happiness with the final product and things like Stormwatch. And finally persevering through sales shortages, supply chain shortages, and hitting 7k powerwalls per week in Reno and taking all of that learning into Powerwall 3 and have that hit the market with such success. I mean, that's not a single answer. I know, but maybe if I were to zoom out and provide you a pithy, simple answer. I knew Powerwall 2 was a success when powerwall became the term for a home battery. And when people were like, talking to me in the street, they're like, I really need a. I need a home battery. I need a powerwall. Like, do you know where I can get that? And they don't even know that Tesla makes it. They just know that they need it. And then on top of that, when I went to, like this was maybe two or three years ago, I went to Intersolar or whatever it's called now, RE plus. And the whole like every booth has a residential battery. When you go into the trade show and there's so many copycats, like, you know, that's when you've made a successful product. And that is definitely the situation today.
- [34:30]
Laura Pierpoint
Yeah, totally. When you start getting a definition in the dictionary, a la Kleenex, meaning the word for tissue, you know you've made it. I love that.
- [34:38]
Drew Baglino
Yeah, we didn't actually have that name solidified until the day before the powerwall presentation in 2016.
- [34:45]
Laura Pierpoint
That's amazing. Were there like other options on the table in that moment or was it just like.
- [34:51]
Drew Baglino
I don't remember the other ones, but for sure that name was not selected until maybe even the hour before the presentation. I mean, it definitely was within 24 hours of the presentation on stage when we sort of announced Powerwall 1 and Power Pack 2. I mean, Power Pack 1.
- [35:07]
Laura Pierpoint
Yeah, I love that. Okay, well, let's talk about a couple of the lessons learned. I want to ask you a leadership question. You were describing a really intense environment where you got a small scrappy team. Everybody's a jack of all trades. You're needing to be fluid between even working on the product you're working on versus going back and working on car manufacturing. All those sorts of things you're talking about nights and weekends. This is a really intense environment. And so I'm curious to know what made you successful as a leader under those conditions. Was it about choosing the right people and them having intrinsic passion to do this, or was there something you were doing on a consistent basis to motivate the team and to get the outcomes that you ultimately got?
- [35:47]
Drew Baglino
You're absolutely right. You need to have an impedance match between the talent you bring into the company and the problem statement of the company. And you know, I think a lot of people realize when they're joining a startup that this is not a phone it in type gig. And while Tesla was public at this point, you know, 2014 to 2019, it certainly wasn't stably profitable and people knew what they were signing up for. You know, Elon said things like elite Navy Seal. That's the kind of talent we're trying to draw. And it's not wrong. It was a high expectations environment. But the great thing about Tesla then and now in different ways was you saw clear impact of what you were doing, creating a New product category, residential batteries that enable solar penetration to continue to increase or stationary storage at the utility scale that streamlines higher and higher renewable penetrations at the sort of like market scale. You know, you can get up to places like California now where many hours during the day it's 100% renewable in battery. Just the way the grid has gone from 0 gigawatts of storage deployed in 2014-2024, Tesla alone did 30 gigawatt hours. I mean it's, it's, it's pretty amazing what you can do in 10 years. And people saw that visibly come together and they saw their imprint on it physically coming together. Even if it felt odd as a software engineer to be doing manufacturing line ramp. You know, you could see that the ramp was happening because of the contributions that you made. And I think that that really motivated people.
- [37:18]
Laura Pierpoint
You mentioned early on as we were talking some of the tensions between working on kind of the core engineering versus spending time on aesthetics. And this is something that doesn't come up often, I think in the climate world. Right. Because too often we're in a business to business sort of environment. We don't necessarily have to make things beautiful, we just have to make them fun, functional. But it's different for the handful of businesses that are ultimately developing consumer products. So do you have advice or learnings on how best to focus your attention when there are some of those trade offs between aesthetics and functionality?
- [37:52]
Drew Baglino
I think there can be too much focus on aesthetics while missing attention to detail. Because actually what really matters is that attention to detail, like a great example with Powerwall 2, we were like, we still want the product to look beautiful, but it needs to also seem rugged. Like it's a part of your house, you know, and you want it to last forever. Shouldn't have like a fancy plastic enclosure. It should look like it's robust. So it should be, you know, it's made out of steel, right? And you go touch it, you're like, yeah, this is solid. But at the same time we wanted it to feel beautiful and something you're proud to have on the front of your house. And again like, okay, so that's all well and good. Well, how do you translate that in terms of attention to detail to the end customer? Well, a good way is to have them take the wrap off and then they're like, they get to experience that and you need a wrap because you have this aesthetic, a surface product. You're going to stick it in packaging and move it around the world. And installers are going to be manipulating it and you don't want it to get damaged. But then when the customer actually kind of peels off that plastic film and sees their product for the first time, it's like they really appreciate what they just installed. And then like combining that with a very simple, streamlined commissioning experience where they get to understand, like, all the things that their product can do so that it's not an afterthought. So I think people sometimes lose the customer journey by over focusing on one thing at the expense of the whole thing.
- [39:18]
Laura Pierpoint
One last question. Elon Musk, slightly controversial figure at the moment. Any comments on his interaction with what brought the Powerwall and the energy side to be on this and where things are going now?
- [39:31]
Drew Baglino
Yeah, hands down, the energy business of Tesla could not have gotten to where it got to without Elon's input, both as a major advocate in the early days and as a strong force for acceleration. On doing big projects like the Hornsdale project, going big or going home, basically, like, we're not going to do this business if it's going to be small. That was something he said a lot and I. It was great to have that sort of like passionate support for it in the early days. And he, you know, as a leader, just generally against me as an engineering accountable individual for many years at Tesla until I was the business leader for energy at the end, he pushes for excellence and excellence is, you know, it's never light enough, it's never affordable enough, it's never easy enough to install. It's never enough. Like, that passion that he brought to every design interaction really motivated us to make great products and it was, it was essential to, to the success of the iterative progress of the products over time. And. Yeah, so I just would, I would thank him for, for that contribution to it and for many others, of course, and maybe leave it at that.
- [40:38]
Laura Pierpoint
Fair enough. All right, awesome. Thank you so much, Drew. This was amazing. I really appreciate the conversation. Awesome stories. Really interesting to hear about this journey in the energy sector. And I look forward to talking you down the road about Heron Power once y' all are building transformers.
- [40:53]
Drew Baglino
Yeah, yeah. And maybe other things, so. Sounds good, Lara.
- [40:59]
Laura Pierpoint
Drew Baglino is the former Senior Vice President of powertrain and Energy at Tesla. He recently launched a new power electronics company called Heron Power. The green blueprint is produced by Latitude Media in partnership with Trellis Climate. The show is hosted by me, Laura Pierpoint. Our producer is Erin Hartik. Ann Bailey is our senior editor. Sean Marquand is our technical director. Steven Lacey is our executive Editor. If you'd like to suggest topics or guests for this show, send an email to the greenblueprintatitudemedia.com you can listen to the Green Blueprint at latitudemedia.com or subscribe wherever you get podcasts. And if you have fellow clean energy or climate tech travelers who would benefit from the incident insights in this show, send them a link. This is the Green Blueprint, a show about the architects of the clean energy economy.