The first commercial lithium-ion battery was developed by Sony in 1991. It was based on research from Stanford and others, and it was designed to solve a specific problem: they wanted more battery life for their new camcorders.
By 2003, many companies were producing for a global market of over 1 billion cells worth $4B USD. Their ideal target customer would own 7 lithium-ion cells: a couple in a camcorder, one in a mobile phone, a couple in a charge pack, and a couple in a laptop. This was a big market, but everyone hoped for the introduction of new gadgets that would need another cell or two.
Meanwhile at Tesla, we were in the market for thousands of cells per customer—each Roadster would use nearly 7,000 of them. At first, we had trouble even getting suppliers to speak with us, and when they did, it was generally to tell us that no application needed more than three or four cells.
Eventually we were able to convince a salesperson that if we were successful, their new target customer would need not 7, but 7,000 cells. Their marketing department was off by a factor of 1,000. This magic phrase, “1,000X increase in TAM,” filtered up to the highest levels of a very large corporation and persuaded the executives to work with us. This much grander vision for their product had never occurred to them.
I love seeing ideas meant for one purpose take over in a different context, reimagined. I rather doubt that those original camcorder engineers dreamed that they were unleashing forces that would disrupt their brethren in the car industry. But I like to imagine them showing their grandkids the old camcorder they worked on, and telling them that the video part eventually shrank so small that it flew into their phones, and the battery part grew so big it became their parents’ car.
Cover photo by Jeff Cooper