Greg Abel, the chief executive officer of the energy unit at Warren Buffett’s Berkshire Hathaway Inc., said the batteries that Elon Musk is developing for utilities and homes need to be cheaper before they change how people use electricity.
It’s “not game-changing, and it’s because of the cost structure,” Abel said Wednesday at an event in Calgary. “Is there an opportunity to now implement that into our systems, into our transmission and distribution systems? Absolutely. And is it completely cost-effective, no. It’s got to get cheaper.”
Over coffee with Abel recently, Musk, the Tesla Motors Inc. CEO, told him that batteries will power 1 percent to 3 percent of households in the coming years, Abel said.
Musk unveiled a suite of batteries in April that he said would “fundamentally change the way the world uses energy.” The equipment allows homeowners, businesses and utilities to store power generated by solar panels, reducing the need to rely on utility grids for electricity.
Officials at Tesla’s press office couldn’t immediately be reached for comment.
Tesla has less than one percent of the installed capacity of stationary batteries globally, according to Bloomberg New Energy Finance.
Berkshire owns the largest utility in Nevada, where Tesla’s so-called gigafactory is being built east of Reno.
Abel, 53, helped build Berkshire’s energy unit into one of the largest utility businesses in the world over the past two decades. Its operations include companies that keep the lights on in Iowa and Nevada, transmission lines in Alberta and gas pipelines that stretch from the Great Lakes to Texas.
For Buffett, Berkshire’s billionaire CEO, the energy business has become a reliable way to put billions of dollars to work each year. Abel’s unit reinvests its profit back into its utilities and regularly finds opportunities to buy others.
Berkshire’s operations also include insurers, manufacturers, retailers and BNSF, one of the largest U.S. railroads.