At Tesla’s annual shareholder meeting, CEO Elon Musk, once again expressed interest in developing a highly efficient, next generation HVAC system that features an advanced high-efficiency particulate air (HEPA) filter, hinting the project may begin as soon as next year. Referring to it as his pet project, Musk believes that you can make a more efficient and capable system, upending the current competitive market.
The Freedonia Group’s Kyle Peters, a senior capital equipment analyst, points out that “home HVAC systems are one of the biggest utility costs for a home owner, as well as being a major and often necessary investment.” He further notes “Efficiency is one of the main competitive factors among HVAC equipment suppliers, and it’s no surprise that most have embraced technological change to make their systems more efficient and more appealing to consumers.”
Tesla’s entrance into the electric vehicle market helped spur investment in these vehicles among traditional automakers and was at least partially responsible for the rapid growth in EVs in the US. A similar strategy to residential HVAC systems, especially if Tesla delivers on a reliable and efficient product, could yield similar results in the HVAC industry. The same can be said of its air and fluid filtration products industry.
“As our understanding of air and water pollution continues to evolve, bolstered by a wave of new studies, and consumer awareness of filtration technologies grows, the use of these products will surge,” according to Gleb Mytko, a global capital equipment analyst at The Freedonia Group. He also points out, “These two trends will create many opportunities for new industry participants. While existing manufacturers are already developing the next generation of filtration technologies to maintain their hold on the industry, its considerable growth potential is likely to attract new industry participants like Tesla.”
These companies will be able to draw on their knowledge and experience in other areas to assist with product development and innovation, benefitting from alternative perspectives. Some of the new participants may form partnerships with existing manufacturers or use strategic acquisitions to formally enter the market.
Tesla’s announcement is likely increase interest in HVAC and filtration systems, and provide impetus for additional product development. It also serves to remind that both the HVAC and filtration product industries offer companies numerous opportunities for years to come.
See the Freedonia Group studies HVAC Equipment, COVID-19 Economic Impact Report: US HVAC Equipment, and COVID-19 Economic Impact Report: Global Filters, among others.