Editor's Note: This article was originally published at 3:30 p.m. EDT on Real Money on June 21. Sign up for a free trial of Real Money.
Corporate managers have an obligation to deploy appropriate technologies. They should avoid falling in love with a particular technology simply because it is interesting, convenient or serves a public interest.
While mature companies such as General Electric (GE), Siemens (SI), Honeywell (HON) and others mastered technology management, others, such as Tesla Motors (TSLA) and SolarCity (SCTY), may be in danger.
The issue is energy storage and batteries. Last February, Tesla announced plans to build the world's largest lithium-ion battery factory. Upon hearing the news, investors flocked to the stock and the company's stock jumped more than 50 points.
Tesla's announcement is a massive bet on a single technology. Worse, its $5 billion wager appears to be based on the assumption that no one can make a meaningful breakthrough in energy storage sciences. It seems like a bad bet.
It turns out that there is a lot of money piling up on the other side of Tesla's bet. Leading research intuitions are investing heavily in new energy storage technologies. In a direct threat to Tesla's battery idea, breakthroughs have already been announced.
Tesla's battery idea centers on lithium-ion technology. The technology stores energy by using chemical reactions to trap ions that move from one electrode to the other. Lithium-ion batteries have huge storage capacities. However, because of the chemistry involved, electricity can go in and out only so fast, and some stored energy is lost in the process.