Drew Baglino, former Vice President of Energy Engineering at Tesla, has launched Sadi Thermal Machines, marking his second venture since departing Tesla in 2024. The startup focuses on heat pump technology, entering a competitive sector that has drawn significant venture capital attention as demand for efficient heating and cooling solutions accelerates.
Baglino's background at Tesla positions him well for this pivot. He spent years leading Tesla's energy storage and grid integration efforts, managing projects that required deep expertise in thermodynamics and system efficiency. This experience directly translates to heat pump development, where incremental improvements in coefficient of performance can unlock substantial market value.
Sadi Thermal Machines enters a landscape already populated by well-funded competitors. Startup Gradient, which makes commercial heat pumps, raised $50 million in Series B funding. Enhabit, focused on residential heat pump retrofits, has attracted backing from Breakthrough Energy Ventures. Traditional HVAC incumbents like Carrier and Lennox have also invested heavily in heat pump R&D to compete in the decarbonization wave.
Heat pumps have become central to climate policy across North America and Europe. The U.S. Inflation Reduction Act offers substantial rebates for residential heat pump installations, creating tailwinds for the sector. Electrifying heating, which accounts for roughly half of building energy consumption, represents one of the largest carbon reduction opportunities available.
The startup's timing aligns with accelerating adoption. U.S. heat pump shipments grew 10 percent year-over-year in 2023, though they still represent only 15 percent of new HVAC installations compared to 50 percent-plus penetration in leading European markets.
Baglino's first post-Tesla venture, Heron Power, pursued lithium extraction from geothermal brine, operating at the intersection