The Man Behind the Machine: Drew Baglino’s Tesla Legacy
When a senior vice president exits a company after nearly two decades, the industry tends to pay attention. Drew Baglino left Tesla in April 2024, having climbed the ranks from early work on the original Roadster to overseeing core energy technologies like electric motors, batteries, and power electronics. His departure marked the end of an era for Tesla’s engineering leadership. But for the clean energy world, it signaled the beginning of something new.
Baglino did not vanish into retirement. Instead, he quietly laid the groundwork for what could become a major player in home heating. The first venture, Heron Power, focuses on solid-state transformers — devices that could modernize how electricity flows through buildings and grids. The second, a heat pump startup called Sadi Thermal Machines, targets a different but equally critical piece of the energy puzzle: how we warm our homes and water.
Introducing Sadi Thermal Machines: A Heat Pump Startup with Deep Roots
Sadi Thermal Machines was formed in June 2025, according to company filings in Delaware and California. The heat pump startup operates out of Scotts Valley, California, sharing its headquarters with Heron Power. That shared address is not a coincidence. It hints at a broader strategic vision — one where advanced power electronics and high-efficiency thermal systems work together in the same buildings.
Little is known about the company’s specific product plans. The startup has remained largely under the radar, though a review of LinkedIn profiles and a source familiar with the operation confirm that several Tesla alumni have joined the team. The talent pool alone suggests this is not a small side project. It is a serious engineering effort backed by people who spent years refining thermal systems at one of the most innovative automakers on the planet.
Why the Name Matters
The name Sadi Thermal Machines pays homage to Nicolas Léonard Sadi Carnot, a French physicist who lived from 1796 to 1832. Carnot’s work laid the intellectual foundation for modern thermodynamics. He described the ideal heat engine — a theoretical device that extracts work from heat with maximum efficiency. That same principle, applied in reverse, is what makes a heat pump work. Every heat pump on the market today, whether in a car or a home, operates on the Carnot cycle. Naming a company after him signals a deep respect for the science and a commitment to pushing efficiency boundaries.
The Science Behind the Name: Sadi Carnot and the Heat Pump
Understanding why this naming choice matters requires a quick look at thermodynamics. A heat pump does not generate heat. It moves it. In winter, it extracts thermal energy from the outside air, ground, or water and transfers it indoors. In summer, it reverses the process and acts as an air conditioner. The efficiency of this transfer depends on how closely the system approaches the Carnot limit — the theoretical maximum efficiency for any heat engine or heat pump.
Most residential heat pumps today achieve efficiencies of 300 to 400 percent. That means for every unit of electricity consumed, they deliver three to four units of heat. But the Carnot limit is much higher. A system operating at 60 percent of the Carnot limit is considered excellent. Sadi Thermal Machines, with its focus on advanced thermal management, could aim for even higher fractions of that theoretical ceiling. If the startup can deliver a heat pump that operates at 70 or 80 percent of the Carnot limit, the energy savings for homeowners would be substantial.
A Specialist Term Most Competitors Miss
One concept that rarely appears in consumer-facing heat pump discussions is the coefficient of performance (COP). This metric measures how much heat a pump delivers per unit of electricity. A COP of 4 means the system produces four kilowatts of heat for every kilowatt of electricity used. Baglino’s work on Tesla’s octovalve system suggests he understands how to optimize COP across a wide range of operating conditions. That expertise could translate directly into residential products that outperform current market leaders by a meaningful margin.
From Octovalve to Home: The Technology Foundation
Baglino is listed as an inventor on a Tesla patent for a thermal management system that uses two coolant loops and three-way and four-way valves. That system allows the vehicle to harvest heat from the traction motor and use it to pre-heat the battery. When you fast charge an EV in cold weather, a warm battery accepts energy faster than a cold one. That simple trick — moving waste heat where it is needed most — improves both performance and longevity.
That patent laid the groundwork for Tesla’s octovalve system, which debuted in the Model Y. The octovalve manages cabin temperature, battery temperature, and motor temperature all within a package roughly the size of a suitcase. When it launched, it was more advanced than anything competitors offered. The system used a single octagonal valve block to route coolant through multiple paths, reducing complexity and weight while increasing control precision.
Why Residential Heat Pumps Are Easier
During a 2022 earnings call, Baglino and Elon Musk discussed the possibility of a residential heat pump. Baglino noted that making a heat pump for a home would be easier than for a vehicle. “Way harder in a vehicle,” he said. “It’s so constrained on mass and volume and energy.” In a car, every gram and every cubic centimeter matters. The system must survive extreme vibration, temperature swings from minus 30 to plus 50 degrees Celsius, and tight packaging constraints. A home heat pump faces none of those challenges. It can be larger, heavier, and designed for a stationary environment.
That comment reveals a key insight. If Baglino and his team already solved the hard problem — building a compact, reliable, high-efficiency heat pump for a vehicle — then adapting that technology for a home should be relatively straightforward. The core thermodynamic principles are the same. The control algorithms, valve designs, and coolant loop architectures can be scaled and simplified for residential use.
Shared Headquarters, Shared Vision: The Heron Power Connection
The fact that Sadi Thermal Machines shares its Scotts Valley address with Heron Power raises intriguing possibilities. Heron Power sells solid-state transformers, which are fundamentally different from the traditional copper-and-iron transformers found in every home. Solid-state transformers use power electronics to convert voltage levels with higher efficiency and greater control. They can manage bidirectional power flow, integrate with solar panels and battery storage, and communicate with smart home systems.
Imagine a future where a single enclosure sits outside your home. Inside, a solid-state transformer from Heron Power converts grid electricity to the exact voltage your heat pump needs. The heat pump itself, designed by Sadi Thermal Machines, uses advanced valve technology and coolant loop optimization to achieve a COP of 5 or higher. The two devices communicate with each other, adjusting power draw and thermal output in real time based on weather forecasts, electricity prices, and your daily schedule. That is the kind of integrated energy system that Baglino’s two startups could deliver together.
Potential Synergies That Competitors Lack
Most heat pump manufacturers buy their power electronics from third-party suppliers. They have limited control over how the transformer and the heat pump interact. By developing both in-house, Baglino’s companies could achieve a level of system-level optimization that competitors would find hard to match. The shared headquarters also means shared engineering talent, shared testing facilities, and shared supply chain relationships. That kind of synergy reduces costs and accelerates development timelines.
What This Heat Pump Startup Could Mean for Homeowners
For the average homeowner, the arrival of a new heat pump startup founded by a former Tesla executive is more than just industry gossip. It could signal a shift in what is available in the residential HVAC market. Current heat pumps from brands like Mitsubishi, Daikin, and Carrier are reliable and efficient. But they are also expensive to install, especially in older homes that lack ductwork. A retrofit can cost anywhere from $5,000 to $15,000 depending on the system type and complexity.
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If Sadi Thermal Machines can bring a product to market that is easier to install, more efficient, and priced competitively, it could accelerate the adoption of heat pumps across the United States. That matters because heating buildings accounts for roughly 13 percent of total U.S. greenhouse gas emissions. Replacing gas furnaces with heat pumps is one of the fastest ways for individual households to reduce their carbon footprint.
Cost Comparison: Heat Pumps vs. Gas Furnaces
A typical gas furnace operates at 80 to 95 percent efficiency. That means for every unit of energy in the gas, 80 to 95 percent becomes heat. A heat pump with a COP of 3.5 delivers 350 percent efficiency relative to the electricity it consumes. Even accounting for the fact that electricity often comes from natural gas power plants, heat pumps still produce fewer emissions than direct gas combustion in most regions. And as the grid gets cleaner, the environmental advantage grows.
On the cost side, the upfront price of a heat pump is higher than a gas furnace. But the operating cost is often lower, especially in regions with moderate winters and reasonable electricity rates. Over a 15-year lifespan, a heat pump can save a homeowner $500 to $1,500 per year compared to a gas furnace, depending on local energy prices. Federal tax credits and state rebates can also offset the initial installation cost by up to $2,000 or more.
The Installation Challenge
One of the biggest barriers to heat pump adoption is installation complexity. Many contractors are more familiar with gas furnaces and central air conditioners than with modern heat pump systems. They may oversize the unit, choose the wrong refrigerant, or fail to optimize the ductwork. Baglino’s experience with Tesla’s vertically integrated approach — designing hardware and software together — could lead to a product that is simpler to install and configure. If the system arrives with pre-charged refrigerant lines, plug-and-play electrical connections, and an app-guided setup process, it could reduce installation errors and lower labor costs.
The Broader Trend: Tesla Alumni and Clean Energy Innovation
Baglino is far from the only former Tesla executive to launch a clean energy startup. The list includes companies working on battery recycling, solar roofing, electric vehicle charging infrastructure, and grid-scale energy storage. What sets Baglino apart is his direct experience with thermal management. He did not just manage a team that worked on heat pumps. He was an inventor on the foundational patent. He understood the thermodynamics at a deep level. That technical credibility is rare among startup founders in the HVAC space.
The broader trend reflects a simple reality: Tesla trained a generation of engineers and managers in the art of building energy products at scale. Those people are now spreading across the industry, applying the same principles to different problems. Sadi Thermal Machines is one of the most promising examples because it targets a market — residential heating — that is enormous, fragmented, and overdue for innovation.
What the Market Looks Like Today
The global heat pump market was valued at approximately $56 billion in 2024 and is projected to grow at a compound annual rate of about 10 percent through 2030. Europe leads in adoption, driven by policy mandates and high energy prices. The United States lags behind, with heat pumps installed in only about 15 percent of homes. The Inflation Reduction Act of 2022 included generous incentives for heat pump adoption, but uptake has been slower than expected due to supply chain constraints, installer shortages, and consumer confusion about the technology.
A startup with a strong brand, a clear value proposition, and a product that simplifies the decision process could capture significant market share. Baglino’s association with Tesla gives Sadi Thermal Machines instant credibility with early adopters and investors. The challenge will be translating that credibility into a product that appeals to mainstream homeowners who may never have heard of the octovalve or the Carnot cycle.
What Comes Next for Sadi Thermal Machines
As of now, the startup remains in stealth mode. No product announcements, no pricing details, no release dates. The company filings and LinkedIn profiles confirm its existence, but the specifics of what it is building are still under wraps. That secrecy is typical for early-stage hardware startups, especially those founded by high-profile figures. Baglino and his team are likely focused on prototyping, testing, and securing supply chain partnerships before making any public claims.
Given Baglino’s comment on the 2022 earnings call — “People should do it anyway” — it seems clear that he believes residential heat pumps are a necessary part of the energy transition. With Sadi Thermal Machines, he is putting his engineering reputation behind that belief. The next 12 to 18 months will reveal whether the startup can deliver a product that lives up to the legacy of its namesake.
For homeowners, investors, and clean energy enthusiasts, this is a story worth watching. A well-funded heat pump startup with deep technical roots and a clear mission could be exactly what the residential HVAC market needs to finally break out of its incremental improvement cycle. If Baglino and his team succeed, the way we heat our homes could change as dramatically as the way we drive our cars.
