Thinking about Tesla’s Gigafactory

Wow! Elon Musk has proved before that he is a bold risk taker. He is rolling the dice again, this time to build an enormous battery manufacturing facility. Why? Because he has to reduce the cost of batteries in order to sell more electric cars and solar energy panels. Can he reduce costs in his own factory? The jury is out. A lot of these costs are for materials (over 75%) and they are relatively fixed. BI offers a more detailed look.

What will happen? Who knows. But my guess is that by entering the field, Musk will accomplish two strategic objectives before he starts producing. First, he will put pressure on other battery manufacturers to innovate faster. Second, he opens the door for more battery design thinking.

Let the games begin!


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