The cold logic behind Elon Musk’s $5 billion gigafactory gamble

[n2doc]

Elon Musk is placing an enormous bet on the world’s largest lithium-ion battery plant—a $5 billion, 10 million-square-foot “gigafactory” that would make enough battery packs to power 500,000 electric cars a year. That is four times the number of electric cars of any brand bought around the world last year, and a whopping 21 times Tesla’s own 2013 sales. In addition to betting on this monumental sales boost, Musk is hoping an inventive rival won’t eclipse his battery technology and render the gigafactory instantly obsolete.
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But the deck may be at least partly stacked in Musk’s favor. He appears to be banking not so much on a sharp swing in consumer taste as on a shift already underway in public policy. Over the coming decade, eight US states will begin to require carmakers to sell an estimated 3.3 million low- and zero-emission vehicles. In addition, California will require utilities to buy the capacity to store 1.3 gigawatts of electricity, enough to serve one million homes.
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When combined, the required mobile and stationary battery capacity will be so massive that Musk would be scrambling not so much to find buyers as to meet the demand, some say. “Industrywide, you are no longer talking about 500,000 or one million vehicles, but millions of cars that have to be on the road,” Ann Schlenker, director of transportation at Argonne National Laboratory, told Quartz.
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Musk says he will ante up $2 billion of the factory’s cost and raise the rest of the money. Here we examine his calculus.

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http://qz.com/214093/tesla-elon-musk-5-billion-gigafactory-gamble/

[ChisolmTrailDem]

1. He knows crude oil will go into decline soon and climate change wiil

force change. It's a good business decision to be on the forefront of mitigation of those two issues.

[n2doc]

2. Maybe so. Americans are too dumb to realize this and are still buying gas guzzlers

http://www.democraticunderground.com/10025012498

[Warpy]

3. Musk has been crazy as a fox so far

The only fly in the ointment here is that lithium ion technology is going to be supplanted by something better very shortly, prototypes are out there and the challenge to scale up to industrial production is very slowly being met.

Unfortunately for today, the Tesla is still incapable of handling the distances people out west routinely drive. That's the main thing holding it back from being mostly a city car. Some of the new battery technology charges more quickly as well as giving more distance between charges. Should he devote some of this billions toward the new tech, the cars will be long distance cars that will charge up while the driver eats his meals during long road trips. At that point, few people will want to drive stinkpot internal combustion engine cars.

[tridim]

4. Please make E-Bike batteries too Elon.

I've been researching like crazy and am very disappointed by what is currently (no pun intended) available.