|
Elon Musk is on a Roll...
Warning! The following blog post has a distinct pro-Elon Musk slant. (I'm a fan)....
Elon Musk is on a roll. His company SpaceX is winning contract after contract and is on the verge of revolutionizing the rocket industry...space launch industry?...I'm not sure what to call that industry. Anyway, whatever it's called, SpaceX is revolutionizing it. Its successes are attracting lots of investor capital ($1 billion in January). Of course, SpaceX is Elon Musk's little side project...
Tesla Motors
Tesla Motors just recently announced that they would be selling batteries for homes.
This is the sort of pie in the sky thing that really aggravates me, I mean who in the world is going to buy a ......wait, what do those recent headlines say???
Tesla's Powerwall is already sold out through the middle of 2016, demand described as "crazy off the hook" by Elon Musk
Tesla announces 38,000 pre-orders for Powerwall home battery
oh....never mind then
A Giant Factory in the Desert
Right now Tesla Motors is building a giant battery factory in the Nevada desert called the "gigafactory" (as in gigawatts). In Elon Musk's own words "This will be a giant facility, We are talking about something that is comparable to all the lithium-ion battery production in the world - in one factory". (Source) It's a risky venture, costing billions of dollars.
So if you're a genius billionaire who needs to reduce the price of the batteries found in the electric cars you sell (a high cost), it makes sense to mass produce them on an epic scale and let the economics of scale lower your costs. Thus the gigafactory.
However, what if you build this giant billion dollar lithium ion battery factory and suddenly the demand disappears for your electric cars (say because oil drops below $50 dollars a barrel or your cars fall out of fashion), what then? Well, if you're Elon Musk you hedge by creating an alternate source of demand, ie Batteries for Homes. Of course, because you're Elon Musk you do too good a job and sell out a few years worth of batteries in less than a month. Likely leading to even more gigafactories.
A Cheaper Car for the Masses
Of course, once you have a giant battery factory you can sell your electric cars for cheaper:
Tesla is finally making a car you can afford - here's when it will be released
So these are coming. If your reaction to the idea of electric cars is "I'm not willing to sacrifice horsepower", then don't worry...
0-60 mph in 3.2 seconds
Not bad. Tesla Motors realized you could do more with an electric car, and did it.
So What's Next?
Well, there are a few things we can expect just based upon the nature of captialism:
Now that batteries are being mass produced on such a large scale, expect them to get gradually cheaper and better.
The cheaper and better batteries get, the cheaper and more appealing electric cars will become.
Tesla Motors will grow (in valuation) by leaps and bounds.
Other companies will get into the electric car business (Apple?)
This is what it must have been like to watch Ford Motor Co. grow in the early 20th century. It's an exciting time! I'm sure there will be bumps along the way, but Tesla Motors seems to be heading in the right direction (and SpaceX too!).
-R
|
Good Answers:
"Almost" Good Answers: