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There's good reason to believe that electric cars are the future and will soon be a massive market. I think there's also good reason to believe that Tesla has a
by HiJon89 9y ago
There's good reason to believe that electric cars are the future and will soon be a massive market. I think there's also good reason to believe that Tesla has a big head start on the competition and has the opportunity to dominate this market if they execute well.
For example, just look at the battery packs which are essential to an electric car. Tesla was unable to find a supplier that could meet their requirements, so they designed and produced their own batteries and now have a $5 billion gigafactory to increase production volume and decrease costs (with more gigafactories on the way). If you're another car company trying to enter the EV market, what are your options? Buy inferior battery packs at a higher cost from a different supplier? Try to replicate Tesla's battery technology and then convince your board to build a gigafactory so you can produce them at the required volume and cost?
- k-mcgrady 9y ago>> Buy inferior battery packs at a higher cost from a different supplier? Try to replicate Tesla's battery technology and then convince your board to build a gigafactory so you can produce them at the required volume and cost? Why not another option - battery manufacturer notices that if they build an equiv. battery they can sell to every car manufacturer in the world. With the higher volume they'll be able to do it for less than Tesla if they are only building for their own cars.
- HiJon89 9y agoHow long will it take them to catch up with Tesla (while Tesla is simultaneously advancing their own battery tech)? And even if they can hit that milestone, they'd presumably have some amount of profit margin built into the prices. So to actually compete with Tesla on battery price (and why would they even want to) they'd need to advance beyond Tesla in terms of manufacturing efficiency and/or volume. I don't know of any company poised to fill this gap in the foreseeable future.
- underwater 9y agoIt's called a factory. Gigafactory is a made up word.
- HiJon89 9y agoGigafactory is a proper noun referring to the specific battery factory built by Tesla; I just didn't bother to capitalize it
- ibejoeb 9y agoTesla seems primed to become the battery and software supplier for modern vehicles.