March 4th, 2014

Tesla plans to build a massive new lithium ion factory that would double world production volume. Doing so could dramatically change the car industry:

When Tesla first began working on its Model S saloon barely five years ago, lithium-ion batteries were priced at about $1,000 a kilowatt-hour (kWh). Manufacturers are notoriously secretive about pricing details, but industry insiders hint that prices have now slipped to anywhere from $400 to $750 a kWh. Even so, that means the 85 kWh pack in a Model S costs Tesla between $34,000 and $63,750. A study by the Boston Consulting Group projected that prices would need to come down to $200 or less per kWh to make electric vehicles truly competitive with the more familiar car that relies on internal combustion. The gigafactory would slash these production costs.

Tesla intends to do so, presumably, to reduce cost enough to make an affordable Tesla.

People enjoy making Hyperloop jokes about Elon Musk, but there’s really no one else in the world doing such ambitious work. How can you not love that?