Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk has made a huge investment into the company’s new gigafactory in Nevada. This huge investment is not expected to give batteries just to Tesla electric vehicles, but also might manufacture batteries for other purposes. Bloomberg’s Cory Johnson talked on Bloomberg TV about Elon Musk’s big bet on battery technology.
Reports suggest that Tesla Motors Inc (NASDAQ:TSLA)’s new gigafactory is scaring the utilities and electric companies. Johnson pointed out that Musk is betting big on this new gigafactory by investing a lot billion on it to make cheaper batteries and in turn cheaper cars, depending on very old battery technology.
“This is really interesting I think, because of the big bets Elon Musk has made on this gigafactory, […] trying to turn this thing into giant factory to make somewhat cheaper cars, because of the somewhat cheaper batteries based on very old battery technology. So one of the big bets that Elon is making is that no one else will invent better battery for the next 20 years. All of the efforts that $2 billion spend by Federal government research and spent by companies like GM on trying to find a better battery which had failed thus far will continue to fail,” Johnson said.
Some might argue that battery technology has not advanced a lot in the last century, which makes Musk’s bet a very good one. Johnson pointed out that a lot of improvements are happening in battery technology trying to reduce the degradation rate. He added that invention of Lithium battery was the latest evolution in the battery technology.
Johnson talked about the second big bet that Tesla Motors Inc (NASDAQ:TSLA)’s Musk is making with this gigafactory. He said that Tesla Motors Inc (NASDAQ:TSLA) would be able to make half a million cars in a year with the new capability, but they have only demonstrated selling 100,000 vehicles thus far. He mentioned that it seems almost a ridiculous bet to aim at a 22 times business growth with the new gigafactory.
Johnson said that the Tesla Motors Inc (NASDAQ:TSLA) cars might not be enough the feed the gigafactories capability. He added that it might few more years for the factory to be operational and Musk’s bet is basically against the advancement in battery technology.
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