It's not the fact they invest in manufacturing, it's the size of the investment compared to company size/assets.
Factory is supposed to pay for itself before its product becomes deprecated.
Looking at how expensive this gigafactory is - how many years will it take before profits from selling li-ion batteries cover the equipment & construction costs?
Some projections say peak output is expected by 2019-2021.
Doesn't this imply that today's technology will still be competitive and in demand 6-7 years from now?
I'm assuming gigafactory uses chemicals and tech that powers current generation of Tesla cars. Because if they had something significantly better they would not care about 2019, but would instead die to get it to market ASAP. Not caring about unit price or volumes. Just to prove that it works and to capture the high end market.
And my second assumption is they don't plan to lose money on this project.
> Some projections say peak output is expected by 2019-2021. Doesn't this imply that today's technology will still be competitive and in demand 6-7 years from now?
Tesla never said they will be building today's batteries in the plant and I would be surprised if your assumption is correct. They likely have projections on their R&D and can also project how long it takes to build massive capacity on what they are building.
All major manufacturers of all complex products are faced with the same challenges. Management must match R&D to production or they will have huge misses. Manufacturing true technologically advance products is tough.
There are many examples of companies that simultaneously invest in R&D while making far out production capacity investments: Intel, all Pharmaceutical companies etc. etc.
If you can think of some companies that invest heavily in R&D, then stop investing in R&D and start investing in manufacturing, I would be interested in learning about them and why.
I don't know how Intel operates. Did they start building a 90nm factory before they finalised the process of making a 90nm chip? Can they upgrade a 90nm plant to start producing 45nm, and will it cost less than half of the original spend?
As for pharmaceuticals - I'd expect their plants to a) be capable of producing multiple different compounds and b) equipment to be modular. Research & clinical trials are expensive, reconfiguring equipment to make newly discovered drug is cheap. Once proven to work, drug can be replicated fairly quickly and cheaply, that's why they push so hard against any patent law reform.
So is this factory a sign that Tesla is settling down on the current levels of cell capacity, charging times, weight, etc?
I.e. they don't believe in a breakthrough before 2020, do they?