I've never heard that view before. Do you know of some examples that fit that model?
The one I can think of that doesn't fit is Intel. They continue to innovate while investing in manufacturing.
The one I can think of that doesn't fit is Intel. They continue to innovate while investing in manufacturing.
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.
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.
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.