Bad? Tesla is wasting its time with the Gigafactory because costs are dropping so fast — faster than every “expert” predicted — that the Model III would have hit its pre-incentive price target of $35k without the Gig.
Good? The Gig should drive costs down even further, making the III more profitable at $35k or inviting an even lower retail price, and making Tesla home batteries all the more compelling. Plus Tesla needs the Gig anyway just for volume’s sake. Without it, Tesla is forever confined to niche status and cannot hope to branch into clean energy storage.
TeslaMondo sayeth: Good! Imagine if costs were skyrocketing? That would stifle EV acceptance overall and make Tesla’s advantage both less impressive and less relevant because the retail price tipping point would still elude. We saw what happened when the Prius hit the tipping point. Early adopters of 1997-2003 were run over by a stampede of middle adopters from 2004 – 2007, and now the Prius has four successful variants for late adopters and repeat buyers, a true “franchise.” So it’s very good to see pure EVs fast-approaching a tipping point of their own. But what of those old-school hybrids, and neo-hybrids like the BMW i series (pictured)? Are they, as Elon has opined, mere “amphibians,” vulnerable and awkward creatures with limited walking ability and a constant need to stay wet? An evolutionary curiosity? Seems so. Yes, it seems Tesla will lead us to walk the earth, and stay dry, a lot sooner than imagined.