As auto producers look for alternative energies to gasoline-powered engines amid startling high CAFE standards and rising oil prices, Elon Musk thinks he has found the answer. By now, I should not have to fill you in on Musk’s innovative new company, Tesla. This seems to be one of the very legitimate solutions to our growing oil problem.
However, as it stands right now, lithium-ion batteries are incredibly expensive for how much power they actually produce, especially for automobiles. If we are going to use electric cars as our next power solution, there is going to have to be many more lithium-ion batteries on the market, and they are going to need to be cheaper. Right now, the Tesla is just a toy for the wealthy. But the market that it is opening up has almost limitless potential as of now.
To combat growing demand for the batteries, Musk is soon to break ground on the world’s very first “gigafactory”, specifically designed to make these technologies. Musk says that this is the very beginning, and that many more of these factories would have to be built in order to meet industry-wide demand, perhaps up to 200.
Musk projects that factories like these will be extremely helpful in driving down the costs of lithium-ion batteries, about 30 percent to be exact. This first gigafactory is going to cost about $5 billion and investors are clamoring to get a stake in the plan. Panasonic Inc. has already invested a large amount in this project.
It will be interesting to see how these factories affect the growing electric car industry and how much they will hurt oil refineries in the future.
– Zac Durkin