Welcome to Tesla Motors Club
Discuss Tesla's Model S, Model 3, Model X, Model Y, Cybertruck, Roadster and More.
Register

Behold the Terafactory (aka Terrafactory)

This site may earn commission on affiliate links.
Opening Tesla patents may have some advanges for the Terrafactory. Specifically, as the battery technology is better understood, it may be easier for researchers in universities, startups, and other organizations to improve the design. Suppose for example someone had an idea for a carbon anode. They could develop that anode within the Tesla architecture and determine if it improved actually improved the overall battery pack along any key dimensions. If the patents are open such that any adaptations are also open source, then Tesla will have the option to benefit from this innovation. This motivates robust research accross the talent pool, focuses that research on innovations Tesla can use, and secures access to the fruit of that research. For example, a graduate student do her dissertation research in nanotechnology might attempt do develop something within the Tesla architecture. Even if this does not pan out a production ready advancement, she may well land a job with Tesla and be thoroughly upto speed on the technology and in a good position to make a solid contribution. This is excellent recruiting for Tesla.

So returning to the Terrafactory theme, open source technology may be the most efficient way to harness the research resources necessary to keep doubling energy density every ten year. Much of the talent needed may still be in school, even grade school. Put this technology in the hands of young people and see what they can do.
 
How will Elon defeat the hoards of ICE makers and Oil Overlords, especially considering that Tesla is so small. Tesla could ramp up production 50% every year for the next 10 years and still be only satisfy 1% of the global market for new cars. The big boys laugh. Elon can dash about and grab all they attention, but it won't make a dent in major auto market share. While Tesla beats incredible odds to gain 1% in 10 years, the big boys will grow on the 2% or 3% growth in global demand every year. So Tesla is quite harmless in the big picture.

It is a story not unlike that of David and Goliath. Day after day the Philestines taunt the Israelites. What can they do? The Philestines are many and their king is powerful, while the Israelites are few and weak. Besides, the Philestines have a champion who is very large, strong and skilled in combat. The people must endure the taunting daily because no one can defeat Goliath. And yet a boy steps forward to defend the honor of his people not with long spears or a great sword, but with a slingshot and a few pebbles.

How does he do it? How does he take down Goliath? Well, he takes out his pen and signs away all of Tesla's patents, hurling the technology into the hands of any who might want to take up this fight. The tech is out there, and it remains to be seen who will take it up. Who will cast their lot with Tesla? Who will claim their share in the mythical Terrafactory?
 
Last edited:
So why should the Terrafactory matter to shareholders. Sure, the Terrafactory will make it possible to virtually eliminate all ICE vehicles from the road, a transition that will take about 60 years. Sure, this may be the best way to halt global warming and save the planet. Sure, the abundance of energy storage and distribute power generation will unleash economic development across the globe and in every forgotten village passed over by the age of electric utilities. Sure, lots of unimaginable good will arise in the age of the Terrafactory, but the nervous Tesla shareholders want to know what's in this for me. It's all well and good for Sir Elon to play the EV Czar in the UK. Go ahead throw all of Tesla's good patents to the dogs. It wouldn't be the first time swine have trampled pearls. Elon, you need to explain it to me. What's in it for the shareholder?

Few will understand the worth of the Terrafactory until it's day has come. If you understood, you would sell all your other investments and buy the Terrafactory.

Don't look for the big auto players to build the Terrafactory. BMW, GM, Toyota and the like. They will not set aside their ICE production to lay hold of the Terrafactory. They are too invested in what they've got. The first tier automakers will not lower themselves to embrace the Terrafactory. It is nearly pointless to set the patents within their reach. Their trotters are only good for trampling. Of course, they'll make a show of working with Elon. They may even work out alliances for the Supercharger network, perhaps if they can water down the technology. But would any self respecting first tier automaker really lower itself to become a Tesla clone? No, it would be easier for a camel to pass through the eye of a needle.

It remains to be seen who will travel with Tesla. Who will be willing to become a Tesla clone? Who will lay claim to their share of the Terrafactory?

There is more to this story. Stay tuned.
 
To understand where Musk is going with Tesla, the gigafactories, and open source patents you need need a good appreciation for science fiction. I mean the quite seriously. You need to be able to open up your imagination and see worlds that we have not known. To this end I've started a thread for telling the story yet to be in a science fictional, if not mythological, mode. We all need to be thinking much bigger about all of this. So stop by and add your imagination to "Behold the Terrafactory." http://www.teslamotorsclub.com/showthread.php/32119-Behold-the-Terrafactory
 
During the "Patent Webcast" I sensed nothing but self-confidence in Elon's voice. Did anyone sense anything different? We are in the midst of a multi-billion dollar investment. Elon Musk has captured the world's attention, with his gravitas, intellect and common sense. Relative to effects of climate change, 5 billion dollars is a paltry sum.
Right, if you had the vision of Musk, you would have great confidence too. Actually, $5B is a small price to pay for a 5% share of the Terrafactory. http://www.teslamotorsclub.com/showthread.php/32119-Behold-the-Terrafactory
 
How will Elon defeat the hoards of ICE makers and Oil Overlords, especially considering that Tesla is so small. Tesla could ramp up production 50% every year for the next 10 years and still be only satisfy 1% of the global market for new cars. The big boys laugh. Elon can dash about and grab all they attention, but it won't make a dent in major auto market share. While Tesla beats incredible odds to gain 1% in 10 years, the big boys will grow on the 2% or 3% growth in global demand every year. So Tesla is quite harmless in the big picture.

It is a story not unlike that of David and Goliath. Day after day the Philestines taunt the Israelites. What can they do? The Philestines are many and their king is powerful, while the Israelites are few and weak. Besides, the Philestines have a champion who is very large, strong and skilled in combat. The people must endure the taunting daily because no one can defeat Goliath. And yet a boy steps forward to defend the honor of his people not with long spears or a great sword, but with a slingshot and a few pebbles.

There's a huge misconception about David and Goliath that it's some small slingshot. It wasn't. Slings were a common weapon and caused serious damage. I really wouldn't like to be hit by a stone the size of a golf-ball traveling at 60mph. Expert users were extremely accurate. So this "boy" was an expert with the sling and smashed Goliath's leg (forehead is believed to be a mistranslation, since their helmets would have forehead protection), leaving him helpless on the ground.

Malcolm Gladwell did an interesting TED talk on it, postulating that really Goliath would have likely have been a lumbering giant.

Anyway, I'm sure the Horde is well aware of the vulnerability, since it's not just a matter of how many you sell, it's what margin you get on them. BEVs will attack the high end, high margin first and manufacturers depends on the high margin vehicles for profit.
 
BEVs will attack the high end, high margin first and manufacturers depends on the high margin vehicles for profit.
Why I haven't thought of this before?
It all makes sense now... why 'everybody' is making clown vehicles as cheap as they only can, as limited and as fugly as they only can.
They don't dare to make anything 'really good' and threaten their existing more expensive high margin vehicles. They would destroy their short term profits bigtime.
 
I'm with you. This isn't one person's story. This is Tesla's story.

Bonnie, you're right. This is not one person's story. This is our story. This is the story we are telling, and we are telling it together. I'm sorry if anyone finds off-putting my creative spelling of Terrafactory. It is curious why variations in spelling would engender so much difficulty. We all have different views of what the future holds for Tesla and what strategies would best advance that future. These are the differences we should discuss, and this is the diversity of perspective we should embrace. My aim with this thread is to give us a space to tell our stories of Tesla in imaginative ways. It is fitting that each of us will have our own peculiar ways of telling our stories. I know I have my own. Tell me yours. What will the EV industry look like in 40 years? How will we get there?
 
I'm sorry if anyone finds off-putting my creative spelling of Terrafactory. It is curious why variations in spelling would engender so much difficulty.

Spelling words in a way that maximizes rapid comprehension is an important component of clear communication. It does matter.

Or alternatively: spehlin whards curactly mehkes eh diphehrance en undrsatandin wut yer thring ta say.
 
So the earth is a factory that builds land? That's what I get from the title and the explanation. If this is supposed to be about the Terafactory and the possible game changing effects it will have on BEVs the spelling makes no sense.
 
So the earth is a factory that builds land? That's what I get from the title and the explanation. If this is supposed to be about the Terafactory and the possible game changing effects it will have on BEVs the spelling makes no sense.

Until we colonize Mars or start mining asteroids, the Earth is the only place we can manufacture anything useful for humankind. The Earth is the factory we must share. Is a terafactory, a factory capable of producing 1 TWh of battery packs, possible on this Earth? How many gigafactories can the Earth sustain with sufficient natural resources? 10? 20? 200?
 
Until we colonize Mars or start mining asteroids, the Earth is the only place we can manufacture anything useful for humankind. The Earth is the factory we must share. Is a terafactory, a factory capable of producing 1 TWh of battery packs, possible on this Earth? How many gigafactories can the Earth sustain with sufficient natural resources? 10? 20? 200?

More than 200. The key is recycling. The better the recycling, the closer you get to needing {annual demand} x {product lifetime} x {production and distribution factor}. And of course, batteries are great for recycling because they're boxes.
 
More than 200. The key is recycling. The better the recycling, the closer you get to needing {annual demand} x {product lifetime} x {production and distribution factor}. And of course, batteries are great for recycling because they're boxes.

Super. Now we see why gigafactories must include reprising and recycling. These are in the grand scheme non-optional components.

Now add to this that technology can continue to double the energy capacity of a kg of recycled material. If this pace of doubling exceeds the growth rate of the human population, then we have a chance of satisfying global demand in perpetuity. So this leads us to needing only a fixed number of gigafactories on Earth until the end of time.

So how many gigafactories might the planet ever need? 20? 50? 200? 1000?
 
There's a huge misconception about David and Goliath that it's some small slingshot. It wasn't. Slings were a common weapon and caused serious damage. I really wouldn't like to be hit by a stone the size of a golf-ball traveling at 60mph. Expert users were extremely accurate. So this "boy" was an expert with the sling and smashed Goliath's leg (forehead is believed to be a mistranslation, since their helmets would have forehead protection), leaving him helpless on the ground.

Malcolm Gladwell did an interesting TED talk on it, postulating that really Goliath would have likely have been a lumbering giant.

Anyway, I'm sure the Horde is well aware of the vulnerability, since it's not just a matter of how many you sell, it's what margin you get on them. BEVs will attack the high end, high margin first and manufacturers depends on the high margin vehicles for profit.

"Lumbering giant" I like it. The warfare was asymmetric. Goliath would have won against any other lumbering giant. But David knew that one well placed stone with enough velocity behind it was worth more than weight of the king's armor. So Elon speaks of the velocity of innovation being a stronger advantage than patents. Technology that peirces the industries most profitable markets is the right place to hit. High velocity of innovation sustains the impact. Patents just are false security like bulky armor.
 
Now for the fun part. Let's see how an investor may profit from the theory we've been developing and recent developments with the opening of patents. To recap, the theory I've been advancing is that the world will only need a fixed number of gigafactories in perpetuity owing to the potential for technology to grow energy density faster than global population growth. I believe that peak number of gigafactories could be as few as 20. Even if it proves to be 30 or 40, the same strategic implications follow. So for sake of argument, let's assume the planet never needs more than 20 gigafactories. Currently it is believed that the planet needs 200. If automakers and their investors overstate the number of gigafactories needed, this could lead to disastrous strategic mistakes. For instance, suppose GM believed that 200 would be required. This of course is a $1T investment a cross the industry. GM may be tempted to think that the have plenty of time. That they can wait until EV pent ration gets upto 3 or 4% before investing in their first gigafactory. But, by that time there may well be 10 to 15 gigafactories already built or in the pipeline. However, if only 20 gigafactories are ever economically justified to be built, they are waiting until there will be quite poor return on their investment. If they want to maintain a 10% share of the auto market. They will need 2 gigafactories. Sadly there may not be enough time to build 2 of them. They may be too late to the party and find themselves needing to make an investment that destroys shareholder value in an attempt to preserve market share, or GM will irrevocably lose market share. So there is an existential risk to any automaker that overestimate how long they can put off buying into the Terrafactory.

So the race is on. The companies that build out the first 10 gigafactories will control half the new car market, and they will realize the most favorable returns on those investments. So this is why it is of utmost importance that Tesla build out the first gigafactories. They are contemplating 2 or 3 gigafactories in North America. They could build these out in rapid succession. Also I anticipate that they could pursue 1 or 2 in Europe and 2 or 3 in Asia. So altogether 5 to 8 gigafactories to be built within the next 10 years.

Will Tesla investors support this sort of rapid build out? We are talking about an investment of $25 to $40 billion. What investors will need to know with great confidence is that this investment will be worth locking in 25% to 40% of the global auto market. No current automaker has nearly that much market share. This is truly an unprecedented opportunity due to genuine technological disruption. This is one of the largest land grabs every. Those who own shares of the Terrafactory control the industry until the next major disruption which could be another 100 years or more.

So how can investors profit? Simple, invest in those companies that are building our gigafactories. If Musk is able to lead shareholders down this path and build out 5 or more gigafactories, then it will be an unprecedented opportunity for investors to hold onto these shares, provided the share price does not get ridiculously high. Basically, under this sort of aggressive build out, Tesla's market cap could run in excess of $1 trillion, as Musk has suggested. But it will require that investors truly have the resolve to stay this accelerated course.

The second strategy has to do with investing in Tesla clones. I will discuss this in future post.