Elon Musk's Bet Against Technological Innovation

No one knows how to disrupt a whole industry better than Elon Musk. After disrupting electronic payments, space exploration and automobile, Musk is all set to disrupt the utilities industry. The Gigafactory that Tesla Motors Inc TSLA plans to build will not only be a battery manufacturing plant, but as Musk foresees, a place to innovate Battery technology. The question is, can he do it again?

Bloomberg’s Cory Johnson recently discussed Tesla’s plan for improving battery technology.

“This is really interesting I think, because of the big bets that Elon Musk has made on this Gigafactory, they are borrowing $2 billion in convertible debt to try to turn this thing into a giant factory to create somewhat cheaper cars because of somewhat cheaper batteries based on a very old battery technology,” Johnson said.

“So, one of the big bets that Elon is making is that no one else would invent a better battery for the next 20 years. That all of the efforts of $2 billion spent of Federal Government on research, spent by companies like GM on trying to find a better battery, which have failed thus far will continue to fail.”

According to Johnson, another big bet for Tesla’s Gigafactory “has been that Tesla will get to half a million vehicles a year, which is a huge number from a company that can’t even sell a 100,000 vehicles in a year thus far.”

When asked about when the Gigafactory will open, Johnson said, “It’s going to take a few years still. So, it really is a bet into the future, ironically it’s a bet against technological innovation.”