Imagine if a Chinese company announced plans to build the biggest electric-vehicle battery factory the world had ever seen.
Up to $5 billion would be spent on a single plant to manufacture more power packs every 12 months than the world produced last year. The sprawling facility might cover 1.5 square miles (4 square kilometers), employ an army of 6,500 people, and drive costs down 30%, devastating any competitors that failed to keep pace. The company in question, furthermore, had racked up more than $1 billion of losses over the past seven years, and would post another $5 billion over the coming seven.
Does that sound like the definition of predatory overcapacity, hollowing out the world’s manufacturing sector in the service of aggressive Chinese mercantilism? If so, it’s worth considering that the facility we’re talking about is how Elon Musk pitched Tesla Inc.’s Gigafactory One, a half-hour drive east of Reno, Nevada, when he first announced it 10 years ago.
Add comment