With its Gigafactory, Tesla could lower lithium-ion battery costs and become an Apple supplier
Why Apple Could Win Big With Tesla's Giant New Battery Factory — The first Tesla I ever saw was stripped down to the chassis, a bare-metal incarnation of the company's flagship electric Roadster …
Context & Ripple Effects
This is not Tesla's first turn as a merchant battery maker: back in May 2007 it signed a $43 million deal to sell batteries to Norway's Think, so the idea of Gigafactory output flowing to outside customers has a precedent in the company's own history.
What is new is the scale thesis — Wired argues a factory built at giga-scale could push lithium-ion pack costs down enough to open markets beyond Tesla's own cars — and the rumored landing spot for that surplus capacity: Apple. Both claims circulating today are unconfirmed, but they land on fertile ground, given Apple's confirmed preview of the iOS in the Car feature alongside iOS 7 last year showing it is already wiring itself into vehicles.
First-order effects
- If the supplier rumor proves out, Tesla would become an external cell vendor while simultaneously ramping Model S production, making the Gigafactory's utilization — not just car sales — the variable that determines its cost position.
- Apple would gain a path into automotive-grade batteries without developing cell chemistry in-house, complementing the software-side beachhead it established with iOS in the Car.
Second-order effects
- Automakers buying from Tesla would face the uncomfortable position of funding a supplier that competes with them in showrooms, forcing rivals to secure their own dedicated capacity rather than lean on the cheapest source.
- Consumer-electronics-scale demand meeting automotive-scale supply would put downward pressure on cell pricing across adjacent categories, squeezing smaller battery pack assemblers caught in the middle.
Third-order effects
- If the pattern holds, lithium-ion cells consolidate into a commodity input produced at gigafactory scale, shifting bargaining power toward whoever owns manufacturing capacity and away from device and carmakers who merely assemble it.
- That convergence would blur the boundary between the electronics and auto supply chains, setting up batteries as the shared strategic resource both industries bid over — with raw-material sourcing becoming the next chokepoint.
The trend: Battery cells are moving from bespoke components toward a shared commodity layer under both consumer electronics and electric vehicles, with whoever builds gigascale capacity first setting the price floor.