The cold logic behind Elon Musk’s $5B gigafactory gamble… but lithium-air or lithium-sodium

Musk is already making money from the zero-emissions laws. This year, the laws require that 1% of each car maker’s vehicle sales meet the zero-emissions standard (the percentage ramps up gradually to 15% in 2025.). If a car maker hasn’t done so, it must buy credits from a rival having a surplus.

Currently, Tesla is the go-to shop for emissions credits; since it manufacturers only electric cars, it is swimming in unneeded credits. Last year, each of its S models earned seven zero emissions credits, which sold for $5,000 each, earning Tesla $35,000 in added revenue for each car sold. The price is market-driven, but last year, Tesla earned $131 million from its surplus credits.

In a little-remarked-upon article in March, Nature magazine reported that IBM’s Winfried Wilcke, director of the Battery 500 Project, had a “change of heart” about lithium-air and had turned his favor to a technology featuring sodium. In an electric car, a sodium-air battery, he said, stood a better chance of meeting the economics needed to compete with conventional cars. It was a dramatic move, with the most bullish player in lithium-air—Wilcke himself—calling it a day.



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