Factory Transformation Determines How Fast We Get the Future

How quickly will all cars and trucks become electric? How quickly will we have thousands of reusable rockets? We can see the future being developed but the speed of transformation and the speed of the next transformation depends upon how successful we are in reinventing the factory.

In 2016, Tesla and Elon Musk said they were focused on the machine that makes the machine — turning the factory itself into a product. A first principles physics analysis of automotive production suggests that somewhere between a 5 to 10 fold improvement is achievable by version 3 on a roughly 2-year iteration cycle. The first Model 3 factory machine should be thought of as version 0.5, with version 1.0 probably in 2018.

China’s transformation has involved creating factory cities and regions. China has many factories covering city-sized areas to make smartphones, high-speed trains and nuclear power plants. China’s economic rise was by becoming the world’s factory. China mass-produced buildings, cities, trains and other products.

SpaceX is making a collection of factories and production facilities to mass-produce fully reusable Super Heavy Starships.

In 2020, Elon talked again about massively speed up car factories. If you optimized every cubic meter of the factory, then you could think of the factory-like a CPU. You can move things closer together and increase the clock speed to increase auto production throughput. These optimizations mean improving ten times and up to 100 times.

In 1913, Henry Ford installed the first moving assembly line for the mass production of an entire automobile. His innovation reduced the time it took to build a car from more than 12 hours to one hour and 33 minutes. Ford sped up production by 8 times. If Tesla and others are able to achieve 10X production improvement then the impact is as much as the Ford assembly line.

Tesla has been adding gigapresses to reduce parts in a vehicle and speed up production. Tesla is changing to larger battery sizes so one large battery provides the power of 5 smaller batteries. The change will also increase the productivity of the battery lines by 7 times.

Tesla new factories in 2022 will be about ten times as productive. It will have taken them an extra two to four years to achieve the goal.

It could be 2028-2035 before Tesla and SpaceX can achieve another ten times improvement in factory and production efficiency.

Other companies are already trying to adopt Tesla’s approach to factories. All battery makers make gigafactories for batteries. Solar panel makers all are making gigafactories for solar cells.

Tesla with the 4680 batteries and new generation battery lines will be making 200 GWh per year with each factory. If each battery terafactory costs $2 billion then Tesla could build ten of them for $20 billion. 2 TWh/year of batteries would be enough for 20 million cars per year with 100 KWh battery packs.

Tesla with another generation of battery and factories could have 1000 GWh per year (a TWh per year of batteries per factory). If each battery terafactory costs $2 billion then Tesla builds ten of them for $20 billion. 10 TWh/year of batteries would be enough for 100 million cars per year with 100 KWh battery packs.

SpaceX already is on track to build 2 Starships every week (100 per year) with a staff of 3000. This would bring the cost per Starship to about $10 million. A further ten times improvement in production capacity would be 20 Starships per week or 1000 Starships per year. The amount of staff and facilities could also be increased.

The speed of transformation of cities would be impacted with faster and more inexpensive tunneling. Elon has spoken about speeding up tunneling by 14 times.

China’s Broad Group had developed rapid skyscraper construction.

Broad Group was now focusing on new lightweight cylinders to make construction lighter, faster and stronger.

The IT and Internet industries are already $4 trillion a year businesses. The software and Deep learning systems are providing the interfaces and over the air up-dates to support a rapidly expanding volume of smart devices.

SOURCES- Tesla, SpaceX, Broad Group
Written By Brian Wang, Nextbigfuture.com

31 thoughts on “Factory Transformation Determines How Fast We Get the Future”

  1. Capitalism is based on the motivation of the sin of greed. Pragmatically it can work if tightly controlled to keep its base instincts under wraps. Most people would like to acquire wealth without effort. They scream for a market without restrictions when what they really want is wealth without work. That's not capitalism, that's piracy.

    The real world has two concurrent economy. One that is motivated by profit aka greed. And that other that is motivated by the concern of people for each other aka socialism. Both exist. The trick is to find the correct balance and the appropriate role for each.

  2. I am instantly suspicious of anyone who says the word 'capitalism' as if it's a sin (where Communism somehow isn't) but for sure, we are seeing the death of the middle class – and it ought to concern us all.

  3. If the american retirement system is – if I understand you correctly – largely based on bying government bonds to people to then sell of at their old age, then we have an inflation problem.

    The bonds have a nominal value that is decreasing with inflation. What if every dollar becomes worth half as much due to corona stimulus packages? Would then that not mean that the real value of future pensions would be cut in half?

  4. Not necessarily. Imagine that you "phase" out 5% of the payers every year and 5% of the recipients. Then, at any given year, there would be financial balance. Or close to it. This is why it would be good method instead of going "cold turkey".

    About the bonds. Bonds are of course used to finance all kinds of things that the government wants to do. Going bankrupt would prevent any private actor from investing – and hence financing government activities – for a very long time. So my bet is that the government will do anything to keep the system alive.

    But I would of course prefer a retirement system that consisted in private funds instead, not something that is dependent on the political will of the comming generations.

    Mind you, it is a much better system to issue bonds to pension funds than a vague promise to funnel an unknown portion of an unkown money stream in 20 years time. The bond, at least, has a nominal value.

  5. If you make solar panels using lunar silicon for the cells, and lunar aluminum reflectors for the furnaces (mineral reduction, then crystal growth), the more panels and furnaces you have, the more panels and furnaces you can make.

    Thus you get exponential growth. Cost is then limited by non-exponential components, like copper for motors. Copper is scarce on the Moon.

  6. > why is social spending growing so fast?

    The baby boom generation (a lot of people) is now 56-74 years old, i.e. in or close to retirement. So more people collecting Social Security and using Medicare. Later generations are not larger, but about the same size, which is different than the generations before Boomers, which were smaller. So the ratio of workers paying into the system to people collecting from the system is lower.

    On top of that, life expectancy has generally been increasing (2020 was an exception). So the average number of years someone collects from the system has increased relative to the number of working years you pay into the system.

    The solutions to this problem are to raise the age you start collecting, eliminate the cap on contributions so high income people pay fully, and invest the trust funds between pay in and collection into something better than Treasury bonds (which is what the funds are held in now).

  7. 2 things impressed me about this article. How Testla is apparently leading the way in faster more efficient manufacturing AND the WSJ utube video showing the Chinese putting up a 57 story building in 19 days. Keep it up and this will be a vastly different world in ten years.

  8. The energy is free, even if the collectors are not. Even producing solar cells on Earth is not free, because of the Earth impacting activity, but in Space, it is. Just do it without paying anyone. Free does not mean I provide delivery, just *free*. Actually, power beaming, H and Space Solar are so much better than Earth only solutions that they are not free, they are paying!

  9. Vast majority of inner city dwellers don't own cars. When they need a car they call a taxi. In the future they will call a robo taxi.

  10. As long as the capitalists understand that consumption must equal production. Labor must reap part of the improvement in productivity or else we will have a long term depression.

  11. "Free" energy?
    If you are talking about solar in space, it might well be cheap but not free, because the collectors will at best be cheap rather than free.

  12. Between battery degradation from fast charging & the difficulty of generating & transmitting the high power for short times, I think we should go for either battery swapping stations or plug in hybrid cars.

  13. That leaves the old system totally broke. The problem is boomers own a bunch of gov bonds that the gov is responsible for repaying. Sound familiar? The gov has no money, only people do, unless it is merely printed stuff called money. Of course young people don't want to cover the debt, it is not theirs, it is the gov's. Gov did not invest for retirement, they spent and owe.

  14. I am just curious, what should we spending money on? And why is social spending growing so fast? I do not know the answers to my questions. I am seeking to further understand the issues. It seems the two items you picked were health related. As you seemed hazy about Social Security. I am no expert on the US government. We seem to spend money inefficiently in most sectors. What about developing medical technology? Think about the yields from that. IT and computers or electronics are mature industries that was nurtured by the government. What is next? IT is no longer a blooming jewel but a market performer and a little long in the tooth. Electric cars on the technological Timeline are ancient (Paris almost mandated all Parisian Taxi's be electric in 1897.) The technology is vastly refined but the basic concepts are not new.
    I maybe wrong but I am beginning to think Americas is lost. What is the fantasy of the future the 50th Star Trek prequel. When I was young and followed the Space Program after the Lunar landing we were going to Mars in 1991. And if we are spending to much in what appears to be peoples health (Medicaid and Medicare are health oriented.) What are the alternatives? Unless there is massive fraud? If we do have major health issues maybe solving them can be one new Hi Tech?

  15. Yeah, it's not possible unless there is a similar efficiency gain in the mining sector and/or recycling, especially for raw materials for batteries. Lithium is already in high demand and expensive because of it. Will countries allow unmitigated strip mining just so Tesla and increasingly others can sell more cars? Ferocious R&D will lead to other material shortages too.
    And no one has really come up with a broadly spread network of charging stations that can charge up an EV in 5m for at least 300 miles (and accelerated battery degradation from 100% charge to <20% discharge can't be a "thing" much longer either, if people are going to be able to use EVs for long trips too). Without quick-charge, city dwellers won't be able to find enough places to plug in all their millions of EVs, and rural dwellers won't have enough range between stations without waiting for an hour for the people ahead of them to finish charging. We haven't seen these kinds of lines yet, b/c EVs represent only 3% of car sales currently, in spite of breathless predictions of market dominance by 2040: https://policyadvice.net/insurance/insights/electric-car-statistics/ Beware of exponential growth forecasts that don't address current very real problems and assume them away through growth. Batteries already account for 40% of the cost of EVs. The slow adoption of EVs in Japan is a warning that even advanced countries with progressive anti-pollution policies have to face customer acceptance problems.

  16. Well, Tesla has a short term goal of a factor of 4. See comment above. So another 2.5X in the next 10 years may not be impossible.

  17. At the battery investor day, Elon presented a way to reduce the battery capex by 76% and that was from a level of 1 billion USD per 10 GWh production capacity. So about 5 billion USD for a 200 GWh factory. Brian is a bit off in his numbers.

  18. The retirement account that SS holds for the person is an investment in US gov bonds, if you can imagine. Normally, a pretty safe investment for retirement. But the scale of SS bond ownership for boomers means that as we retire, those bonds are being cashed. The system would crank along at a steady pop growth rate w/o buying the bonds, just cash flow. Boomers had their large in total earnings stolen, as the payout was due later, and SS tax was not needed to support the few but very fertile parents of the boomers. Mr Ponzi has spent the money.

  19. "If Tesla and others are able to achieve 10X production improvement"
    The assembly line has been around for over 100 years, and efficiency experts have improved it a lot over time. Millions, if not billions, of dollars have been poured into improving efficiency of production.

    Am I alone in thinking a 10x improvement is a bit, shall we say, "optimistic"?
    Getting a 30% or 40% improvement is a lot. Doubling productivity is amazing.
    10x improvement doesn't seem realistic.

  20. Fortunately, Space is now becoming a "gold rush" economic situation. You borrow money to get there. You better be sure you have gold! We need Space for much more than debt repayment, but huge Space economic growth helps a lot with that. And I am libertarian.

  21. That ignores the "contract" nature of SS in America. My notion merely gives the orig contract, corrected for longevity. You simply socialize the decision. It is money I paid into an account, not welfare. It has been mis-spent, almost a Ponzi, but I was forced to do it instead of having that money AND incentive to take care of my own stuff.

  22. Forget judging the inputs, just look at the outputs. You've got the current financials, returns, income etc, so calculate the age of retirement that can be supported, and use that.
    Make it automatic that updates every year. THough probably best to "grandfather" in those people who are 5 years from retirement so that people don't get a nasty surprise with 2 months to go.

    (Pun, as is always the case, fully intended.)

  23. If I am remembering correctly, Ford had the workers NOT follow the car down the *prior design* assembly line, past parts, rather they stayed put and did the same thing to each car, division/specialization of labor.

  24. The obvious solution to US SS is to see what % of cohort was dead at retirement age when SS started, long ago, and adjust the retirement age to match that % in current situation. edit: make an adjustment for child mortality going way down, as they never paid in.

  25. If we get free energy, vacuum, heat, cold and mass movement (0 g), non Earth mining, easy 'fuges, on and on, this could take off!

  26. Actually I am pretty familiar with it, it is all on the CBO website as well as projections of debt. I chose the pie chart to make it simple for casual readers here.
    While I may be hazy on how Social Security affects the budget when it is not supposed to in this chart, there is no free lunch so like you said we are pretending it doesn't affect it when it cannot help but to.
    I am also not saying that some of this spending is not caused by a necessary need. Just because I do not believe it should be on the federal budget doesn't mean I believe that these are not root causes that need to be addressed. What I do believe is that this is creating a resource allocation issue. I also believe it should be possible to change this dynamic in ways acceptable to left and right with some compromise and creative thinking.
    I do believe it needs to change though for the good of our future generations. China, a communist country, doesn't have anything like the social spending we do. That doesn't indicate good things to me on our direction.

  27. Sit down, make a nice espresso, and get to work tracking that data down.

    It's no good going around writing comments, telling people, or even having firm political views about government expenditure on welfare if you don't have the numbers.

    I think that the USA, for no-doubt nefarious reasons, tries to pretend that social security is an entirely separate entity from the actual government budget, so look at that. I think the phrasing I've heard is "off budget expenditure" which is a sure sign of someone trying to be sneaky.

  28. "The IT and Internet industries are already $4 trillion a year businesses." Shows what we are capable of when we spend money on research, military or civilian. We desperately need to free up our federal budget from simple population maintenance to actually have the resources to get ahead.
    Yes, I am a fiscal conservative and think we need to severely pare back our social spending that is eating us up. Medicare, Medicaid and Social Security are represented in the graphic below, but I am a bit hazy on how Social Security fits into these. The only other major expenditures we have is military and debt interest, so this is how we spend the majority of our budget (and adding debt on top of it). Social spending is growing too fast, and we seem to be eating our seed stock instead of planting it for the future IMO.
    Elon doesn't run his companies like this and it's not how we used to run our government, that's for sure.


  29. The idea of living in a forever exponential growth world is a result of a communist mindset. For a starter I have looked for any source that corroborate that Tesla new factories in 2022 will be about ten times as productive (Of what baseline?) and found none. The means brought here of the the 4680 batteries and gigapresses offers improvement of about 20% each.

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