Success of The Giga Factory Can Unlock Tremendous Value For Tesla

The centralization of the supply chain saves around 10%, a reduction in labor costs probably another 10%, but the rest of the savings are dependent on increasing demand for Tesla's vehicles. This is the trickier part and requires the success of the electric vehicle technology. If demand for Tesla's vehicles increases, it puts the company in a position where it has leverage over suppliers of lithium ion batteries and can negotiate lower prices. However, if demand stalls, then negotiating those pr...