The gigafactory concept is just domestic manufacturing. It cannot change how much Lithium there is in the ground, how hard it is to get to it in these quantities, and how expensive it is to turn into batteries, etc. Its nice that Elon has his own manufacturing, but the cost savings compared to outsourcing are probably going to be trivial.
Unless he can get prices down to a 1/10th of what it costs today, he won't ever be competitive outside of the luxury market. Lets start calling a turkey a turkey here. EV's as the affordable family car is just not going to happen. When do the taxpayers say enough is enough? I think its time. Lets let Elon use his PERSONAL billions to run this turkey. If he did, we both know he'd shut down in a second.
The "scales of industry" argument is fairly bunk considering their previous source was Panasonic, who knows full well how to make cheap lithium-ion. There's only so much we can do to cheapen them. We're probably very close to the minium manufacture cost. Cutting out the middle-man will save Elon, what, 5% maybe, 10% if everything goes perfectly? He needs a minimum of 60-80% to compete with ICE.
Heck, the "gigafactory" is just a legal shell for panasonic to come in with their engineers and their patents and their processes under Elon's US company. Elon is just putting on his top hat and monocole and playing landlord, he is not engineering these batteries:
http://www.teslamotors.com/en_AU/blog/panasonic-and-tesla-si...
"According to the agreement, Tesla will prepare, provide and manage the land, buildings and utilities. Panasonic will manufacture and supply cylindrical lithium-ion cells and invest in the associated equipment, machinery, and other manufacturing tools based on their mutual approval."
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tldr; Lithium-ion just isnt cost competitive (and has major wear issues). ICE is winning for a reason. We need something better to defeat ICE.
edit: downvotes with zero cites, zero cost arguments against my thesis but wishful thinking? Stay classy HN.