2 mins Read 
07/05/2025 Our Chief Commercial Officer, Alex Stapleton, recently joined Jason Lomberg on the Power Systems Design Podcast to discuss whether gigafactories are the right choice for OEMs or would other options provide a better fit for an OEM.
Since the term was coined in 2013 by Elon Musk, gigafactories have emerged as the go-to option for manufacturers looking to produce their electric vehicle and energy storage system batteries at scale. These OEMs benefit from the advantages gigafactories provide, such as vertical integration and economies of scale, which can drive down the unit cost of each battery. However, despite these advantages, a gigafactory isn’t always the right fit for an OEM.
“Gigafactories are a gamble; some never even reach production, and when OEMs bet on the wrong one, the consequences can be costly…” Alex Stapleton.
Throughout the podcast, Alex highlights strong alternatives for OEMs, noting that many gigafactories are unable to provide the flexibility that OEMs crave, acting as just a supplier rather than a strategic partner. As he puts it, “Gigafactories are built for standardised and high-volume cell output,” making them less suited to projects that demand customisation and agility. Alex highlights that starting your project run at a gigafactory is often “capital-intensive” due to gigafactories demanding higher quantities of their customers’ batteries to be made. These demands will often come with a high minimum order quantity, which can hurt a manufacturer in the short term.
In contrast, a specialised battery manufacturer provides an advantage for customers who want a custom battery pack for their application. This gives OEMs control over their project by providing input into the design of the pack and the materials used, resulting in a pack that meets their specific power, durability, and safety requirements. Specialist battery manufacturers can also offer scalability opportunities in quantities that wouldn’t be a good fit for a gigafactory. This approach suits OEMs looking for pieces in the tens of thousands rather than the hundreds of thousands that would typically fill gigafactories.
This podcast is a must-listen for OEMs considering their manufacturing strategy. Discover what choices are available for your next battery manufacturing projects.
