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• Case | HBS Case Collection | November 2019

  Rechargeable Batteries, 2017: Gigafactory Wars in the Offing?

  John R. Wells, Benjamin Weinstock, John R. Wells and Benjamin Weinstock

  In 2017, the global market for rechargeable lithium-ion (Li-ion) batteries was 126 gigawatt-hours (GWh) valued at $37 billion, growing by $10 billion in two years. Once confined largely to consumer electronics and appliances, the rapid increase in demand was spurred by the adoption of electric cars and buses. Moreover, the falling cost of batteries was sparking interest in another potential huge market – the electrical utility sector. Batteries could be used to store electricity in periods of low demand and release it when demand was high, significantly reducing the need for peak generation capacity. However, historically, the costs of doing this had been prohibitively high.
  In response to the expected demand, several companies had announced “gigafactories,” plants that, combined, could produce many times more output than total global demand in 2017. Tesla, Inc., the electric car maker, was the first. In 2014, it announced a 35 GWh battery plant, costing $5 billion, to be built in Nevada, enough capacity to fulfil global demand in 2013. In 2017, Tesla CEO Elon Musk said he would announce an additional four gigafactory locations to supply the global market.
  Tesla was not alone in its battery ambitions. In late 2016, start-up Alevo began delivery of its new “GridBank” batteries from a 3.5 million square-foot facility in North Carolina, with the potential to scale to 60 GWh. Alevo claimed its batteries lasted four times longer and were safer than the conventional Li-ion batteries used by Tesla. Anxious not to be reliant on third parties, in 2017, several automakers had announced plans to build battery capacity, including General Motors and Daimler. Indeed, Daimler announced two plants for its Mercedes brand cars, one in Germany and one in China. New start-ups were also entering the fray, with Northvolt AB of Sweden partnering with ABB of Switzerland to build a 32 GWh facility. Ten new gigafactories were announced in the first six months of 2017, although not all were Li-ion. For instance, Toyota announced it was to invest in a new solid state technology that would reduce weight and lengthen battery life. Meanwhile, industry global leaders in China and Korea such as CATL, BYD, Samsung and LG Chem were planning their own gigafactory expansions. Whether the market would develop fast enough to absorb this supply, and which technologies would finally win, was unclear in 2017.

  Keywords: batteries; rechargeable batteries; lithium-ion; lithium-ion batteries; electric vehicle; electric vehicles; Energy Entrepreneurship; energy markets; energy storage; Battery; demand uncertainty; demand forecasting; Supply ＆ demand; supply and demand; capacity planning; Tesla; China; Technological and Scientific Innovation; technological change; technology change; technology commercialization; policy; policy change; subsidies; Power/Energy; power grid; energy policy; developing markets; alevo; Samsung; LG Chem; CATL; Northvolt; General Motors; Energy; Entrepreneurship; Technological Innovation; Policy; Demand and Consumers; Forecasting and Prediction; Supply and Industry; Emerging Markets; Factories, Labs, and Plants; Competitive Strategy;

  Citation:

  Wells, John R., and Benjamin Weinstock. "Rechargeable Batteries, 2017: Gigafactory Wars in the Offing?" Harvard Business School Case 720-371, November 2019.  View Details

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• Case | HBS Case Collection | November 2019

  Rechargeable Batteries, 2017: Gigafactory Wars in the Offing?

  John R. Wells, Benjamin Weinstock, John R. Wells and Benjamin Weinstock

  In 2017, the global market for rechargeable lithium-ion (Li-ion) batteries was 126 gigawatt-hours (GWh) valued at $37 billion, growing by $10 billion in two years. Once confined largely to consumer electronics and appliances, the rapid increase in demand was spurred by the adoption of electric cars and buses. Moreover, the falling cost of batteries was sparking interest in another potential huge market – the electrical utility sector. Batteries could be used to store electricity in periods of low demand and release it when demand was high, significantly reducing the need for peak generation capacity. However, historically, the costs of doing this had been prohibitively high.
  In response to the expected demand, several companies had announced “gigafactories,” plants that, combined, could produce many times more output than total global demand in 2017. Tesla, Inc., the electric car maker, was the first. In 2014, it announced a 35 GWh battery plant, costing $5 billion, to be built in Nevada, enough capacity to fulfil global demand in 2013. In 2017, Tesla CEO Elon Musk said he would announce an additional four gigafactory locations to supply the global market.
  Tesla was not alone in its battery ambitions. In late 2016, start-up Alevo began delivery of its new “GridBank” batteries from a 3.5 million square-foot facility in North Carolina, with the potential to scale to 60 GWh. Alevo claimed its batteries lasted four times longer and were safer than the conventional Li-ion batteries used by Tesla. Anxious not to be reliant on third parties, in 2017, several automakers had announced plans to build battery capacity, including General Motors and Daimler. Indeed, Daimler announced two plants for its Mercedes brand cars, one in Germany and one in China. New start-ups were also entering the fray, with Northvolt AB of Sweden partnering with ABB of Switzerland to build a 32 GWh facility. Ten new gigafactories were announced in the first six months of 2017, although not all were Li-ion. For instance, Toyota announced it was to invest in a new solid state technology that would reduce weight and lengthen battery life. Meanwhile, industry global leaders in China and Korea such as CATL, BYD, Samsung and LG Chem were planning their own gigafactory expansions. Whether the market would develop fast enough to absorb this supply, and which technologies would finally win, was unclear in 2017.

  Keywords: batteries; rechargeable batteries; lithium-ion; lithium-ion batteries; electric vehicle; electric vehicles; Energy Entrepreneurship; energy markets; energy storage; Battery; demand uncertainty; demand forecasting; Supply ＆ demand; supply and demand; capacity planning; Tesla; China; Technological and Scientific Innovation; technological change; technology change; technology commercialization; policy; policy change; subsidies; Power/Energy; power grid; energy policy; developing markets; alevo; Samsung; LG Chem; CATL; Northvolt; General Motors; Energy; Entrepreneurship; Technological Innovation; Policy; Demand and Consumers; Forecasting and Prediction; Supply and Industry; Emerging Markets; Factories, Labs, and Plants; Competitive Strategy;

  Citation:

  Wells, John R., and Benjamin Weinstock. "Rechargeable Batteries, 2017: Gigafactory Wars in the Offing?" Harvard Business School Case 720-371, November 2019.  View Details

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• Case | HBS Case Collection | September 2019 (Revised September 2019)

  Facebook Fake News in the Post-Truth World

  John R. Wells, Carole A. Winkler, Benjamin Weinstock, John R. Wells, Carole A. Winkler and Benjamin Weinstock

  In August 2019, Mark Zuckerberg, founder and CEO of Facebook, was surrounded by controversy. The first major storm of protest followed the surprise election of Donald Trump as President of the United States on November 8, 2016; many put the blame at the door of fake news stories served up on Facebook’s Trending News Feed. Zuckerberg dismissed these claims as “crazy,” asserting that Facebook was a technology company, not a media company. In 2017, it was revealed that a Russian intelligence team had purchased 3,000 political ads on Facebook in an attempt to influence the 2016 U.S. Presidential Election. Then, in March 2018, the public learned that Cambridge Analytica, a political consultancy, had used 87 million Facebook profiles obtained from scraping the site to affect the election. As a result, Zuckerberg was called to Congress to testify. In early 2019, Facebook announced the company was to merge its Facebook, Facebook Messenger, Instagram, and WhatsApp platforms and share data but that this data would be more secure. The claim was greeted with much skepticism. To explain the move, Zuckerberg published a blog post, changing the company’s mission from making the world more open to achieving privacy-focused communications on its platform. Meanwhile, Facebook continued to struggle with fake news while expanding its service offering. In June 2019, it announced it was to launch Libra, a new global cryptocurrency for its 2.5 billion users around the world. In early September 2019, it launched Facebook Dating, which promised “[to help] you start meaningful relationships through things you have in common, like interests, events and groups.” That same month, Facebook announced that it bought a New York–based start-up called CTRL-labs, which was working on developing a wristband that allowed people to control their electronic devices with brain signals. There was little doubt of the scale of Zuckerberg’s ambitions. But, ongoing investigations into Facebook’s privacy violations and calls to break up the company pointed to more fundamental issues.

  Keywords: Facebook; fake news; Mark Zuckerberg; Donald Trump; algorithms; social networks; partisanship; social media; app development; Instagram; WhatsApp; smartphone; Silicon Valley; office space; digital strategy; democracy; entry barriers; online platforms; controversy; Tencent; Agility; social networking; gaming; gaming industry; computer games; mobile gaming; messaging; monetization strategy; Advertising; Online Advertising; Business Ventures; Acquisition; Mergers and Acquisitions; Business Growth and Maturation; Business Headquarters; Business Organization; For-Profit Firms; Trends; Communication; Communication Technology; Forms of Communication; Interactive Communication; Interpersonal Communication; Talent and Talent Management; Crime and Corruption; Voting; Demographics; Entertainment; Games, Gaming, and Gambling; Moral Sensibility; Values and Beliefs; Initial Public Offering; Profit; Revenue; Geography; Geographic Location; Global Range; Local Range; Country; Cross-Cultural and Cross-Border Issues; Globalized Firms and Management; Globalized Markets and Industries; Governing Rules, Regulations, and Reforms; Government and Politics; International Relations; National Security; Political Elections; Business History; Recruitment; Selection and Staffing; Information Management; Information Publishing; News; Newspapers; Innovation and Management; Innovation Strategy; Technological Innovation; Knowledge Dissemination; Human Capital; Law; Leadership Development; Leadership Style; Leading Change; Business or Company Management; Crisis Management; Goals and Objectives; Growth and Development Strategy; Growth Management; Management Practices and Processes; Management Style; Management Systems; Management Teams; Managerial Roles; Marketing Channels; Social Marketing; Network Effects; Market Entry and Exit; Market Platforms; Two-Sided Platforms; Marketplace Matching; Industry Growth; Industry Structures; Monopoly; Media; Product Development; Service Delivery; Corporate Social Responsibility and Impact; Mission and Purpose; Organizational Change and Adaptation; Organizational Culture; Organizational Structure; Public Ownership; Problems and Challenges; Business and Community Relations; Business and Government Relations; Groups and Teams; Networks; Rank and Position; Opportunities; Behavior; Emotions; Identity; Power and Influence; Prejudice and Bias; Reputation; Social and Collaborative Networks; Status and Position; Trust; Society; Civil Society or Community; Culture; Public Opinion; Social Issues; Societal Protocols; Strategy; Adaptation; Business Strategy; Commercialization; Competition; Competitive Advantage; Competitive Strategy; Corporate Strategy; Customization and Personalization; Diversification; Expansion; Horizontal Integration; Segmentation; Information Technology; Internet; Mobile Technology; Online Technology; Software; Technology Networks; Technology Platform; Web; Web Sites; Wireless Technology; Valuation; Advertising Industry; Communications Industry; Entertainment and Recreation Industry; Information Industry; Information Technology Industry; Journalism and News Industry; Media and Broadcasting Industry; Service Industry; Technology Industry; Telecommunications Industry; Video Game Industry; United States; California; Sunnyvale; Russia;

  Citation:

  Wells, John R., Carole A. Winkler, and Benjamin Weinstock. "Facebook Fake News in the Post-Truth World." Harvard Business School Case 720-373, September 2019. (Revised September 2019.)  View Details

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