First Principles

Ask yourself, what am I sure is true?” … and then reason up from there.

Elon Musk described this as follows:

Somebody could say, “Battery packs are costly, and that’s just the way they will always be… Historically, it has cost $600 per kilowatt-hour. It’s not going to be much better than that in the future.”

With the first principles, you say, “What are the material constituents of the batteries? What is the stock market value of the material constituents?”

It’s got cobalt, nickel, aluminium, carbon, some polymers for separation, and a sealed can.

Break that down on a material basis and say, “If we bought that on the London Metal Exchange, what would each of those things cost?”

It’s like $80 per kilowatt hour. So clearly, you just need to think of clever ways to take those materials and combine them into the shape of a battery cell, and you can have batteries that are much, much cheaper than anyone realises."