[cschwarm]

In my opinion, something like the Gigafactory only makes sense in the context of (expected) innovations.

The usual way to lower costs is to specialize, and to have a diverse network of suppliers. The Gigafactory is meant to do everything under one roof, so it's the opposite of specialization (and low costs).

The advantage of something like a Gigafactory, however, is the ability to coordinate actions in-house. Transactions costs are lower, and Tesla is able to "upload" innovations rather fast (compared to a diverse specialized network of companies).