What E-Cat Production, Investment Levels Would be Needed to be Insurmountable (Private Citizen)

The following comment was posted by Private Citizen in this thread

Assuming Rossi’s strategy is to produce so many units at so low a cost that no rival can gain market share, let’s ask:

1. How many units would constitute an insurmountable initial production?

2. What is the cost per unit to produce, including capitalizing the factories?

If Rossi produces 1,000,000 units at $1,000 ea he will need $1 billion in investment capital. Where is he getting $1 billion?

If he produces only 1,000 units, that is probably not an insurmountable market penetration.

Perhaps there is a sweet spot somewhere between, but the lower his production, the lower his chance of cornering the market and the higher the per-unit cost to manufacture. Will 10,000 units corner the market? 100,000? Lo ok how much Elon Musk is putting into battery development ($5 billion): that is a commitment to market share.

There, gang, is some metaphysical and quantitative speculation re numerous speculative angels dancing on the head of a speculative pin.

Private Citizen

  • wizkid

    The cost per item shold be less than $200 each to build. 200 million dollars, Plus cost of the assembly line, which is out sourced anyway.

    • Omega Z

      wizkid
      Product cost is much more then the average person realizes.
      For a large concern producing energy products,

      A Legal department with additional lawyers of various expertise on retainer,
      Departments such as Human resources, payroll, accounts receivable, Product sales, Materials purchasing, Technical/product support All with Management personnel & many secretaries. It’s not unusual to find business with several hundred employees to have a 1st aid department with a full time RN on staff.

      Likely a product development department with continuous R&D. LENR would require both physicist & chemical engineers & engineers of various other fields.

      Multiple buildings, a large assortment of equipment, vehicles. Janitorial staff, maintenance personnel, technicians, installation/setup teams There will be licensing, certification & safety study costs.

      Insurance: For the business & vehicles, for employees while at work or traveling on business, Product liability, Unemployment insurance, About $10K per Employee health plan & Property tax that can easily run in the Million$. And like everyone else, Utility costs. There will also be substantial transportation cost. Not just product shipment but for all employee related travel.

      Aside from those employees that work production, All of the above costs huge sums of money & are required to manufacture product, yet produces no income itself. And I’m positive I’ve left much out.

      Note that once the product leaves the plant, If this is a consumer product going to a big box store, Most of the above costs applies to them also. Thus each $1 costs $2 to the consumer.

      Just so You Know. When I purchase things, I complain about price like everyone else. But there are many products that while complaining, I’m also wondering how can they sell it so cheap with the above taken in consideration.

      • wizkid

        I owned and operated my own business for over thirty years. You too?

  • Bob

    I believe it is a fallacy to think that one can eliminate competition with mass production and low cost! I am not an economist, but I have worked in business for many years. As often, I look to history to compare current thinking with what might happen. I believe history shows that mass production thesis is short lived.
    .
    One of the best examples is Ford Motor Company. The original “mass production” philosophy. Henry Ford is credited with the production line and front runner of mass production. It is true that he made great market share and made lots of money. However, there was still much competition,
    during the early hay day, even from the likes of Studebaker. There were many car companies and when totaled, Ford may have been the number 1 seller, they did not sell more than the others combined.
    .
    Ford produced only one model of car, one color with very few options for a long time. Henry fought the idea of making the new Model A and additional options. Other companies were starting to offer a wide range of options and this would have left Ford far behind if they had not followed suit…..i.e. kept up with the times. This was only about 15 years after Ford made the first Model T.
    .
    No, I do not think mass production will ever hold off competition for long. Someone will either invent a more economical way of producing the product (such as Ford originally did) or others will start offering better models with more options that leaves one obsolete. (Just as Ford almost did a few years later)
    .
    I would ask fellow posters for any examples of a company that controlled the market for a product via mass production after just a few short years of introduction. I can think of none.
    There have been monopolies, but not due to mass production. Utility companies that owned power lines, or right ways certainly monopolized. Trains at one time did, but again because of physical limitations. Even Apple could not monopolize due to mass production. They had to invent proprietary attachments, code and marketing schemes. They relied upon patents and lawsuits much more than production volume.
    .
    I am afraid Rossi is mistaken that mass production will fend off competition but for only a very short while. I would be interested any successful examples.

    • Brent Buckner

      YKK has done pretty well on a mass production based competition strategy. “Controlled the market” would be an overstatement – but “shared in oligopoly” may not be.

    • Albert D. Kallal

      The key concept is “how long” of a time does one enjoy the market advantage when being that “first mover”. In technology, it often not who is the best, but who gets there first. See my other comments about Apple etc. So no this first mover advantage never exists forever, but it can often go a long way to owning major parts of a new product segment.
      Regards,
      Albert D. Kallal
      Edmonton, Alberta, Canada

    • LookMoo

      On top of you common sense argument there is a Political level as well. Russia will never let a US or EU company dominate and price their energy markets (and thereby control the political agenda). The same goes for China.. simple never happen… not, nada, nil, zero, alldrig…. chance.

      They will release their own clones

      However, ecat technology will be a Klondyke. Just as when horse traders shifted to cars.

  • Fyodor

    I’d also add that the jump to mass commercialization will take much longer than people think. Making 1000 or 100000 of something mechanically or scientifically complex that has never been done before is a highly unpredictable exercise.

  • Omega Z

    bachcole
    If I were the U.S. government, I would mandate the sale of E-cats to Iran.
    For the simple reason that if they continued with Nuclear development there would be absolutely no question among world powers as to their intent. International relations with Iran could then go forward with that knowledge.

  • Broadside

    A realistic market price for early production E-cats requires knowing more than just what it costs to produce the devices, but also the details of performance, durability, and servicing. Based on Rossi’s comments, it seems that the first commercial offering will be to provide not E-cats but heat as a service from an assembly of them. This will help to gain essential performance data and protect the intellectual property behind the E-cat while preparing for eventual mass production and sale of stand-alone devices.

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