Why should a factory method throw an exception for an unrecognized type instead of returning null?

Returning null for an unrecognized type defers the failure to whatever code eventually tries to use the returned object, which typically surfaces as a NullPointerException somewhere far from where the actual mistake, an unsupported type string, was made. Throwing immediately, with a message that names the specific unsupported type, fails loudly and precisely at the actual point of the problem, which is dramatically easier to debug. The general principle is to fail as close to the actual bad input as possible, rather than letting a bad value propagate silently until it causes a confusing symptom somewhere else in the call stack.