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Krugerrand
Meow
It's like the Children's Wish List around here lately with the voting requests.
This is priceless. I love it when you take such a precise stand on things. No abstract time tables, no goal post moving. Just very precise predictions. Another batting 1.000 for the other team. You know, it'll rain in Aswan sooner or later too.
Krugerrand
Meow
What if a company named Faraday Future comes into existence and declares they'll build an EV factory in Nevada?
What if another company named Lucid comes into existence and declares they'll build an EV factory as soon as they get funding?
What if Audi declares they'll make the E-Tron whatever on six separate occasions?
Playing the game what if is mostly a waste of time. It only matters what 'is'.
I know, off topic -- but did you mean that dam place? In Egypt? You may be right.It's like the Children's Wish List around here lately with the voting requests.
This is priceless. I love it when you take such a precise stand on things. No abstract time tables, no goal post moving. Just very precise predictions. Another batting 1.000 for the other team. You know, it'll rain in Aswan sooner or later too.
Krugerrand
Meow
I do want to address this point because I see it pop up elsewhere and we really haven't discussed it here. And there are some interesting developments.
To lay some groundwork, here is the original Gigafactory PDF presentation given by Tesla, created February 2014:
https://www.tesla.com/sites/default/files/blog_attachments/gigafactory.pdf
Here are the relevant specs:
1) 2020 cell output of 35 GWh/year
2) 2020 pack output of 50 GWh/year
3) 10 million square feet on 1-2 levels
4) ~500,000 vehicles/year. In subsequent discussions, roughly 35 GWh was for automotive, 15 GWh for stationary storage.
5) Tesla + partners will invest $4-5 billion, Tesla would invest $2 billion
There has been considerable, and in my opinion, deliberate, misunderstanding of this information and subsequent information. It is as if people thought Tesla would be inflexible when it comes to such plans, or that altering things along the way was somehow always bad. It continues to this day.
Some (deliberate) misunderstandings have to do with the shell construction. Montana Skeptic on Seeking Alpha wrote a entire series of articles on this. They took the page 5 "facility construction" series of red arrows and assumed that the entire shell was scheduled to be built by the end of 2015. They left off the interpretation of the dark gray arrow that says, "2020 (500k Veh/Yr)". Somehow *not* having an empty shell was missing promises to them because, of course, they are desperate to throw any shade they can find. Clearly it is complete nonsense to insist that not having an empty shell for production expected years later was a problem. It is hilarious to read through some of those articles now... so much energy was spent on trying to twist and misinterpret everything related to this factory since it represents the single biggest threat to their investment world view - if Tesla has a significant advantage in making electric vehicles, that would be a big threat to them.
Now, here is the one of the biggest sources of misunderstandings with respect to the Gigafactory. We got first glimpses of it in the summer of 2015:
Tesla’s Gigafactory could be twice as big as originally planned, according to county officials
This information comes from Dean Haymore of the Storey County Commission. At the time, we didn't know the effect on the resulting output of the Gigafactory.
Of course, we all know the incredible response to the Model 3 unveiling in March, 2016 and it becomes abundantly clear that Tesla needs to move up their build plan. Note that the size of Gigafactory 1 was already bigger, but the timetable moved up significantly. Both Tesla and Panasonic move to raise money to accelerate the timetable:
Tesla Gigafactory: Panasonic is raising $3.9 billion, strategic investment ‘mostly’ for battery factory in response to Model 3 demand
It was a year later, at the 2016 Shareholder's Meeting that we find out just how much bigger Tesla is thinking: Tesla could triple the planned battery output of ‘Gigafactory 1’ to 150 GWh, says Elon Musk
The expected capacity of Gigafactory 1 is now tripled to 105 GWh of cells, 150 GWh of packs, with an eventual split of Energy versus Automotive at the pack level to be closer to even.
To this day, Bloomberg New Energy Finance still quotes the 35 GWh capacity for the Gigafactory. They either are completely incompetent or they are deliberately misleading.
It is in October, 2015, that there is finally an "inside" of the Gigafactory and a temporary certificate of occupancy is granted. It is roughly in this time period that Panasonic can actually start their onsite investment. A few months later, Panasonic commits $1.6 billion for the Gigafactory in January, 2016:
Panasonic Commits $1.6 Billion For Tesla Battery Gigafactory
That is important because that likely funds the entire original 35 GWh of cell production capacity, since Panasonic is responsible for the cell production tooling. It is also interesting to note that they essentially fund this capacity well ahead of the original schedule. The original plan was for 35 GWh of cell production capacity in 2020 and therefore committing this level of money in early 2016 was quite notable.
Now we know that each section of the Gigafactory has up to 4 floors, not 2, and the output is tripled overall. We also visited the Gigafactory before the clean rooms had to become clean:
This one is one of the best videos and as an investor, bull or bear, you really have to go through all of it. Unfortunately, each tour was slightly different as the tour guides and presenters were sometimes more chatty or more tired and there were many, many individual groups through through that afternoon and night. One of the key takeaways from the Gigafactory tour is their reduction in cathode oven energy requirements of 80% which is also one of the highest energy requirements of a cell production facility. This goes to reducing cell production costs directly.
Gigafactory cell production begins in January, 2017:
Battery Cell Production Begins at the Gigafactory
They hold an investor event at the Gigafactory that day and there's plenty of additional material presented then. They also post this handout:
http://files.shareholder.com/downlo..._Gigafactory1_Tour_Jan_2016_Handout_FINAL.pdf
Transcript of the meeting is available at:
Transcript of the Gigafactory Q&A - Great stuff on GF1 • r/teslamotors
Shout out to overview for kiwi2016 for doing this.
Presumably they've been making cells for some time, but the actual start of production for product is announced at this time. We presume also from the tour that a single cathode oven is operational out of 2 at the pilot facility. And they are installing the rest of what is needed for Model 3 production. Looking at the Jan 4th handout, we get a few tidbits:
1) 2nd phase of expansion supports annualized production to 35 GWh of cells, 50 GWh of packs.
2) lowest capital cost per GWh of capacity
3) lowest production cost per kWh
4) 80% reduction in fresh water usage.
Remember, they work with the largest automotive LIB manufacturer on the planet... Panasonic. They know if this is true or not.
So at this point, Section A assembles cells into packs using both Gigafactory and outside cells, sections B and C produce cells, and D, E, D' and E' are to support cell and pack assembly for 35/50 GWh, and F is for automotive subassembly (Model 3 drive units).
That leads us up to this, from the most recent 10-K:
and
So... with Sections D, E, D' and E' looking like they are ready for an "inside" then Tesla is almost done with the capital expenditures necessary to achieve the original 35 GWh of cell production. It is Panasonic that needs to spend the rest of the $1.6 billion and other partners for the cell production and Tesla does needs to spend money on the pack production that point. So Tesla has spent $1.98 billion already... but that also includes Section F, which wasn't in the original plans.
Given about 9 months of installation and commissioning, I am now expecting that Tesla is looking for 35 GWh of cell production in mid 2018, not end of 2018.
The entire 2020 plan which includes 35 GWh of cell output and $2 billion invested now looks 2 to 2.5 years early and with only 30% of the building footprint built out. Again, 100% of the cell production capacity but with 30% of the building footprint and that includes a section doing something that was not part of the original plans.
Now, it is reasonable to extrapolate that the 5k/week build plan for the Model 3 has to be satisfied by the pilot phase (Sections A, B, and C). That means roughly 16-17 GWh of cell output is required out of the pilot phase. If Tesla is sourcing Samsung cells for a project in Q3/Q4, that means they are looking to achieve that output earlier rather than later.
Also... the size of D, E, D', and E' is bigger than A, B, and C. That's notable. We don't know what that means yet, but I suspect 35 GWh cell output is not the actual expected end capacity and the expected output is closer to 40 GWh.
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Why would they invest. Current glut in the lithium ion market is about 30% of the complete market and all 5 major players are planning to add more even more capacity short term (https://www.economist.com/news/brie...ter-chemistry-are-causing-costs-plummet-after)
Now, if we look at Tesla with 35-40 GWh of cell production in 2019, and 45 to 50 GWh of pack production, going to 105 GWh of cells and 150 GWh of pack production and compare against everyone else.
Here are two charts from recent FT articles using Benchmark Mineral Intelligence and Bloomberg New Energy Finance data.
Note how they disparage Tesla in that second chart and provide zero dots when they know there is cell production. Note that these present all automotive and stationary storage lithium ion production, which includes LiFePO4 that isn't interesting for automotive. These are 2020 and 2021 looks and we know that these factories take time to come online. I think the "commissioned" in the first part means they've started construction and put money forth. They also clearly have the LG Ochang facility at way too high of an amount... it was 3.2 GWh in 2013 but severely under-utilized at the time:
LG Chem to Crank up Its Idle Battery Productions Lines | Korea IT Times
Likely it is around 5 GWh now given cell improvements and demand from GM and Hyundai/Kia. The total "commissioned" for LG should be around 8 GWh today. Note that their own data is not quite lining up for Ochang. But oh, well, clearly BNEF is incompetent.
Anyways... likely then, commissioned for 2017:
Tesla/Panasonic: 16-7 GWh
Panasonic: 9-10 GWh
LG Chem: 8 GWh
Samsung SDI: 6 GWh
SKI: <1 GWh
BYD is all LiFePO4, and unclear how much of CATL is also. Chinese incentives were only for LiFePO4 and not NMC, but that recently changed so I expect the production mix to also change.
Here are two charts from recent FT articles using Benchmark Mineral Intelligence and Bloomberg New Energy Finance data.
Note how they disparage Tesla in that second chart and provide zero dots when they know there is cell production. Note that these present all automotive and stationary storage lithium ion production, which includes LiFePO4 that isn't interesting for automotive. These are 2020 and 2021 looks and we know that these factories take time to come online. I think the "commissioned" in the first part means they've started construction and put money forth. They also clearly have the LG Ochang facility at way too high of an amount... it was 3.2 GWh in 2013 but severely under-utilized at the time:
LG Chem to Crank up Its Idle Battery Productions Lines | Korea IT Times
Likely it is around 5 GWh now given cell improvements and demand from GM and Hyundai/Kia. The total "commissioned" for LG should be around 8 GWh today. Note that their own data is not quite lining up for Ochang. But oh, well, clearly BNEF is incompetent.
Anyways... likely then, commissioned for 2017:
Tesla/Panasonic: 16-7 GWh
Panasonic: 9-10 GWh
LG Chem: 8 GWh
Samsung SDI: 6 GWh
SKI: <1 GWh
BYD is all LiFePO4, and unclear how much of CATL is also. Chinese incentives were only for LiFePO4 and not NMC, but that recently changed so I expect the production mix to also change.
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Tesla 2017 capacity in terms of marketshare of advanced LIBs (NMC, NCA, not LiFePO4): ~60%
In 2018: ~75%
In 2019: unknown... but likely still about 70%... and unknown because we don't know Tesla's plans for expansion, but we do know everyone else's because they told us.
Tesla's ability to sell each and every cell they make is very, very high. The other cell makers... well, that's a real gamble.
As we approach 2019/2020, we can see just how much advanced LIB production is available for all these new EVs coming out. Remember, they are still going to be building a lot of ridiculous PHEVs that soak up considerable lithium ion battery production for very little gain.
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Reciprocity
Active Member
Interesting tidbit from the article:
Lithium-ion cells (the basic components of batteries) cost over $1,000 a kilowatt-hour (kWh) in 2010; last year they were in the $130-200 range. GM says it is paying $145 per kWh to LG Chem for the cells that make up the 60kWh battery for the Bolt (the pack, thanks to labour, materials and electronics, costs more than the sum of its cells). Tesla says that cells for the Model 3 are cheaper.
MitchJi
Trying to learn kindness, patience & forgiveness
Only Tesla has the ability to build inexpensive packs using 2170 (small cylindrical) cells.
Why do you think that? I thought Lucid and someone else, Fisker?, were using 2170 format cells as well.
One using Samsung and the other using LG cells.
Samsung unveils its own ‘2170’ battery cell to compete with Tesla/Panasonic and new battery enabling 370-mile EV range & 20 mins charging
Lucid Motors and Samsung claims ‘breakthrough’ battery cell to power upcoming all-electric sedan
Fisker EMotion UltraPack To Use 21700 Cells From LG Chem
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MitchJi
Trying to learn kindness, patience & forgiveness
Why do you believe that only Tesla uses NCA Cells?
Btw what is probably unique is the exact formulation of NCA.
MitchJi
Trying to learn kindness, patience & forgiveness
You can be absolutely sure that the Tesla BMS is not restricted to use on a single type of cell, either chemistry or format.
BMS's control the minimum and maximum voltage, the power output, the temperature, and the state of charge (depends on the cell and pack capacity). The capacity depends on the number of cells in series (pack voltage) and the AH (number of cells in parallel).
It would be a foolish decision to design a BMS without the flexibility to be able to accommodate different values for each of those variables.
MitchJi
Trying to learn kindness, patience & forgiveness
Maybe Lucid could figure out how to do that. But most oem's believe that it's the wrong approach. They are all using large format prismatic cells. At the Gigafactory I think that the cell manufacturing area is restricted to Panasonic employees and the pack production area is restricted to Tesla employees. I believe that the reason that Panasonic can't sell storage at the same prices as Tesla is because it costs them more to produce packs.
MitchJi
Trying to learn kindness, patience & forgiveness
MitchJi
Trying to learn kindness, patience & forgiveness
You mean it isn't a Potemkin Village
?! That is really shocking.I believe that the initial doubling that was conveyed by Storey County was the footprint of the entire building, and that the tripling capacity that Elon mentioned, after a confirmation from JB on the call is due to the alien dreadnaught optimizations. I believe that they still have not engaged in the doubling of the footprint that they the building permit guy mentioned.
Thanks for your capacity estimates. Great information!
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