I apologize for any mistakees, typo's etc. If I had known how long this was going to take me to do write this... Battery Pack and Gigafactory Gigafactory - Production Cars and Storage Growth Gigafactory - Car Pack Costs The following is clearly less important than using custom equipment and vertical integration for achieving their 30%-50% cost reduction estimates: Summarizing they said that the use of custom large scale manufacturing equipment and secondarily colocation (aka vertical integration) are the main reasons for the GF cost reductions. This scale of this equipment is so large, that each instance of anode and cathode electrode assembly is big enough to produce a significant percentage of the worlds current battery production. Designing and building this custom large scale equipment only makes sense because of the massive scale of the GF, and also partially because they need to build more than one of these production lines. So they will setup some kind of production system to reduce the cost and the time required for of producing the succeeding cell production lines. In other words the major product is not GF1, it’s GF Production Line 1 (GFPL1). This has huge implications for the flexibility of setting up smaller factories, or setting up factories in phases to obtain most of the cost benefits of a larger factory. That means, now that it's completed and working satisfactorally, they will be able to produce succeeding production lines at a substantially lower cost and more quickly than they produced the first one. These lines can be installed anywhere that Tesla needs a multiple of one or more of these lines. I believe that it will be possible for Panasonic to produce 2170 cells in Japan, at a similar cost to the cells produced at the GF by doing two things: 1. Using one or more units of the large scale manufacturing equipment they developed for use at the GF. 2. Vertically integrating that factory. Obviously converting their existing 18650 line to produce 2170's is relatively trivial. But getting the price down requires much more than that. It probably makes more sense to shift MS-MS 2170 cell production to the NV GF (to take advantage of colocation), and setup and use more efficient production lines in Asia for Asian TM and Asian TE. I think that it’s pretty clear the idea to use customized equipment and to use vertical integration were Elon-Tesla’s ideas, and that Panasonic’s hesitancy to invest ended when they were convinced that a 30% cost reduction was a conservative number. So it's more complicated than just scaling production. *Elon-Tesla figured this out using first principles. If it seems obvious why didn't Panasonic figure this out without having to be convinced by Tesla? Tesla is now claiming 35% battery cost reduction at ‘Gigafactory 1’ – hinting at breakthrough cost below $125/kWh The tripling of capacity (aka alien dreadnaught production), which were also due to **Elon-Tesla innovations will also have an important impact on cell and pack costs. Because they will get 3x the production for the same fixed costs. Tesla originally said that they conservatively expected cost reductions of 30% by 2017 (beating their projections on price), and 50% by 2020. I believe that the additional 20% by 2020 projection came largely from the fact that they were planning on the cost reductions from producing multiple units of the large scale cell manufacturing equipment. If that's correct (what else could it possibly be?) their costs will be even less when they hit 35 GWh of cell production in the current GF, because when they hit 35 GWh production they will have achieved all of the cost reductions originally planned for the 35 GWh goal, but have only incurred about a third of the building costs. So I believe that when the GF production hits 35 GWh (2018 or 2019) Tesla's car pack costs will be less than half of $190 per kWh (~50%-55%) or under $95 per kWh. Probably under $85 per kWh. I'm sure some of you are thinking that 50% reduction in costs is crazy, but the second generation TE products have about a 50% reduction in price and they include the invertors! I've already pointed out two things which are major advantages for Tesla which were due to Elon Musk. I don't understand the criticism he receives on this forum. IMO he should be regarded in a similar fashion as Lebron James is regarded by the Cleveland fans. IMO he is clearly Tesla's main moat. What I believe would be quite exciting is not a cap raise that involves either selling stock or a loan tied to a stock hedge. What's exciting about those options, other than the prospect of a SCTY type dip (two or three more GF's before the first one is complete). I think that they will do something like one of the suggestions here: Suggestion for Tesla to accelerate their trajectory for reducing carbon emissions Model 3 Production The "A team at the A supplier" means that Tesla's business is important to the suppliers. I believe this is a major reason that both the Letters, and Elon sound more confident about starting production in July. Model 3 Production Line and CapEx 1. Tesla is modeling the line to get to 10k per month, but they are saying that the chances of being able actually dial up to that speed are initially are low. It will be really interesting to see the rate they get from doing that. 2. The concerns that Elon was crazy to suggest the possibility of 100k to 200k by the end of 2017 are exaggerated. 3. They are not building one line and then replacing the entire line. Model 3 Cash Flow and CapEx Final version. I think that has nothing to do with the part 3 (probably HUD or something else that is also on the MS-MX) reveal. They are obviously trying to do everything that they can to not cannibalize MS-MX sales. "Model 3 won't have self presenting door handles" (who cares!). Elon Musk Down-Sells Model 3 On Twitter In Favor Of Model S But that's a little hard to do since Elon is committed to making compelling cars. I believe that the reasons that they are going to delay the full reveal and the opening of the Design Studio as long as they can because the Model 3 will be compelling, especially the prices. For example Elon tweeted that pack upgrades will cost less on the M3. I also believe that they are planning to make some upgrades to the MS-MX, and reduce the prices of some of the options at the same time. They are in an awkward position until they start making profits on the M3. No Planned Obsolescence - Ludicrous Mode is a SW upgrade Three Dog Day These is no planned obsolescence designed into the driveline, unless you consider a million mile design life planned obsolescence . The million mile driveline, built into every Tesla, is the hardware required for Ludicrous Mode. In other words Elon just confirmed my belief that Ludicrous Mode is a software upgrade.