Cost of batteries and not the pack. Thanks for clarifying, Elon.
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3Victoria
Active Member
From Fortune blog, edited transcript:
"Musk: What you’re seeing is only 14% of the size of the factory overall. It’s quite huge. One of the things we discovered as we got more into the Gigafactory design and optimizing what it could do, we thought we could probably achieve about three times the output that was originally planned. So we originally expected to make about 35 gigawatt hours at the cell level and about 50 gigawatt hours at the module or pack level. Now we are expecting to do about 150 gigawatt hours in the same volumetric space as the original design.
Things are on track to be able to meet the Model 3 plan next year. We’re really excited about what’s happening here.
Straubel: One of the points is the schedule and ramp up plan for the Gigafactory. With the pull up of the Model 3, and the volume goal to meet a half million cars by 2018, we also have had to pull up the Gigafactory schedule to supply the cells and battery packs for the Model 3. What that means is for the earlier schedule for the Gigafactory, we’ve had to pull that ahead by two years. By 2018 we have to be at 35 gigawatt hours of production to support those Model 3s.
You can see the evidence of that around the factory. And Panasonic has done their part to absolutely stay in sync with that as we’ve accelerated the schedule for Model 3.
Yoshihiko Yamada, Panasonic’s executive vice president: I want to explain to you the relationship with Tesla and Panasonic. I used to be in charge of components five or six years ago. At that time our relationship with Tesla was one of supplier and customer. A conventional business relationship.
But since we started discussion on the Gigafactory that’s completely changed. One example, is production capacity is now two or three times more. Why? Because Tesla and manufacturing people worked together. We are discussing these details. This type of relationship is quite new for business. We are not the simple buyer and supplier relationship."
"Musk: What you’re seeing is only 14% of the size of the factory overall. It’s quite huge. One of the things we discovered as we got more into the Gigafactory design and optimizing what it could do, we thought we could probably achieve about three times the output that was originally planned. So we originally expected to make about 35 gigawatt hours at the cell level and about 50 gigawatt hours at the module or pack level. Now we are expecting to do about 150 gigawatt hours in the same volumetric space as the original design.
Things are on track to be able to meet the Model 3 plan next year. We’re really excited about what’s happening here.
Straubel: One of the points is the schedule and ramp up plan for the Gigafactory. With the pull up of the Model 3, and the volume goal to meet a half million cars by 2018, we also have had to pull up the Gigafactory schedule to supply the cells and battery packs for the Model 3. What that means is for the earlier schedule for the Gigafactory, we’ve had to pull that ahead by two years. By 2018 we have to be at 35 gigawatt hours of production to support those Model 3s.
You can see the evidence of that around the factory. And Panasonic has done their part to absolutely stay in sync with that as we’ve accelerated the schedule for Model 3.
Yoshihiko Yamada, Panasonic’s executive vice president: I want to explain to you the relationship with Tesla and Panasonic. I used to be in charge of components five or six years ago. At that time our relationship with Tesla was one of supplier and customer. A conventional business relationship.
But since we started discussion on the Gigafactory that’s completely changed. One example, is production capacity is now two or three times more. Why? Because Tesla and manufacturing people worked together. We are discussing these details. This type of relationship is quite new for business. We are not the simple buyer and supplier relationship."
Tesla may require a “modest” capital raise, but the Model 3 -- which was “fully engineered” as of a few weeks ago -- could generate the company $20 billion in revenue a year once reaching full production, he said.
Elon Musk Sees His Tesla Master Plan Costing Tens of Billions
A 1,500-word manifesto that Elon Musk unveiled last week, outlining his plan to expand Tesla Motors Inc.’s electric-vehicle line and to build “stunning solar roofs,” may end up costing the company tens of billions of dollars to carry out.
Musk, Tesla’s chairman and chief executive officer, gave the estimate on Tuesday after a tour of the company’s battery factory under construction in Nevada. He quickly added that he doesn’t plan on spending the billions right away.
“Over time, this must necessarily be true,” he said. “Don’t quote me saying I plan to spend tens of billions right now because that would be incorrect.”
Elon Musk Sees His Tesla Master Plan Costing Tens of Billions
A 1,500-word manifesto that Elon Musk unveiled last week, outlining his plan to expand Tesla Motors Inc.’s electric-vehicle line and to build “stunning solar roofs,” may end up costing the company tens of billions of dollars to carry out.
Musk, Tesla’s chairman and chief executive officer, gave the estimate on Tuesday after a tour of the company’s battery factory under construction in Nevada. He quickly added that he doesn’t plan on spending the billions right away.
“Over time, this must necessarily be true,” he said. “Don’t quote me saying I plan to spend tens of billions right now because that would be incorrect.”
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3Victoria
Active Member
From Fortune blog:
"Musk’s response to how Tesla is going to pay for its master plan: “One part of that is working with strategic partners like Panasonic. We are seeing very good participation from our supplier for the capital costs of the Model 3 ramp. So we are going to fund it by Model S and Model X revenue, with money we have right now, with potentially a modest capital raise, but not a significant one. In a nutshell, there may be a capital raise, but it’s not going to be a huge one.”
Musk on his confidence in meeting the new accelerated 2018 goal: “I believe we are on track to meet the half million by 2018. The hardest thing to predict is really the ramp. The ramp looks like an S curve and grows exponentially. Initially the ramp looks really tiny and as you eliminate bottle necks you climb the ramp and you level off. Its always difficult for us to forecast the exact shape of the S curve for the production ramp.
It’s much easier for us to forecast when things are going to be steady state. So we’ve been pretty good about forecasting 2018, whereas 2017 is much more in the air because we’ll be working through a complex production ramp.”
Musk on the Powerwall and Powerpack business: Stationary storage will be as big as the car business long term. The growth rate will probably be several times what it is for the car business.
We roughly assume that it’ll be probably a third of our output. But the growth rate is faster, so then grow to probably match what it is for cars."
"Musk’s response to how Tesla is going to pay for its master plan: “One part of that is working with strategic partners like Panasonic. We are seeing very good participation from our supplier for the capital costs of the Model 3 ramp. So we are going to fund it by Model S and Model X revenue, with money we have right now, with potentially a modest capital raise, but not a significant one. In a nutshell, there may be a capital raise, but it’s not going to be a huge one.”
Musk on his confidence in meeting the new accelerated 2018 goal: “I believe we are on track to meet the half million by 2018. The hardest thing to predict is really the ramp. The ramp looks like an S curve and grows exponentially. Initially the ramp looks really tiny and as you eliminate bottle necks you climb the ramp and you level off. Its always difficult for us to forecast the exact shape of the S curve for the production ramp.
It’s much easier for us to forecast when things are going to be steady state. So we’ve been pretty good about forecasting 2018, whereas 2017 is much more in the air because we’ll be working through a complex production ramp.”
Musk on the Powerwall and Powerpack business: Stationary storage will be as big as the car business long term. The growth rate will probably be several times what it is for the car business.
We roughly assume that it’ll be probably a third of our output. But the growth rate is faster, so then grow to probably match what it is for cars."
I'm still a bit confused if the capital raise is need for model-3 or for masterplan-2.
From the fortune blog quote above it appears to be for model-3.
This is somewhat disappointing as we all thought that Tesla was done with capital raises. Ron Baron said so too.
From the fortune blog quote above it appears to be for model-3.
This is somewhat disappointing as we all thought that Tesla was done with capital raises. Ron Baron said so too.
Musk’s response to if Tesla will get into grid services: I think we’ll get into grid services eventually. The goal of Tesla is to accelerate sustainable energy, so we’re going to take a step back and think about what’s most likely to achieve that goal.
- Looks like PowerPacks are no longer in the near term roadmap. As many have noted here they weren't mentioned in masterplan-2 either.
- Looks like PowerPacks are no longer in the near term roadmap. As many have noted here they weren't mentioned in masterplan-2 either.
This is the problem with short term investing with TSLA - Great day on Monday. We expected a great day today with GF news starting. Instead we get completely blindsided by Mobile Eye news. It didn't hurt TSLA as much as Mobile Eye, but it definitely didn't help. Then we get GF news, and Elon opens his mouth and mentions tens of millions need to be spent. The fact that more capital would be needed to expand was obvious to all of us, but now there are more quotes for the FUDsters to play with. SP rise will be muted tomorrow compared to what it would have been without that comment. Thanks Elon. Can't wait for all the negative articles tonight and tomorrow.... 
This is the problem with short term investing with TSLA - Great day on Monday. We expected a great day today with GF news starting. Instead we get completely blindsided by Mobile Eye news. It didn't hurt TSLA as much as Mobile Eye, but it definitely didn't help. Then we get GF news, and Elon opens his mouth and mentions tens of millions need to be spent. The fact that more capital would be needed to expand was obvious to all of us, but now there are more quotes for the FUDsters to play with. SP rise will be muted tomorrow compared to what it would have been without that comment. Thanks Elon. Can't wait for all the negative articles tonight and tomorrow....
As I understand the news is:
Tens of Billions are needed for masterplan-2, which may get funded by model-S,X,3 and TE revenues. There was no indication that 10s of billions will actually need to be raised from capital markets (in any time frame).
There will need to be a "modest" capital raise for model-3.
The second bit is somewhat unexpected. I believe no TSLA follower expected that.
Exactly. But the FUDsters will report that MP2 will require tens of Billions in outside capital, since, you know, they lose money on every car they sell...
Batteries != packs. There has been some discussion whether $100/kWh includes pack or just cells.
racer26
Active Member
Yeah. SMP2 didn't need any further touching as to how its getting paid for, because its bloody obvious to anyone with a brain that the majority of the funding will come from Model 3's rampant success. It shouldn't be surprising that SMP2 will require tens of billions to execute, Tesla plays in capital intensive arenas, but that shouldn't be scary either, as SMP2 tackles some of the largest industries that exist, and if it is successful in disrupting them, Elon's not that far off-base to suggest that Tesla could be a trillion dollar company.
The reservations are just the tip of the iceberg. Once Model 3's get into customer hands and people start showing their friends, it will be a while before Tesla can keep up. 400k people were willing to put up money 18 months in advance; how many more would buy it if they could test drive it or see one in the flesh first?
The reservations are just the tip of the iceberg. Once Model 3's get into customer hands and people start showing their friends, it will be a while before Tesla can keep up. 400k people were willing to put up money 18 months in advance; how many more would buy it if they could test drive it or see one in the flesh first?
Mike Smith
Active Member
Musk’s response to how Tesla is going to pay for its master plan: “One part of that is working with strategic partners like Panasonic. We are seeing very good participation from our supplier for the capital costs of the Model 3 ramp. So we are going to fund it by Model S and Model X revenue, with money we have right now, with potentially a modest capital raise, but not a significant one. In a nutshell, there may be a capital raise, but it’s not going to be a huge one.”
It sounds to me like he is saying the master plan may require a modest capital raise, not specifically the model 3. This makes more logical sense as well. Telsa has a certain amount of money, and they are spending it on multiple projects. They wouldn't raise more money for a specific project like the model 3, they'd raise money because they're running out of money overall.
It sounds to me like he is saying the master plan may require a modest capital raise, not specifically the model 3. This makes more logical sense as well. Telsa has a certain amount of money, and they are spending it on multiple projects. They wouldn't raise more money for a specific project like the model 3, they'd raise money because they're running out of money overall.
anticitizen13.7
Not posting at TMC after 9/17/2018
Exactly. But the FUDsters will report that MP2 will require tens of Billions in outside capital, since, you know, they lose money on every car they sell...
Look at it this way:
In the past few months, Tesla has been under a torrent of relentless bad press:
- Q2 delivery miss
- Autopilot related fatality, accidents, and related controversies
- Opposition and/or ridicule concerning SolarCity acquisition
- Negative reception of SMP2
So much FUD has already been thrown at TSLA that I think FUD fatigue has set in. Having a smaller additional secondary offering is fairly minor in comparison with the insanity of the past couple weeks.
All well and said, however, tesla has raised money after every time denying the need for it. I think they will have to raise before M3 production goes in full swing.
MitchJi
Trying to learn kindness, patience & forgiveness
Cells != packs. Some discussion, but your first post stated clarification by Elon.
I've never heard Elon or JB refer to cell costs when talking about battery costs. So I don't think you are correct, but if Elon actually clarified that then I'm wrong.
I wonder if this maybe relevant for Tesla, given their separation from Mobileye.
Panasonic shifts from home electronics to cars
Panasonic making batteries, and possible partner for ADAS technology? In house at the GigaFactory?
Obviously I have no insight into the quality of Panasonic ADAS products.
Panasonic shifts from home electronics to cars
Panasonic making batteries, and possible partner for ADAS technology? In house at the GigaFactory?
Obviously I have no insight into the quality of Panasonic ADAS products.
PowerPacks seem 100% essential to both near and far-term Tesla Energy. That's over 90% of TE's business, right?
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