Tesla Gigafactory Investor Thread

[tftf]

So, just throwing it out there. They are building a factory to double worldwide battery production and they are doing it with partners and part of this business is obviously grid storage. Doesn't it make sense for Tesla Motors to be a part owner in a new company, perhaps one called Tesla Energy? The other companies would also own part of this new company so the capital cost to Tesla Motors would be significantly reduced at the cost of sharing the earnings. It would sell battery packs to any car maker that wants them although only Tesla Motors would sell complete drivetrains.

A new company could make sense if there are multiple partners involved (and multiple partners were hinted at by Tesla). However, I don't see large car competitors buying batteries from TSLA (or the new company) except for maybe Daimler or Toyota as current TSLA investors. Toyota execs not warming up to pure BEVs at the moment would only have Daimler remaining as a partner and/or future customer in my opinion.

Even if would make sense financially I don't see competitors buying from TSLA on principle / for strategic reasons. Also, batteries are heavy and expensive to ship, other companies (Nissand and also re-born Saab as it starts EV production in 2014) produce batteries directly in their main sales regions: Nissan in all three key markets (NA, Europe and Japan) and Saab in China.

As others mentioned, some partners for the giga factory could be from outside the auto industry (obivously Panasonic as a likely candidate, maybe SCTY, IT companies like GOOG...)

 

[uselesslogin]

A new company could make sense if there are multiple partners involved (and multiple partners were hinted at by Tesla). However, I don't see large car competitors buying batteries from TSLA (or the new company) except for maybe Daimler or Toyota as current TSLA investors. Toyota execs not warming up to pure BEVs at the moment would only have Daimler remaining as a partner and/or future customer in my opinion.

Even if would make sense financially I don't see competitors buying from TSLA on principle / for strategic reasons. Also, batteries are heavy and expensive to ship, other companies (Nissand and also re-born Saab as it starts EV production in 2014) produce batteries directly in their main sales regions: Nissan in all three key markets (NA, Europe and Japan) and Saab in China.

As others mentioned, some partners for the giga factory could be from outside the auto industry (obivously Panasonic as a likely candidate, maybe SCTY, IT companies like GOOG...)

Yeah, sorry, I agree with you completely for this decade. I was thinking though by the time the current manufacturers see they have to switch to electric 10 years from now they will likely come to New Co as a possible battery supplier for true volume production. I think at that point it could make sense strategically if the idea is to get electric cars to market as fast as possible. I don't think the ICE manufacturers are going to be serious about the switch until they see it hurt their bottom line. Also, by that time they will have at least one factory on every continent.

 

[Johan]

From Q42013 report: "This will also allow us to address the solar power industry’s need for a massive volume of stationary battery packs."
My quick and dirty analysis: "This will allow us..." Us as in Tesla. Meaning in the future Tesla will not be a car manufacturer but at battery manufacturer with among other things a car division???

 

[tigerade]

From Q42013 report: "This will also allow us to address the solar power industry’s need for a massive volume of stationary battery packs."
My quick and dirty analysis: "This will allow us..." Us as in Tesla. Meaning in the future Tesla will not be a car manufacturer but at battery manufacturer with among other things a car division???

That is my impression. It sounds like they are going to do what they currently do for SolarCity... make battery packs for solar system. However this suggests to me that they will do it in a much higher volume once the Gigafactory comes online. If this is true, I consider it very good news. Solving the energy storage problem will be very helpful for solar energy.

 

[Citizen-T]

Sounds to me like SolarCity is definitely a partner.

 

[austinEV]

Not to be a spoilsport, but how is LiIon competitive for stationary storage? I always figured the value play was in accumulating degraded car packs that have lots of life but a dissatisfying performance in a car. I always thought that the other things, even lead-acid were superior for cost when do don't care about weight or density?

 

[Johan]

Really looking forward to more info next week. Capital raise to be announced at the same time?

 

[Johann Koeber]

Really looking forward to more info next week. Capital raise to be announced at the same time?

I am sensing a Perfect Storm:

TSLA going up a lot after ER
then a week later a capital raise for the gigafactory

Tesla is growing strong

 

[AudubonB]

Remember, Austin, that Tesla never has said or really even indicated that it has any "loyalty" to Li-ion. There was, indeed, reference in the press conference about the Gigafactory being able to conduct basic research.
On the other hand, I was just comparing numbers on my 9,000 lb bank of Pb-Ca AGM batteries - these are the gold standard that are used by telecomm companies everywhere - and I think my Tesla's bank is better....

 

[JRP3]

I think long term lithium wins over any other current technology, plus the fact that solar storage demand is going to outpace the availability of used EV packs, which probably won't exist in volume until ten or more years from now.

 

[kenliles]

I think long term lithium wins over any other current technology, plus the fact that solar storage demand is going to outpace the availability of used EV packs, which probably won't exist in volume until ten or more years from now.

I agree. The Li tech has improved more than the others in proportion and although not the prime target for storage, it's volume production and recycling now (and will) prove to more than match the now minimal technical deficiencies for storage systems.
The Giga Factory will further this trend and set it in stone. And other Li based solutions (like Air) won't apply themselves well for that market. li has large/easy supply chains- and Ni/Cobalt use looks to be reducing with newer Li based technologies down the road


By the way- did anyone notice- The Fremont Factory is targeted for GenIII- doesn't look as if the Giga-Factory will include that (unless surprisingly co-located there)

 

[tftf]

The only news about the factory I saw today:

Very shortly, we will be ready to share more information about the Tesla Gigafactory. This will allow us to achieve a major reduction in the cost of our battery packs and accelerate the pace of battery innovation. Working in partnership with our suppliers, we plan to integrate precursor material, cell, module and pack production into one facility. With this facility, we feel highly confident of being able to create a compelling and affordable electric car in approximately three years. This will also allow us to address the solar power industry’s need for a massive volume of stationary battery packs.

(from the shareholder newsletter)

What I got from the CC is that they will absorb most of the cells for their own demand (?).

As for cost reduction, TSLA execs already talked about 30-40% on the European tour (I still don't know if that's on the cell or the completed battery pack level), I guess that's the "major" reduction.

 

[Krugerrand]

What I got from the CC is that they will absorb most of the the cells for their own demand (?).

Yes. And?

 

[brianstorms]

SolarCity seems pretty obvious as a partner for powering the factory with solar.

Here's a wild and crazy idea: Google invests in Tesla on the gigafactory, drops in a billion or two. Likely? Absurd? We'll know soon enough.

 

[tftf]

Yes. And?

That influences ongoing external battery demand for S and X (still coming from Panasonic Japan?) and their ability to ship cells/batteries to other customers. Since some people estimated the factory could also supply third parties.

I guess we will have to wait a few more days for that separate giga-factory announcement.

PS: I assume a small amount of production could be used for their current partners (Daimler/Toyota).

 

[772]

SolarCity seems pretty obvious as a partner for powering the factory with solar.

Here's a wild and crazy idea: Google invests in Tesla on the gigafactory, drops in a billion or two. Likely? Absurd? We'll know soon enough.

If SolarCity can get their hands on cheap battery storage, that's going to allow them to sell/lease bigger systems (with better margins I'd assume). Win-win.

 

[Krugerrand]

That influences ongoing external battery demand for S and X...

How do you figure that? The Giga Factory is being built specifically in conjunction with the development of Gen III. That was clearly stated. Battery supply for Model S and X has long since been solved by the new Panasonic agreement and the subsequent reopening of previously closed battery lines.

 

[tftf]

How do you figure that? The Giga Factory is being built specifically in conjunction with the development of Gen III. That was clearly stated. Battery supply for Model S and X has long since been solved by the new Panasonic agreement and the subsequent reopening of previously closed battery lines.

Yes, that supply is secured. I meant switching over supply for S and X once the factory is ready. Maybe the batteries for these two "older" (by then) models continue to be supplied externally, it could also derisk the supply chain (more than a single location for battery supply).

 

[sub]

this is the least "short" I've ever heard you sound TFTF, there is hope. Looking forward to the rest of this week and next. How many poorly written bear articles with all the wrong facts as usual will we be subject to in the next few days?

 

[tftf]

this is the least "short" I've ever heard you sound TFTF, there is hope. Looking forward to the rest of this week and next.

I haven't changed my mind. I'm just waiting for more news on the battery factory for the time being (construction timeline, partners, location, investment size, a new legal entity or part of TSLA etc.)