Chickenlittle
Banned
Not referring to anyone in particular but don't feed the trolls. It will encourage more posts, never satisfy them and increase their own sense of importance
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Tesla Gigafactory Investor Thread
- Thread starter teddyg
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I posted the numbers from the Tesla 10-Q reports many times, there you can see the difference between total project size (the $5bn) and what was actually spent until Sept 30, 2015.
Same for Panasonic's numbers, they can be found in their IR reports (much smaller than Tesla's investments up to now, probably not worth reporting until late 2015 and 2016 when interior build-out starts).
As for output/full size and current structure:
Tesla’s first building phase nearly complete | Las Vegas Review-Journal
The FastCompany article linked a few posts ago just confirmed this 14% number.
What is being built today and then equipped by Panasonic etc. until 2017 (when EV cell production starts) is just a fraction of the total GF.
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Do you have to add anything factual to the discussion? If so, please correct me if my numbers are wrong and/or add your own sources and links.
To sum up one last time:
- Tesla spent most of the funds raised in early 2014 on other items (not on the Gigafactory), all that cash is spent as of late 2015.
- Tesla is only building out 14% of the entire GF building structure at the moment (late 2015).
- Tesla can equip a much smaller number of Model3 cars/year unless it adds the remaining buildings. It wil again take 2-3 years to ramp up production from the moment new construction starts.
- Tesla will have to raise substantial additional funds for the completion of the GF and the Model3 (unless you believe it can cover this with positive cash-flow, if so please add your numbers or estimates how this is possible in 2016+. I don't think this is remotely possible even when assuming much slower cash-burn going forward).
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dc_h
Active Member
Beyond bull\bear conjecture, which is currently 50% of this thread, does anyone have any estimates for production in 2016? The GF has been an investment for the last 18 months and will become a positive source of cash flow in 2016. It is likely that the second 14% of the GF will start construction in the later half of 2016 as the initial plant approaches full production. If this stage is 14% of a planned 50GW facility, than GF phase 1 should be producing about 7GW annually by the end of 2016. If Tesla is generating 15% margin, how much cash flow will they have for GF phase II? Presumably they need GF phase II for the Model 3 to start and probably need GF phase III to reach full Model 3 production.
Interested in your thoughts about capital requirements and cash flow from business operations.
Interested in your thoughts about capital requirements and cash flow from business operations.
Thank you for saying what I was thinking.
By the way, this thread still has awesome posts in it. I have to sort of skip the bickering. The reason we keep the bickering around is because sometimes it borders on interesting and gets other relevant stuff going, so we can't just assume bickering is bad. But, as an intelligent reader, you get to figure out what is nothing but trolling and ... ahem ... let's see how to say this productively: find more interesting stuff to discuss. On the other hand, I enjoyed the "now I know why you post the stuff you do ..." conclusion a handful of pages back.
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Is there a basement?
I used to walk to the second floor of a building I worked in to go to work every morning. About a hundred stair steps. From Parking 2. Up thru Parking 1, Basement, Ground, One, then finally Two. And every floor was a minimum of 20 feet tall. (Yes, the building I describe had a distinct Ground and One which were about 25 feet away from each other.)
Needless to say, Parking 2, Parking 1, and Basement were all below Ground level, away from picture sight.
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I don't actually know, but they could easily put the PV panels on stilts and put mechanical equipment underneath them on the roof, essentially two floors worth of working parts (PV panels and various non-interesting machines such as compressors, fans, and other various motors that chug along semi-continuously, and I wouldn't be surprised if a factory had a lot of them). It's not unheard of to put some electrical equipment on roofs, too, but it's pretty common to hide as much electrical stuff down low as possible since that's where the pipes come in and where the least likely damage to the electric systems will occur, as well as a better place to put the weight of the electric equipment (but far up enough to not be flooded -- mostly it's pipe distance dictated, due to resistance heat issues). In fact, a lot of mechanical stuff tends to go down low because of its weight. But in a factory? Who knows: there could be literally many floors worth of equipment, and some of it HAS to be away from other components just to cram it all in in a safe and accessible manner. I know when I worked at the Intel Hotel (factory), they had many floors worth of equipment. One whole floor was air conditioning compressors, and it was near the top. The ground floor was so crammed with stuff that they extended a lot of that stuff into the basement, which was also crammed. I never went into the hotel fab floor proper except on its periphery, so I don't know how that looked, but from the pictures, it was crammed too (until they exported it all). And, they had literally many other buildings next to that multifloor building with more mechanical stuff offloaded into adjacent areas via pipes and wires to handle stuff that didn't need to be within a couple dozen feet of the fab floor. And there were even more tanks and junk. I suppose any factory looks like that. Come to think of it, the simple cement factory I worked at looked as big and gangly with tubes and wires and ducts, and many, many machines and processes; probably a bit larger, in fact. I've never been to a refinery, and I suppose that's even more interesting -- their footprint is certainly larger.
The Car and Driver 10 Best article includes some photos of the Model S around the Gigafactory. I don't think there's anything really groundbreaking in the photos, but maybe this'll be of some interest.
http://www.caranddriver.com/photo-gallery/tesla-model-s-70-70d-2016-10best-cars-feature
http://www.caranddriver.com/photo-gallery/tesla-model-s-70-70d-2016-10best-cars-feature
This somehow seems to be your main grouse. Tesla plans to finish this by 2020 - so 5 years from now. So they have "years". I don't see what your issue is. Yes it will take lots of money and years. What is the problem with that? That they will have to raise money? There is no shortage of that in the world, especially if that Model 3 is anything even slightly more than a complete dud. And once they build one section and learn their lessons, the rest will probably go faster. The can add one at a time until 2018 and two at a time until 2020 and that should be good enough. And if any other govt. (Germany, for e.g.) gives them any incentives, they can start the second one which can send batteries to their assembly plant in Europe by 2020.
14% of 35GWh = 5GWh - still tecnically "Giga" factory
The main issue is that Tesla (in their PR) and most of the press is mixing up the full project and the current pilot plant.
If you add one additional factory (same size as Nevada) overseas there's a giant funding gap of $8-9 billion for battery manufacturing alone. Add to that cap-ex for Model3.
We will see how and when Tesla really closes that gap. Five years from today is basically 2021 already.
The competition isn't sleeping. BEV offerings and battery supply will look different by 2020. To quote just one current example:
Geely Auto Seeks 90% Sales From New-Energy Vehicles by 2020 - Bloomberg Business
We will see what's so unique about Tesla and how the assumed "30% or higher" battery cost reductions or the 35-50GWh compare with new battery plants from others.
Tesla is comparing its 2020 (maybe) plant with 2013 competitive figures.
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chickensevil
Active Member
So the "completed" 14% is not the entire structure that you see, it is a small part of that. Why do I know this? Because even the latest photos of the site shows open steel frames on the far side of the building. Sure they have raised a wall around the outside coming across the full length of the building, but the backside is still not covered. You can't very well be certified to move into a structure that doesn't even have walls all the way around it. This means that the 14% is less than the size of the structure you currently see. It may even only be that first "block" of the building out of the 4 "blocks" we saw as the structure went up (with the fifth having been pulled down, for whatever reason). If you remember when Elon's brother posted photos from the roof of the building they stated that the current structure was something like 25% of the completed building. So you have most likely around half of the visible structure having been "certified" for use.
Given that we also know that the building plans are for 5 phases of construction (assuming they are still sticking with those timelines) it was suspected that phase 1 was the largest piece of the factory. What we might have actually seen happen is that phase 1 kept going in the middle of starting phase 2 (phase 2 likely started by raising more steel than needed for that first 14% of the factory).
This would imply that they are actually in the middle of Phase 2 of construction and possibly also starting Phase 3 in parallel. Again, the original timelines that were published showed this overlapping period between the phases.
Point is, you are cherry picking the data to meet your narrative, which I still don't even understand what is so negative about what you are suggesting overall anyway... but in either case, I don't think 14% is what you think it is.
Combine that with comments that they were planning to go bigger than originally stated (they added a whole extra floor on top, it was originally to only be a 2 floor building) and that they have already underestimated how much production they would get out of the usable space by doing a more optimized flow, and you don't have any accurate way of attributing the amount of money already spent vs what they still need to spend.
So to your points:
I already rebuffed this, it depends on how you look at their spending vs capital raises. Do you deny that they are sitting on 1.4B in cash? at the end of 2014 they had 1.9B, at the end of 2013 they had 845M, and 2012 201M. I said this previously, and I'll say it again. They are still sitting on enough cash currently to finish building out the factory (at least their share of it), Every time it depletes down from other spending they pull it back up again with some kind of cash flow injection (e.g. line of credit, capital raise, etc). The only thing any of those other cash flow injections after the major one happened has not been stated for is to add on to the gigafactory. All of the cash additions have been to ensure they keep enough cash on hand to continue to expand the gigafactory at a pace that works for them, while being able to grow other parts. So no, they "technically" haven't spent all the gigafactory money, because there is still 1.4B sitting as cash on hand.
To put it another way, it isn't like when you do your own personal finances that you go and physically separate out your cash. 1k for housing, 500 for car, 250 for food, 250 for other stuff... right as your paycheck comes in, you immediately separate out that cash, even though you might be getting a whole other paycheck (assuming bi-weekly paychecks) before you owe on your house. As long as you pay for your house when it is due, it doesn't matter if you pull 1k per paycheck or 2k in one paycheck does it? And if your grandma gives you 100$ and says, here I want you to buy 100$ in clothes (gigafactory raise), you turn around and spend that physical 100$ immediately on a fancy dinner with your significant other (building out fremont), but then take 100$ from other cash flows coming in like your paycheck (Tesla doing the 750M cash raise) to buy those clothes your grandma wanted, did you not still end up spending 100$ like you promised? Does it really matter that you didn't spend that specific 100$ she gave you, physically walk over to the store with that 100$ bill that she wrote on the front of it even "from grandma with love", and set it on the counter to pay for clothing??? No, it doesn't. In the end, you still spent 100$ on clothing.
Now, stop playing semantics over their cash...
See my comments above, there is no way that 14% is the full entirety of the visible structure. the visible structure is very likely greater than 25% of the total building
Cool, they are already doing that. The point at which they stated to hit 500k a year was by 2020, as long as the building is completed by 2017 as their original timelines stated it would, then they have 3 whole years to move in equipment and get things up to 500k. What we know is they are on track to start cell production well ahead of needing it for the Model 3, and their construction timeline leaves them with 3 years to fully ramp production. They didn't specify that in 2017 they would make 100k, 200k, or whatever arbitrary number of cars. They said they would *start* production in 2017 of the Model 3, and be doing 500k in 2020. I see nothing that says that they won't be able to do either of those stated goals. The specifics behind getting from 1 car to 500k hasn't been outlined yet, or even hinted at... so I am not sure what your point is here.
People have provided plenty of ways that the factory can self-fund the rest of the expansion should they decide to go that route, in this thread and in many other threads... if I recall the only rebuff was "they won't hit those margins necessary to do that", but noone ever provided a proper counter reasoning why they couldn't hit the margins... So quid pro quo, why don't *YOU* provide numbers and data as to why this isn't possible using numbers that others have been so kind to provide in the past on estimated sales, gross margins, operating costs, and assumed net profits (minus cost of expansion, cap ex, and increased spending as they grow out the sales, service, supercharging, and other things). Convenient to say "I don't think it's possible" while pushing the burden of proof off on someone who actually has responded to provide this information in the past. The best one I ever saw posted on this was by DaveT, go back and read through his thread as to how they could use the funding from one factory to enable exponential growths assuming they can maintain a remote semblance of margins of what they are doing now.
JRP3
Hyperactive Member
Because, as has been repeatedly pointed out, they added another floor and have found ways to fit more production capacity in a smaller footprint. It's so simple and easy to understand that one would have to actively try not to.
ev-enthusiast
Active Member
No, they are still talking about 14%.
The FC article is only a few days old, long after additional interior space (more floors etc.) was apparently added:
Elon Musk Powers Up: Inside Tesla's $5 Billion Gigafactory
1.9 million sq ft today
13.6 million sq ft "planned"
That's 14% in my book.
I don't know why some people keep saying more than that is done (see chickensevil's post) when this FC article - with direct access to Tesla sources - states these numbers clearly.
Tesla can announce 10 Gigafactories worldwide and one on Mars, buy more land in Nevada etc. - the fact remains that only 2 million sq ft are available at the moment.
Therefore the battery output capacity remains limited until the rest is built (which will be clearly visible as soon as construction starts).
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I don't believe you guys actually believe that Musk is satisfied at the rate Tesla will be adding battery capacity. Tesla Energy alone can probably use the entire gigafactory capacity this decade.
I don't agree with tftf that there is some indicator of a problem with the M3 here. But I do wonder why a second major structure hasn't been started. The only reason I come up with is inadequate capital.
2020 begins in 50 months. Tesla needs 1gWh of battery for every 20,000 M3 produced.
I don't agree with tftf that there is some indicator of a problem with the M3 here. But I do wonder why a second major structure hasn't been started. The only reason I come up with is inadequate capital.
2020 begins in 50 months. Tesla needs 1gWh of battery for every 20,000 M3 produced.
I didn't talk about a Model3 problem here. My only prediction about the Model3 is that this car will be likely be delivered late (compared to latest 2017 release estimate), likely by 2018-2019 only and/or could cost more.
Since I assume the Model3 is late, these GF delays and capacity restrictions at 14% of the total probably won't matter a lot until the next decade - the real problem for Tesla is growing competitive pressure because of these delays:
1. New battery technologies evolving (worse ROI for Gigafactory beyond 2020) and
2. Large battery suppliers like Samsung/LG etc. ramping up production worldwide in current Li-Ion technology as well as pouch/prismatic cell costs closing in on cylindrical cell costs.
JRP3
Hyperactive Member
@tftt If TM was pushing their existing cash into building 2-3 more structures the size of the one they have now, you would be patiently explaining why they are building too fast and they haven't even built anything in the first building and they are recklessly burning cash.
I for one am thrilled they are taking a pause to get the pilot plant doing something before rushing into the next phase.
I for one am thrilled they are taking a pause to get the pilot plant doing something before rushing into the next phase.
Of course the March 2016 "mule unveiling" is on. I never wrote/estimated that this event will be delayed.
Remember that the Model X was shown in February of 2012 already:
Tesla Unveils Model X | Tesla Motors
I doubt that car will be shipping in volume before Q1 2016.
"Unveil" means little compared to the actual volume production date - I think volume production will start by 2018-2019 only. That's the date that counts for investors in terms of cash-flows etc.
An "unveil" or "photo op launch" with a few cars (the recent Model X launch was the prime example for that) is often nothing more than smoke and mirrors.
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This is obvious. They will deliver in order: founders (loaded), sigs (loaded), production (loaded), production (not loaded). If Model 3 market is 10X Model S market (conservative estimate), then all those should be 10X, e.g. 10k sigs instead of 1k/market. If you are expecting even one 35k base Model 3 delivery before 2019, you are expecting wrong. So to meet late 2017 deadline, they can and probably will do something similar to the Model X - some founders and sigs. Expect 2018 to be only loaded cars and 2019 to be well equipped cars. The price of the Model 3 IMHO will be Model S - 35k, not Model S/2. So loaded Model 3 = loaded Model S - 35k, not loaded Model S/2.
New battery technology does not become cost competitive and volume production overnight. And if you think Tesla has no idea about any viable volume/price competitive tech that is around the corner, you are wrong once again. Anybody who makes such tech will obviously shop it to Tesla first - after all they are the most battery hungry company in the world. And the rest of the 86% of the Gigafactory and any future one can make that.
--Update--
So the only real problem I see Tesla having is media misinterpretation of the Model 3 signature as "Tesla's 35k car turned out to really be 100k", toy for the rich, waste of govt money, blah blah while the reality is different. Hopefully Tesla PR gets their act together by then, unlike the Model X.
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I just updated my view on LG Chem in this post: #18 which is a more appropriate thread to discuss them.
Right now, their nameplate capacity is somewhere around equal to Panasonic's capacity and somewhat equal to Gigafactory phase 1. Note that actual production is a far cry from nameplate capacity. By end of 2016, they will likely have somewhere around 50-60% of Tesla + Panasonic (for Tesla).
Right now, their nameplate capacity is somewhere around equal to Panasonic's capacity and somewhat equal to Gigafactory phase 1. Note that actual production is a far cry from nameplate capacity. By end of 2016, they will likely have somewhere around 50-60% of Tesla + Panasonic (for Tesla).
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