Tesla Gigafactory Investor Thread

[chickensevil]

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.

Wow... really??? All that detailed response, and THAT is what you got from my comments... and you wonder why people stopped engaging with you in a discussion. Way to take what I said COMPLETELY out of context and yet again cherry pick things to suit your narrative. I don't know why anyone even bothers trying with you...

I suppose I am a glutton for punishment... I did not say that more than that was *FINISHED* (or as you state "done", but done by definition means finished, completed), I stated that more than 14% was in progress. Hence the comments toward a partially complete building still being visible in the latest photos.

Or do you honestly think that any permitting and safety board is going to allow someone to move into a building that doesn't even have all of the outside walls around it (never mind whatever the interior looks like)? I mean... do you think this? If so, then you should try building something sometime... get about halfway through making like, a house, or something, leaving like one of the walls completely off the side, and then go ask health and safety if it is ok for you to move your entire family into the house, and to turn on the utilities and such. Because you will be in for a surprise.

This implies that the stated "14%" which they have started to move equipment into and begin using is closed off and completed construction such that it would pass those checks. Meanwhile they continue adding on to this "completed" building with extra construction.

 

[stopcrazypp]

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.

The Gigafactory was originally planned for a maximum of 10 million square feet, so 1.9 million is right on target for a phase 1 out of 5. It's just that they have expanded their goals beyond that.
http://www.bizjournals.com/sanjose/news/2014/02/26/tesla-unveils-plans-for-10-million.html

 

[Rarity]

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.

Lots of possibilities. It seems that the whole industrial center is under construction, so, for example, some workers could be turning for a few months to construction of the Switch facility.

 

[chickensevil]

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.

Ummm, 1.4B is inadequate to continue? And you are making assumptions that they have stopped. That is a false statement. They have not stopped construction. Construction consists of more than just steel beams and a metal roof. See my other responses on this subject of where they are with construction... don't feel like repeating myself.

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.

Release date and volume production are two different things and always have been for Tesla. You are likely right that investors care more about volume production rather than meeting a release date (hence why the stock hasn't currently gone anywhere after the Model X release). But All Tesla has promised is a H2 2017 *release* of the Model 3. They have not made comments either way about volume production that I can recall. So no, they won't "be late" based on what they have promised given the most recent comments from the company. That might not be what *you* want the company to do, but that doesn't mean that it is late, and it doesn't mean it will cost more.

That then makes your base of forming an assumption false, but to respond to the two points:

1. Have you listened at all to the recent interviews with Elon and JB??? They have stated plenty of times that making shifts in cells to optimize for a better battery is entirely within the capability of the factory. A new technology isn't just going to come out of nowhere. They stated that they are tracking 60 different researcher groups across the world on batteries, all serious researchers know that their primary market for their breakthrough tech is Tesla as they will happily buy it off them for whatever price, and so far... nothing... they don't even have a candidate worth starting initial discussions with, nevermind starting to implement serious testing of this cell to see if it proves worth anything. Taking a cell from the lab into mass production for vehicles takes YEARS. It isn't like we are going to wake up tomorrow and the factory will be obsolete. And any breakthrough technology is fully capable of being implemented in the factory.

2. Ok. Cool. Where is this? JRP3 has pointed out that even looking at nameplate capacity noone is close to the volume Tesla is talking about adding in one single factory. And even if they did, who cares? We need around 200 gigafactories around the world to satisfy global demand to replace all cars with electric. We don't even have 1 yet and you are "worried" about other makers encroaching on Tesla? Ok. Show me the plans for LG or Samsung to build a factory (a single factory) that is either being scouted for or already in progress with a nameplate of 30GWh or more. Even if they started tomorrow, as you said, it would take 3 years to complete construction and start production which would put 1 single factory next to Tesla starting in December of 2018. 1 factory... out of a needed 200. Are there plans in the works to go to 6TWh of production by 2018? or even 2020? Cause that is what it would take to cause a problem for Tesla having enough demand for their products. (assuming just automotive battery production, if we look at stationary storage that number goes even higher).

You keep complaining that it is taking Tesla SOOOO LONG to build this factory, and then try to say that Tesla has a risk on their hands that someone else is going to come out of nowhere with capacity. These statements conflict with one another and therefore both arguments fall apart and are now rendered invalid. You can have one argument or the other... not both.

- - - Updated - - -

PS: I'm still waiting for something proper after my response invalidating your previous points. If you don't care to provide a response then I kindly request you stop repeating them here as if it is some kind of fact. Clearly there is conjecture, you just refuse to even acknowledge the conjecture and are just spamming the thread with your comments.

 

[JRP3]

Of course the March 2016 "mule unveiling" is on. I never wrote/estimated that this event will be delayed.

Somehow you missed the first part of the quote, which was talking about Model 3 production, not the "mule unveiling". Try reading again:

I also asked him if it will be a shrunken Model S, and he said it will be similar, BUT it will have very special design. I also asked if there will be any delay, and he said very firmly “no”. I also asked if the March showcasing is on, and it is

 

[tftf]

It's just that they have expanded their goals beyond that.
http://www.bizjournals.com/sanjose/news/2014/02/26/tesla-unveils-plans-for-10-million.html

I didn't question that. On the other hand, they didn't adjust their GWh output numbers or project costs afaik. It's all planning. The pudding is in the 10-Q reports and actual other cap-ex until 2020.

The main issue is that Tesla keeps comparing these "planned" 2020 numbers with old 2013 numbers from competitors - both in terms of output and cost:

We know (see other battery thread: Battery for EV capacity developments ) that BYD and apparently also Samsung (I would need more confirmation) each talk about having around 35 GWh of output by 2020 as well.

Looking at LG's long EV battery customer list, they might even have/need more than that by the end of this decade.

I would therefore be wary of Tesla's claims being a global leader in terms of output and pricing by 2020 given the pace of its construction vs many smaller plants coming from competitors worldwide.

 

[AudubonB]

A lot of cross-currents and different topics being discussed simultaneously now; this is in reference to something three pages back...all of 12 hours ago...

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.

For the Gigafactory, however, we have heard Mr Musk say (I'm sorry, there's no way I'll be able to find the clip but it was probably between 3 and 6 weeks ago) that the roof is pristine - zero mechanical equipment on it. I am pretty sure it was the same interview where he said he refused the engineers access to any LNG for heating/cooling of the factory or for its equipment.
Just from its processing and controls - absolutely irrespective of what it is producing - it is going to be an extremely interesting factory!

 

[Svetlin]

I would therefore be wary of Tesla's claims being a global leader in terms of output and pricing by 2020 given the pace of its construction vs many smaller plants coming from competitors worldwide.

Ok, so what? Does BMW make the cheapest engines? Are they out of business because Honda makes more and cheaper engines than them?

Take a step back. The main point of contention between you and everyone else seems to be that you think disruption in the auto business is much slower than we think and that the EV market slice of the whole auto market will remain small for a long time. Therefore 100 GWh battery capacity from competitors squeezes Tesla out of the market. Everyone gets that, please stop repeating that Tesla has only built 14% of the Gigafactory.

I think we just disagree that EV market share will remain as low as you think it will be. I am betting that > 10% of new car sales in developed economies will be EV/PHEV by 2020. The more gigafactories, the merrier.

 

[tftf]

Ok, so what? Does BMW make the cheapest engines? Are they out of business because Honda makes more and cheaper engines than them?

The main reason behind the GF is driving battery costs down afaik (besides getting enough supply for the Model3 and beyond), no?

Therefore lower costs/kWh are the driver why Tesla is constructing this factory with Panasonic as "cell maker" tenant in Nevada.

Otherwise, someone can tell me the real reason why Tesla is vertically integrating and spending billions (at least that's the plan until 2020, so far they only spent a fraction of that on the GF).

 

[stopcrazypp]

The main reason behind the GF is driving battery costs down afaik (besides getting enough supply for the Model3 and beyond), no?

Therefore lower costs/kWh are the driver why Tesla is constructing this factory with Panasonic as "cell maker" tenant in Nevada.

Otherwise, someone can tell me the real reason why Tesla is vertically integrating and spending billions (at least that's the plan until 2020, so far they only spent a fraction of that on the GF).

He didn't say the prices won't be cheaper than existing. His point was that it doesn't have to be the cheapest in the industry to be successful. All it has to do is be cheap enough to support the Model 3. This is not a zero sum game.

 

[electracity]

......

Otherwise, someone can tell me the real reason why Tesla is vertically integrating and spending billions (at least that's the plan until 2020, so far they only spent a fraction of that on the GF).

Existing battery makers would not commit the capital to build the battery capacity that Tesla needed.

 

[dakh]

The main reason behind the GF is driving battery costs down afaik (besides getting enough supply for the Model3 and beyond), no?

Therefore lower costs/kWh are the driver why Tesla is constructing this factory with Panasonic as "cell maker" tenant in Nevada.

Otherwise, someone can tell me the real reason why Tesla is vertically integrating and spending billions (at least that's the plan until 2020, so far they only spent a fraction of that on the GF).

Many reasons:
1. Automotive cells they'll be making are not quite the same as what everyone else is making. In design, size, chemistry for sure and maybe other parameters. They even got patents on some of that. All of those changes from the way things are done currently are to optimize price per WH, specific energy, energy density, etc. of the whole pack not just individual cells.
2. There is a gain in efficiency to be had when batteries are made in the same facility as the packs and know-how of how to make finished packs I doubt Tesla will outsource to anyone.
3. By now we know Tesla moves quick on the execution (yes, humor me here -- maybe not as quick as they say, but as quick as possible). Having complete control over pack (note not just battery but whole pack) production and volume ramp is actually de-risking Model3.
4. As Musk is saying they're the big dog in cell production now so they are de-risking being disrupted by new battery tech because they're the ones who stand the best chance to get to be the first ones to use it.

I'm sure I can come up with more reasons if I sit here for another 10 minutes but that's what I could come up with at the speed of typing

 

[mitch672]

your wasting electrons, disk space, and your time & effort arguing with TFTF, he is a long time TSLA bear, no amount of logic or reason is going to do any good with this poster.

 

[dakh]

your wasting electrons, disk space, and your time & effort arguing with TFTF, he is a long time TSLA bear, no amount of logic or reason is going to do any good with this poster.

I don't find it to be the case. But then again maybe other folks here have too much blind faith or are much smarter than me.

 

[JRP3]

Or we've just spent a lot more time arguing with tftf and his ilk :wink: It can be entertaining, and, on rare occasions, informative.

 

[mitch672]

I don't find it to be the case. But then again maybe other folks here have too much blind faith or are much smarter than me.

go read his stuff in the comments of any TSLA article on "Seeking Mediocrity", TFTF stands for "Tales From The Future"

 

[AlMc]

your wasting electrons, disk space, and your time & effort arguing with TFTF, he is a long time TSLA bear, no amount of logic or reason is going to do any good with this poster.

I don't find it to be the case. But then again maybe other folks here have too much blind faith or are much smarter than me.

Or we've just spent a lot more time arguing with tftf and his ilk :wink: It can be entertaining, and, on rare occasions, informative.

I find the discussions informative. There is an 'ignore' option if any of us wish to use it.

 

[chickensevil]

I find the discussions informative. There is an 'ignore' option if any of us wish to use it.

As frustrating as it is to read some of his posts and then how he just conveniently ignores me or cherry picks my comments to twist what I said.... I don't tend to block people because I like seeing all sides. If this truly is the best of the Bear case (and he is one of the better ones out there) then it is reassuring that I have picked the right side of this investment.

 

[Oil4AsphaultOnly]

The main reason behind the GF is driving battery costs down afaik (besides getting enough supply for the Model3 and beyond), no?

Therefore lower costs/kWh are the driver why Tesla is constructing this factory with Panasonic as "cell maker" tenant in Nevada.

Otherwise, someone can tell me the real reason why Tesla is vertically integrating and spending billions (at least that's the plan until 2020, so far they only spent a fraction of that on the GF).

I guess I'm a masochist for jumping into this, but here goes.

tftf, yes, the GF is for driving down battery costs for Tesla. But it's also for ensuring battery supply for Tesla.

Based on your other link, IF both BYD and Samsung builds out their gigafactories, there would be enough batteries (from LG, Samsung, AND BYD) for 1.5 million long range BEV's (or ~5 million PHEV's in a global market of 90 million cars) in 2020. With most auto manufacturers producing some sort of EV by that time, Tesla's GF guarantees them battery supply (just like BYD's GF would only guarantee BYD's battery supply). Everyone else has to fight amongst themselves for whatever LG & Samsung can supply.

As Svetlin said, you think this is a problem because you don't think the EV market will be large enough. Am I wrong?

 

[AlMc]

As frustrating as it is to read some of his posts and then how he just conveniently ignores me or cherry picks my comments to twist what I said.... I don't tend to block people because I like seeing all sides. If this truly is the best of the Bear case (and he is one of the better ones out there) then it is reassuring that I have picked the right side of this investment.

I believe you will be rewarded for your decision in the long term, as will I. Now, that does not mean tftf will 'lose'. He/she may very well pick a good time to get out of his/her short position and make $$ as well.

PS: Nice posts on your part, I appreciate them and enjoy reading them.:wink: