Tesla Gigafactory Investor Thread

[Jeff N]

Musk seems to have a really severe blind spot when it comes to trains, so he's probably going to completely screw this up and create massive traffic jams and 20-minute hikes across the parking lot, but who knows, maybe he'll figure it out.

Separately from the issue of employee commute transportation, a Tesla employee at the Gigafactory opening party told me that Tesla modeled the cost of railroad versus truck transport in and out of the factory and determined that building a railroad spur and using trains only becomes cost effective when the factory is near or at full production.

So, Tesla plans to do this eventually but not for the first 2-3 years.

 

[Model 3]

What they *should* do -- and Musk isn't doing this because Musk has a stupid blind spot when it comes to trains -- is this:

-- build a railroad spur connecting to the factory.
-- Use this to ship batteries from Nevada to Fremont, on special "battery trains". (Eventually they can use battery powered locomotives -- why not?) Batteries are heavy and there will be a lot of them; the huge truck traffic would be dumb and is unnecessary when you can run a 100-car train full of batteries.
-- Run an employee railroad passenger shuttle (again, using battery locomotives) from downtown Reno for each shift. A little three-car train can carry more than 300 people, and of course it can be made as long as needed.

The people who live in or near downtown Reno would then not need to commute by car.

The thing about automobiles is, they don't scale up. They're great for people going every which way at different times. They're absolutely horrible for 1,000 people arriving all at once for a single work shift. That's what a train (which can carry a huge number of people at once) is for.

Musk seems to have a really severe blind spot when it comes to trains, so he's probably going to completely screw this up and create massive traffic jams and 20-minute hikes across the parking lot, but who knows, maybe he'll figure it out.

Fully agree. And not just for batteries and employees, but also for raw materials into the factory. Remember the first concept drawings of the GF (before it's location was determined)? It clearly showed rails going into and around the factory.

 

[TheTalkingMule]

Locate the next gigafactory in the footprint of an obsolete coal strip mine. The rail system would already be in place and maybe that would get Buffett to back off in Nevada.

 

[neroden]

Locate the next gigafactory in the footprint of an obsolete coal strip mine. The rail system would already be in place and maybe that would get Buffett to back off in Nevada.

That's actually a pretty cool idea. Next Gigafactory in the US probably needs to be near the east coast. I wonder how much incentive poor old West Virgnia would offer? Maybe Pennsylvania would offer a better deal...

....but actually it would probably be easier just to put it in Buffalo near the SolarCity factory. With the car factory next door as well. There are gobs of rail lines around Buffalo for all the old industry which used to be there, lots of disused land, much flatter than Pennsylvania or West Virginia, and there's even a port for shipping stuff out direct by ship.

 

[neroden]

Separately from the issue of employee commute transportation, a Tesla employee at the Gigafactory opening party told me that Tesla modeled the cost of railroad versus truck transport in and out of the factory and determined that building a railroad spur and using trains only becomes cost effective when the factory is near or at full production.

This makes sense. Trains are best for HUGE SCALE. They don't scale down well.

So, Tesla plans to do this eventually but not for the first 2-3 years.

Thanks for the information.

Surely they'll be at full scale well before the end of 2 years, however? Their original modelling was undoubtedly done before they got 400,000 Model 3 reservations and before they started selling 80-megawatt-hour Powerpack systems every month.

 

[neroden]

So I took a look at the google maps and street view and (aside from JohnSnowNW's point about the cost of that spur station) there's the issue with parking. The 6-level parking structure to the west is a paid parking structure. Plus the tracks are actually below grade and shared with freight and Amtrak. The train might be highly efficient at moving 300 people at one time, but it's probably not going to be a good solution for moving 1000 people within an hour.

Three 35 passenger buses (electric BYD? Proterra?) every 6 minutes would get it done and for much less than the spur station.

For much *more*. The full cost of running gazillions of buses ends up being a lot higher than the cost of putting them on tracks and hooking them together with drawbars, once you're hauling enormous numbers of people. Though Nevada taxpayers might pay for all the road maintenance, providing a hidden subsidy for using buses instead of trains.

Edit: I do get your point about energy efficiency for transporting people, but I just never liked trains as a transportation solution, because of their lack of flexibility.

Yeah, flexibility is great *when you aren't trying to move a huge amount of stuff or a huge number of people along a single route*. When you are, which is what's going to happen with this factory (since practically every employee will be living on the same side of it and coming in on the same road, and nearly all the batteries will be headed to California) flexibility is pretty much irrelevant and volume is what matters.

If the factory ends up totally automated and employing only 100 people, obviously, cars will do just fine. And maybe it will.

 

[TheTalkingMule]

That's actually a pretty cool idea. Next Gigafactory in the US probably needs to be near the east coast. I wonder how much incentive poor old West Virgnia would offer? Maybe Pennsylvania would offer a better deal....

I've been shouting from the mountaintops that Philadelphia is the ideal port town for Gigafactory 2. We have 2 massive refineries right on the Delaware River that are essentially mothballed, obsolete and worthless. We have a mayor and governor in place who I could easily see putting together a package similar to the Buffalo deal(minus some of the more ridiculous machinery build out). The land is prime and could be had for free with the state handling remediation, splitting the expense with the refinery companies.

We have entities in Pennsylvania pushing for a massive LNG operation at our underutilized ports. There's political backing from our corrupt state legislature and unions, but fortunately the economics of LNG and general pipeline opposition are getting in the way. A gigafactory could make Philadelphia a TRUE energy hub of the future rather than an ATM for a few guys in Oklahoma City.

 

[neroden]

I've been shouting from the mountaintops that Philadelphia is the ideal port town for Gigafactory 2. We have 2 massive refineries right on the Delaware River that are essentially mothballed, obsolete and worthless. We have a mayor and governor in place who I could easily see putting together a package similar to the Buffalo deal(minus some of the more ridiculous machinery build out). The land is prime and could be had for free with the state handling remediation, splitting the expense with the refinery companies.

I'd worry about sea level rise in that district of Philly. I suppose they could elevate it. (Buffalo avoids that problem, obviously.)

 

[TheTalkingMule]

I'd worry about sea level rise in that district of Philly. I suppose they could elevate it. (Buffalo avoids that problem, obviously.)

We're about 20ft above, so when New Jersey goes under we become the new beachfront. Win-win.

I'd love to have someone do a regional economic impact study on the two options of pushing fro an LNG port or becoming the east coast battery hub.

 

[Model 3]

With the car factory next door as well.

If I recall correctly Elon has hinted that the next GF will be even more integrated then GF-I, with both a battery factory and a car factory under the same roof.

 

[kenliles]

Open letter to Tesla and it's shareholders:
As Tesla enters it's transformational period to become the largest single producer-user of Li batteries in the world (by a long shot). It's name will quickly become synonymous with that production- most especially given the vertical end-to-end (including chemistry) sourcing. That will carry a pro-active responsibility we all know is coming and rightfully so (Tesla acknowledged, and to prove over time).

As shareholder we should all inform ourselves of the humanity issues involved (Apple has taken a strong lead in this area). After all the entire purpose of Tesla is to save humanity from itself. Read the following researched article and please don't skip the 2 imbedded videos.

This is where your smartphone battery begins



Apple estimates 20% of cobalt it uses comes from Huayou Cobalt. And is taking very pro-active steps to remedy in a meaningful way:
Paula Pyers, a senior director at Apple in charge of supply-chain social responsibility, said the company plans to increase scrutiny of how all its cobalt is obtained.

Quoting From the article's research:
"
Pyers, the Apple senior director, said the company does not want to take steps aimed at just “making the supply chain look pretty.”

“If we all cut and run from the Democratic Republic of Congo, it would leave the Congolese people in a devastating position,” Pyers said. “And we will not be a party to that here.”

Starting next year, Apple will internally treat cobalt like a conflict mineral, requiring all cobalt refiners to agree to outside supply-chain audits and conduct risk assessments.

Apple’s action could have major repercussions throughout the battery world. But change will be slow. Apple spent five years working to certify that its supply chain was free of conflict minerals — and that action was enforced by law.
"
...
"
Most Tesla models use batteries from Panasonic, which buys cobalt from Southeast Asia and Congo. Replacement batteries for Tesla are manufactured by LG Chem. Tesla told The Post it knows LG Chem’s Tesla batteries do not contain Congolese cobalt, but it did not say how it knows this.

Tesla, more than any other automaker, has staked its reputation on “ethically sourcing” every piece of its celebrated vehicles.

“It is something we do take very seriously,” Kurt Kelty, Tesla’s director of battery technology, said in March at a battery conference in Fort Lauderdale, Fla. “And we need to take it even more seriously. So we are going to send one of our guys there.”

Six months later, Tesla told The Post it is still working on sending someone to Congo.
"

I invite Tesla shareholders to inform themselves and keep Tesla-feet-to-fire.
For my part, I say, EM and Tesla:
This is a well researched and known issue of severe consequences. Don't allow this to stain the Tesla mission and brand, instead turn it into an opportunity to define it meaningfully.
There is NO ACCEPTABLE EXCUSE later- It must be handled with force, vigor and conviction from the start (now)
- recovery of misstep is not an option.
We'll be watching...

kl

 

[ggies07]

Thank you for making us aware of this sad situation. I truly hope Tesla is telling the truth.....

 

[AudubonB]

To Ken re post #2892:

This is not to correct you, as I have no desire for this post to end up in the "Misteaks" thread. Rather, it is to provide food for thought.

I have a difficult time - that is, I read no further - when someone mentions he or she is posting an Open Letter to some entity....and the first two lines of the post contain three elementary-school grammatical errors. I know others have different opinions, but it's an easy shibboleth for me: if you are sloppy with your grammar, there is a strong likelihood you're sloppy also with your logic or your facts or both.

Caveat scriptor.

 

[kenliles]

To Ken re post #2892:

This is not to correct you, as I have no desire for this post to end up in the "Misteaks" thread. Rather, it is to provide food for thought.

I have a difficult time - that is, I read no further - when someone mentions he or she is posting an Open Letter to some entity....and the first two lines of the post contain three elementary-school grammatical errors. I know others have different opinions, but it's an easy shibboleth for me: if you are sloppy with your grammar, there is a strong likelihood you're sloppy also with your logic or your facts or both.

Caveat scriptor.

My apologize for the grammatical errors. I would edit but it's too late I guess.
Definitely a shame, as I think it might have been worth the read for you (I didn't present any facts, only the research article).

Thanks for calling me out on it;
Note - I didn't post #2892 - that was from someone who did read it.
Regardless of that error in the first line of your admonishment, I did read yours, and very much appreciate the corrective action.
I'll attempt to improve in the future-- if you'll do the same

edit:
[by the way - that's not a snark - Audubon is correct. I should have been more attentive for an Open Letter. I was scrambling on an unrelated deadline this morning. I think I'll just watch for a while- gotta run]

 

[Cobbler]

Time to load up ECS shares (former FCO)?

 

[quartzav]

New (Sep 24) aerial pics of GF 1 by electrek: Tesla Gigafactory: new aerial shots show plant more than doubling in size [September 2016 update]

Any guesses as to what this "hole" is for? To me it looks like not really that deep, more like a circular area that is flattened - but what for? Not big enough to hold solar panels (which will go on the roof, anyway). A huge windmill? Doesn´t really seem likely either. Something to do with geothermal?

geothermal reservoir

That's a pad. I don't know what they're putting on it, but it's very definitely a pad to set something on. A water tank is an interesting possibility. It would also be a good place to plant a wind turbine, but I bet they put those further out from the factory.

I agree is likely a geothermal reservoir. But why only one?

 

[tander]

Locate the next gigafactory in the footprint of an obsolete coal strip mine. The rail system would already be in place and maybe that would get Buffett to back off in Nevada.

If I recall correctly Elon has hinted that the next GF will be even more integrated then GF-I, with both a battery factory and a car factory under the same roof.

All this talk of gigafactories, coal mines, and railroads reminds me that Musk is already going to be talked about like a Vanderbilt, Rockefeller, or Ford in fifty or a hundred years, modern day tycoon or baron for sure.

I think somewhere in Asia makes the most sense for the next Gigafactory/Car/Solar plant. Considering that China has a greater need for this technology than maybe anywhere else, I wonder if Tesla could get away with doing some sort of factory without a Chinese partner or at least on more favorable terms than US/Chinese partnerships currently get. I think they've been trying to hold out for that sort of situation and offers have likely already been extended. It would be interesting listen in on their Chinese negotiations so far and to see if Tesla can ever really go full steam into the Chinese market, it would make their long-term growth possibilities pretty historical.

 

[TheTalkingMule]

I think somewhere in Asia makes the most sense for the next Gigafactory/Car/Solar plant. Considering that China has a greater need for this technology than maybe anywhere else, I wonder if Tesla could get away with doing some sort of factory without a Chinese partner or at least on more favorable terms than US/Chinese partnerships currently get. I think they've been trying to hold out for that sort of situation and offers have likely already been extended. It would be interesting listen in on their Chinese negotiations so far and to see if Tesla can ever really go full steam into the Chinese market, it would make their long-term growth possibilities pretty historical.

Does the pending TPP agreement have any impact on this kind of plan? I can't imagine Tesla would want to build directly in China since there's nothing keeping the gov't from undermining their efforts if they so choose. The balls-out way that Elon operates isn't really conducive to rolling the dice on a country that makes the Nevada state government look "renewables friendly".

If TPP were to pass, does that make it easier(more likely) for Tesla to locate GF2 in a non-Chinese Asian signatory?

 

[Jeff N]

Most Tesla models use batteries from Panasonic, which buys cobalt from Southeast Asia and Congo. Replacement batteries for Tesla are manufactured by LG Chem. Tesla told The Post it knows LG Chem’s Tesla batteries do not contain Congolese cobalt, but it did not say how it knows this.

A later article in the Post quotes an LG Chem spokesperson as saying they stopped buying Congo-sourced minerals in late 2015.

I wrote about that here:
https://teslamotorsclub.com/tmc/posts/1765989/

 

[tander]

Does the pending TPP agreement have any impact on this kind of plan? I can't imagine Tesla would want to build directly in China since there's nothing keeping the gov't from undermining their efforts if they so choose. The balls-out way that Elon operates isn't really conducive to rolling the dice on a country that makes the Nevada state government look "renewables friendly".

If TPP were to pass, does that make it easier(more likely) for Tesla to locate GF2 in a non-Chinese Asian signatory?

That's a good q, I haven't paid enough attention to the TPP to know. Normally China is pretty entrepreneur friendly, except that they expect outsiders to do a 49/51 partnership with an insider, so basically they have to give away their controlling rights. Musk is a pretty huge control freak and has a lot of leverage so I would guess he'll fight that harder than probably anyone ever has. But then again they've been really smart about partnerships so far, for example getting Panasonic to pay for the Gigafactory. I wouldn't be surprised if they end up biting to a partnership in China where maybe they do the 49/51 interest thing, but the Chinese partner has to put up most of the cash. I would guess they started negotiations a year or two ago, and you'd think they'll need to get going on the next factory in the next year or so, but I don't know maybe they will come up with something more creative. With Musk's South African roots I wonder if that might end up being a good compromise, but then they'd still have to contend with exhorbitant Chinese import taxes.