Tesla Gigafactory Investor Thread

[TSLAopt]

That is really weird, this isn't a Mars Colonial Trasnsporter, it's a factory. It's been done 1000 times before and there's many companies that specialize in that sort of construction. Heck, there's a division of my company that builds nothing but Costco's.

It must be an allusion to the issue being political in nature. "Just because we've broken ground doesn't mean we're making batteries yet."

There are a lot of folk who want to see Tesla fail and do not want o see the Giga factories in production...many of these folks have influence over lawmakers, etc. this is a smart move by Elon just incase they choose one location then some new politicians come in influenced by big Oil money and try to shut it down...then there is still a 2nd location.

 

[TSLA Siempre]

Agree. This is a peculiar strategy, but I'm sure the reasoning is sound. I'm thinking part of the calculus is that they will also have a head start on the second GF when the time is right, provided there are no 'issues'

 

[DaveT]

There are a lot of folk who want to see Tesla fail and do not want o see the Giga factories in production...many of these folks have influence over lawmakers, etc. this is a smart move by Elon just incase they choose one location then some new politicians come in influenced by big Oil money and try to shut it down...then there is still a 2nd location.

I agree that breaking ground in 2 or more locations makes a lot of sense when so much is riding on the gigafactory and it's timeline. I would imagine that there are several stages of permits required so even after breaking ground the local authorities could hold up a permit or show red tape. After several months it'll be clear which local government is easier to work with and who will fulfill their promises.

The negative to this strategy would be the extra costs required. But Tesla could get creative and have some kind of approach where they're getting the land for next to nothing.

Also it's entirely possible that they start on two locations and end up choosing one but later using the second one as well for another gigafactory.

 

[Citizen-T]

I'm going to go with the theory that one Gigafactory is not enough and he wants two in the U.S. He just doesn't want to come out and say it yet.

 

[Krugerrand]

I'm going to go with the theory that one Gigafactory is not enough and he wants two in the U.S. He just doesn't want to come out and say it yet.

*This*

O'Connell already let 'gigafactories' (plural) slip in his most recent interview.

 

[Jack6591]

Elon Musk Quote

"My instructions to the team are to spend money as fast as they can spend it without wasting it,"

This statement has left me wondering about partnership negotiations. Is it possible that major partners are joining Tesla's push forward?

The next few weeks could prove very interesting.

 

[chickensevil]

That WSJ journal article originally had a quote from Elon saying they would likely build two factories in the interest of time. Unfortunately that article got edited and the quote taken out! I hate it when newspapers do that!

Meanwhile, Tesla buys another factory in California: Tesla Begins Manufacturing Modifications On Its New 431,000 Square Foot Facility In Lathrop, California

Putting 2+2 together, I think Tesla has an aggressive timeline for their gigafactory, their negotiations with the states for tax breaks and locations aren't going as fast as they would like, so they are going ahead and starting initial work on gigfactory production in the new 431,000 square foot facility they just bought.

This factory is for CNC only, or so I have been told.

Edit: Just in case you don't know what CNC is (since I didn't until this week... haha!) Numerical control - Wikipedia, the free encyclopedia

 

[palmer_md]

This factory is for CNC only, or so I have been told.

CNC is a music factory. Here is the link


I did a drive by yesterday hoping to see some signs of a supercharger installation at the Lathrop site. No luck, but I did see lots of activity at the old Mopar distribution center that Tesla purchased. The site has been empty for years now, but I saw a dozen or so cars in the lot and you can see all the lights on inside the warehouse. There was some light construction visible on the north side of the building. Looked like they were modifying a doorway or something (can't see very well from the west side front of the building). Not a great site for superchargers since it is too far to walk to anything. You'd be just stuck sitting in your car if they used this site, but I thought I'd look anyway. I had a friend who worked there, so its nice to see it getting back to use.

 

[dalalsid]

I'm going to go with the theory that one Gigafactory is not enough and he wants two in the U.S. He just doesn't want to come out and say it yet.

One gigafactory is not enough. Production maxes out in 2020 with 500k cars. So GF2 needs to be online by 2021 i.e. construction begin in 2017/2018. Might as well get the land and state issues sorted out now.

 

[AlMc]

One gigafactory is not enough. Production maxes out in 2020 with 500k cars. So GF2 needs to be online by 2021 i.e. construction begin in 2017/2018. Might as well get the land and state issues sorted out now.

I agree. In one of DaveTs Google chats this was discussed with CapOppressor, a well respected early member of the TMC investing group. He was worried that the initial Gigafactory could supply only 500k cars....not enough in his opinion. Nice to see we may have many factories planned in the near term.

 

[hobbes]

Just found a Tesla job opening for a Senior Mechanical Design Engineer - Gigafactory at Tesla Motors in Palo Alto, CA - Job | LinkedIn - first one that explicitely mentions GF I guess? One requirement is

Happy to travel and stay for extended periods of time at construction sites

so looks like someone to technically coordinate the GF construction.

 

[Cattledog]

I agree. In one of DaveTs Google chats this was discussed with CapOppressor, a well respected early member of the TMC investing group. He was worried that the initial Gigafactory could supply only 500k cars....not enough in his opinion. Nice to see we may have many factories planned in the near term.

Extra capacity but also redundancy. Tesla is vulnerable right now with solely one supplier, they'd be vulnerable to some sort of industrial accident, political malfeasance, or natural disaster with only one Gigafactory (even if they were still getting a nominal supply of batteries from Panasonic's plants).

 

[vgrinshpun]

One gigafactory is not enough. Production maxes out in 2020 with 500k cars. So GF2 needs to be online by 2021 i.e. construction begin in 2017/2018. Might as well get the land and state issues sorted out now.

Will ten do? According to the article that was linked on TM twitter feed Elon apparently have remarked that total of TEN GF will eventually need to be built in US: Tesla CEO Elon Musk says he eventually wants to build 10 gigafactories in the U.S., Chen said.




Twitter / phxbizjournal: Our tech reporter gets behind

 

[chickensevil]

Will ten do? According to the article that was linked on TM twitter feed Elon apparently have remarked that total of TEN GF will eventually need to be built in US: Tesla CEO Elon Musk says he eventually wants to build 10 gigafactories in the U.S., Chen said.




Twitter / phxbizjournal: Our tech reporter gets behind

10 at 500k supply is really only 5 million cars a year. That puts them on the verge of becoming a top player in the market. So I would say at least another 10 across the rest of the world in order to supply 10 million cars and then they would be hitting close to GM and Toyota. Totally reasonable numbers.

but we need to get the first one built! Come on already! Haha

 

[InTheShadows]

10 at 500k supply is really only 5 million cars a year. That puts them on the verge of becoming a top player in the market. So I would say at least another 10 across the rest of the world in order to supply 10 million cars and then they would be hitting close to GM and Toyota. Totally reasonable numbers.

but we need to get the first one built! Come on already! Haha

Yea, I did the calculation and came up with just USA sales that would put them at $300B in sales. Toyota in FY14 did $187B globally. It kinda gives the scale of Elon's vision.

 

[Robertj]

Panasonic 31 March ,2014 Results

http://panasonic.co.jp/corp/news/official.data/data.dir/2014/04/en140428-5/en140428-5-4.pdf

See page 9 of results

The automotive battery divisions increase in sales and increase in profitability
Cannot be ignored by Panasonic management

85 b yen of a total of 300 b yen and a 290 % increase in automotive division profits on prior year

 

[Chickenlittle]

http://panasonic.co.jp/corp/news/official.data/data.dir/2014/04/en140428-5/en140428-5-4.pdf

See page 9 of results

The automotive battery divisions increase in sales and increase in profitability
Cannot be ignored by Panasonic management

85 b yen of a total of 300 b yen and a 290 % increase in automotive division profits on
they also discuss doing an investment in auto or housing industry's of a billion dollars if I am correct on conversion from yen. Of course money not needed immediately

 

[FluxCap]

Panasonic earnings letter is out, call is now. From the 2014 Annuals, this is Panasonic 2015 guidance:

3) Automotive business
In automotive battery business, Panasonic will vigorously expand business by making appropriate investment in both cylindrical li-ion batteries for U.S. electric vehicle manufacturers and prismatic li-ion batteries, and other types.

Also, this is from the letter:

 

[Johan]

Couldn't they just have written 18650 cells for Tesla instead of "cylindrical li-ion batteries for U.S. electric vehicle manufacturers". Also I wonder who the manufacturers are?

So this seems to seal the deal about Panasonic being the main partner in the Gigafactory, right?

 

[FluxCap]

Couldn't they just have written 18650 cells for Tesla instead of "cylindrical li-ion batteries for U.S. electric vehicle manufacturers". Also I wonder who the manufacturers are?

So this seems to seal the deal about Panasonic being the main partner in the Gigafactory, right?

I don't know but this sure doesn't look like a company scaling back on one of its best business divisions, batteries for Teslas.

Via techmaven, from audio on the earnings call happening right now:

* They expect to invest about $146 USD million ($10-15billion yen) in automotive batteries in FY16.

* They had already announced they will supply 2billion cells for Tesla Motors alone from 2014 through 2017 for Model S/X, so that's about 275,000 Model S/X cars we think.

* Expanding and completing their Sumino battery plant in 2015 for at least 600million cells annually.

* Talking about automotive segment "The major driver behind profit and sales this year has been Tesla"

* They talk about Tesla’s projections and that as Tesla’s sales increase, Panasonic's sales and profit increase, which means they make operational profit on the Tesla batteries today and they lose money on PC batteries


Now you tell me if that isn't a company that will commit significantly to the Gigafactory, just as Elon said they would.