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Tesla Gigafactory Investor Thread
- Thread starter teddyg
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That impact comes through the multiplier effect. Each high-quality manufacturing job should generate about three other full-time jobs - retail, service, other trade, education and so forth. These are REAL, not hypothetical impacts. So the 6,500 direct Tesla-jobs should expand to something like 25,000 total jobs created in Nevada.
By the way, service industries....especially Nevada's gambling....have a minuscule multiplier effect. Casinos' ancillary jobs created are low-quality and relatively few. The state absolutely needed a keystone manufacturing opportunity like the one Tesla offered - it absolutely will have an demonstrable and large positive effect on Nevada's economy for decades.
Well done to all.
FredTMC
Model S VIN #4925
Clprenz
Member
More than Tesla even asked for, Analyst should see this as a big upside or about $750 million in savings
jhm
Well-Known Member
Another tidbit, the $5B price tag is $1B for the building and $4B for equipment. Also another $5B in scheduled equipment replacement over next 10 years.
Possible implications:
1) Tesla has enough capital in hand to build the complete factory and furnish more than 25% of the equipment. IIRC, Panasonic will kick in another $1B, or 25% of the equipment cost.
2) Tesla will burn through $500M to $1B in equipment per year. At 50GWh/yr, that is an equipment cost of $10 to $20 per kWh.
3) Labor cost at $50k/yr/head x 6500 head is $325M/yr, implying labor cost of about $6.5 per kWh.
4) Energy costs at net zero could imply $0 per kWh.
5) If material costs are under $83.5 per kWh, then total cost of materials, equipment, labor and energy is between $100 and $110 per kWh.
6) NV tax benefit is about $1.25 over 20 years, say $62.5M per year, a savings of $1.25 per kWh.
So it looks like Tesla may have a path to $110 per kWh, and Nevada tax breaks are not decisive for getting there, reducing the after tax cost by only 1%.
Moreover, Tesla and Panasonic have the capital to furnish 50% of the initial equipment. Another $2B may be required. But if Tesla is able to generate say $200 revenue per kWh then there could be about $100 per kWh net cash flow, which is about $2.5B net cash year operating at 50%. In other words, half a Gigafactory could finance it's own completion from its own cash flow within the time it takes to ramp up production. There may be no need for more capital to be raised for this factory.
Possible implications:
1) Tesla has enough capital in hand to build the complete factory and furnish more than 25% of the equipment. IIRC, Panasonic will kick in another $1B, or 25% of the equipment cost.
2) Tesla will burn through $500M to $1B in equipment per year. At 50GWh/yr, that is an equipment cost of $10 to $20 per kWh.
3) Labor cost at $50k/yr/head x 6500 head is $325M/yr, implying labor cost of about $6.5 per kWh.
4) Energy costs at net zero could imply $0 per kWh.
5) If material costs are under $83.5 per kWh, then total cost of materials, equipment, labor and energy is between $100 and $110 per kWh.
6) NV tax benefit is about $1.25 over 20 years, say $62.5M per year, a savings of $1.25 per kWh.
So it looks like Tesla may have a path to $110 per kWh, and Nevada tax breaks are not decisive for getting there, reducing the after tax cost by only 1%.
Moreover, Tesla and Panasonic have the capital to furnish 50% of the initial equipment. Another $2B may be required. But if Tesla is able to generate say $200 revenue per kWh then there could be about $100 per kWh net cash flow, which is about $2.5B net cash year operating at 50%. In other words, half a Gigafactory could finance it's own completion from its own cash flow within the time it takes to ramp up production. There may be no need for more capital to be raised for this factory.
In addition, it sets a nice 'bar' for other states and as Clprenz indicated, should be picked up by analysts as a savings for TM/partners. Not getting the GF should ramp up the pressure on Texas...My pick for the next NA manufacturing and GF ( I still think China gets one first ) although I am hoping that good old Delaware gets one. TM...are you listening...You are incorporated here (isn't everyone!), no sales tax, east coast location with a good port, excellent business climate.(.incentives and Chancelory Court).....
chickensevil
Active Member
Yeah no one here was expecting this major of an incentive since everyone thought Texas would have the mist money to give... And we all saw their deal. So this is crazy good on many levels. Hopefully it contributes toward Elons suggestion that they might beat the 30% cost reduction
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I like where your head is at with all of this I do, so hope this doesn't deflate your bubble too much, but they said in the last conference call that about 4 Bn would be spent getting it up and running by 2017 and then another 1Bn would be spent getting to full speed. The 5Bn in replacement costs is a new thing so I don't know what to make of that, but just throwing out that they still need 4Bn to get it rolling.
On the other hand they could use this to fund the second factory
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What about power generation? Delaware is far too north for Solar to be amazing... Useful, just not amazing... Could do off shore wave power generation, maybe? But I just don't see anywhere on the east coast being a choice right now... Unless I missed something.
RobStark
Well-Known Member
Depends on which party is in control of the Senate next year.
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Nope, Delaware gets Fisker. :crying:
jhm
Well-Known Member
Not deflated at all. It's just a question of how quickly to ramp up. $4B up front gets us the plant plus 75% of the equipment. If they could install that much equipment and hire and train enough employees to run it all within 12 month of initiate production, that would be quite remarkable. I'd be delighted. I'd also be satified if the roll out took four years, installing $1B, quarter capacity, per year. So I'm not worried whether the ramp up is two years or four. Moreover, when they are developing concurrent gigafactories, it will be the aggregate installation rate that matters most to investors. Until they have to start replacing equipment, each $1B in equipment will add capacity for about 125k cars, or 12.5 GWh per year. So the aggregate installation rate must be tied with the overall growth of the company.
I like where your head is at with all of this I do, so hope this doesn't deflate your bubble too much, but they said in the last conference call that about 4 Bn would be spent getting it up and running by 2017 and then another 1Bn would be spent getting to full speed. The 5Bn in replacement costs is a new thing so I don't know what to make of that, but just throwing out that they still need 4Bn to get it rolling.
On the other hand they could use this to fund the second factory.
Delaware is actively pursuing offshore wind generation. The wave regime off Delaware isn't energetic enough to make wave energy conversion there cost-effective (at least with any tech I know about).What about power generation? Delaware is far too north for Solar to be amazing... Useful, just not amazing... Could do off shore wave power generation, maybe? But I just don't see anywhere on the east coast being a choice right now... Unless I missed something.
It'd be great to assemble evidence about the scale of Nevada's incentives relative to the scale of similar incentive packages. My off-the-cuff reaction is that this is a generous but not unprecedented package.
For example, South Carolina bid hard to get a BMW facility. This document shows that South Carolina put $115 million of incentives PLUS expansions of infrastructure and other goodies, to land a $250 - $300 million plant employing 2,000 people. There's a good story on AP recently summarizing the debate as well as the benefits of the plant.
For example, South Carolina bid hard to get a BMW facility. This document shows that South Carolina put $115 million of incentives PLUS expansions of infrastructure and other goodies, to land a $250 - $300 million plant employing 2,000 people. There's a good story on AP recently summarizing the debate as well as the benefits of the plant.
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Krugerrand
Meow
What did the other states offer, since it was clearly stated Nevada didn't have the biggest incentives? That alone should be telling a certain segment of the population that Tesla doesn't make decisions based solely on 'show me the money', but rather what's best for all. But that'll be ignored but a certain segment because it doesn't fit into their 'story'.
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
So guys who are we betying on will provide solar panels for the GF??? It will be a huge order. My money is on SPWR or JASO.
chickensevil
Active Member
RobStark
Well-Known Member
Lets not get carried away. Elon said that incentives were not the most important but speed. He said Nevada's main attribute is that it has a get things done attitude. He said Nevada is a "get things done State." And that is why he would encourage other companies looking to expand to come to Nevada.
http://www.reuters.com/article/2013/11/10/us-usa-boeing-assembly-idUSBRE9A80FB20131110
I believe that WA's $8B over 27 years was biggest. They'd already given them a $3.2B break.
But, in 2014 Boeing and its subsidiaries have 81,452 employees in WA, so that's $3,637.68 per employee-year.
Tesla's $1.25B for 20 years for 6,500 employees is $9,615.38 per employee-year.
Of course, there are lots of other indirect benefits and NV certainly would stand to gain hugely just from the success of the Gigafactory, because if batteries become cheap enough, NV's renewable energy resources would increase in value and I'd expect them to see a lot of investment.
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
Panels... Do you think SCTY's manufacturing will be able to handle that order???
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