Tesla Gigafactory Investor Thread

[surfside]

i thought this thread was going to be about how to invest in TSLA taking into account the gigafactory they need to build. this is the thing that scares me most about this ER -- that elon is going to announce the details about the gigafactory and the market isn't going to like how much it is going to cost (e.g. capex, dilution, etc).

anyone else worried about this?

surfside

 

[bonaire]

He said that they were looking to do the giga factory with a partner, not entirely on Tesla's dime. Plus, any foreign firm building a factory larger than they have ever built before, on American soil, will cost them a huge figure. They need a large pledge of funds to do it. What you might see is Elon requesting the investor community to let him sell a few million shares of his in order to pay into the factory and take personal risk. That would be looked at as one reason to liquidate some without undue market turbulence. It would be a form of dilution, though. In effect, it would use TSLA investor money to pay for the giga factory. The risk would be put onto shareholders. I doubt Panasonic would build the giga factory without this much investment. If this is viable, would you support that move?

 

[nleggatt]

Call me crazy but I wonder if the gig factory is just a threat. At the conference call they talked about how they didn't have enough batteries etc. Then someone asks about them building there own, then a few weeks later... Look Panasonic has reopened a factory and signs a deal with tesla...

Can you imagine being Panasonic when tesla says, fine we will just build our own factory that is capable of producing all the batteries we and every other auto company needs.

I've read a few other places where elon did this, "fine we will just build it ourselves" and cut the middle guy.

 

[DaveT]

Since Elon mentioned the giga factory being US based and solar powered, Western Lithium (WLCDF) could be an interesting opportunity for Tesla to source raw lithium in three to four years (close logistically and WLCDF predicts it will be able to mine lithium cheaper than its competitors). Does anyone have input on this idea or other investment possibilities?

Thanks for posting this. I've also been thinking of possible investment plays related to the gigafactory.

Does anybody know the process to make a lithium-ion 18650 battery cell? More specifically, what parts of the battery does the factory (ie., Panasonic) make themselves out of raw materials and what parts of the battery are made by other companies? I guess what I'm getting it is will Tesla's gigafactory source all the raw materials and make the complete battery 100% themselves? Or will they rely on some other companies to provide/manufacture certain parts/pieces of the battery because they require additional expertise?

 

[Krugerrand]

Call me crazy...

Okay, you're crazy. It's not a threat or a bluff. Tesla, per Elon Musk, will be building a Giga Factory with partnerS.

 

[nleggatt]

Okay, you're crazy. It's not a threat or a bluff. Tesla, per Elon Musk, will be building a Giga Factory with partnerS.

Lol. Thanks.

 

[Krugerrand]

Lol. Thanks.

No problem. We all have moments of, um...confusion, now and again. :wink:

 

[ItsNotAboutTheMoney]

Call me crazy but I wonder if the gig factory is just a threat. At the conference call they talked about how they didn't have enough batteries etc. Then someone asks about them building there own, then a few weeks later... Look Panasonic has reopened a factory and signs a deal with tesla...

Can you imagine being Panasonic when tesla says, fine we will just build our own factory that is capable of producing all the batteries we and every other auto company needs.

I've read a few other places where elon did this, "fine we will just build it ourselves" and cut the middle guy.

No bluff. The giga-factory concept is real and is an attempt to minimize the cost of battery construction by consolidating processes in a single, large site powered by solar power. Elon Musk has just said solar, not solar PV, and since I understand that the manufacture is energy intensive, I'd expect solar thermal in a hot, sunny desert could really help lower cost.

 

[Hogfighter]

No bluff. The giga-factory concept is real and is an attempt to minimize the cost of battery construction by consolidating processes in a single, large site powered by solar power. Elon Musk has just said solar, not solar PV, and since I understand that the manufacture is energy intensive, I'd expect solar thermal in a hot, sunny desert could really help lower cost.

TSLA has to build the giga factory. They've got to control their biggest expense, and have more control over production. It will be in the US, with lots of sunlight. I'm thinking Arizona.

 

[Robert.Boston]

No bluff. The giga-factory concept is real and is an attempt to minimize the cost of battery construction by consolidating processes in a single, large site powered by solar power. Elon Musk has just said solar, not solar PV, and since I understand that the manufacture is energy intensive, I'd expect solar thermal in a hot, sunny desert could really help lower cost.

No factory is going to be solar-powered anytime soon. It's certainly possible (but expensive) to build a solar array that generates as much power as the plant uses over the course of the year, but the plant will need to operate regardless of whether there's enough sunlight at the moment. Building giant battery storage would be possible, but the economics of that are extremely dubious (even for a plant that is making its own batteries).

Dynegy is planning a large wave farm near San Luis Obispo, which would provide much more stable power, day and night. Perhaps Tesla would like to contract with Dynegy? (<--self serving idea)

 

[TD1]

If they build the factory in the middle of no where and a solar thermal plant next to it, that can be sized as required, there will be almost no limit of the size or the amount of Solar Thermal plants that can be build to.
SolarCity could do the the job and offer very good prices for that.
The roof of the factory will be PV, Thermal mirrors on the roof aren't feasible afaik.
For the argument of no constant energy supply with solar solutions, I think its ok to use a small amount of Batteries (worn out Tesla batteries or Redox Flow Batteries) the grid as a backup support, and increase the capacity of the BackupBatteries as soon as it becomes feasible.

 

[eepic]

Thanks for posting this. I've also been thinking of possible investment plays related to the gigafactory.

Does anybody know the process to make a lithium-ion 18650 battery cell? More specifically, what parts of the battery does the factory (ie., Panasonic) make themselves out of raw materials and what parts of the battery are made by other companies? I guess what I'm getting it is will Tesla's gigafactory source all the raw materials and make the complete battery 100% themselves? Or will they rely on some other companies to provide/manufacture certain parts/pieces of the battery because they require additional expertise?

I'm sure there's plenty of tried and true patents and techniques that comes with experience Panasonic (Sanyo) has developed over the years. It makes sense they would build the gigafactory in partnership with Panasonic, among others.

As to the solar power, here's a thought. Recall that the factory will also be a place to deal with undesired batteries that have degraded too low in charge to be useful for cars. Prior to recycling them for raw materials, they can be used as part of the energy storage buffer for the plant itself until it reaches some undesirable threshold of degradation, say 15% of original charge, then recycled into a new pack. Would be a great way to make use of a currently unused stage in the lifecycle of the battery.

 

[Dutchie]

How can they built a factory in the middle-of-nowhere? They need personnel to run the factory, there needs to be roads. Best is , of course, to built the factory not too from Freemont.

 

[ItsNotAboutTheMoney]

No factory is going to be solar-powered anytime soon. It's certainly possible (but expensive) to build a solar array that generates as much power as the plant uses over the course of the year, but the plant will need to operate regardless of whether there's enough sunlight at the moment. Building giant battery storage would be possible, but the economics of that are extremely dubious (even for a plant that is making its own batteries).

Dynegy is planning a large wave farm near San Luis Obispo, which would provide much more stable power, day and night. Perhaps Tesla would like to contract with Dynegy? (<--self serving idea)

On energy storage, maybe the inclusion of battery recycling would be important. Let's say that:
- you sell electric cars, which have batteries that will degrade over 8 to 10 years, at which point the owner may wish to replace them, even though they still have usable life, before they'll need to be recycled.
- you have designed energy storage devices using your batteries
- you have designed battery swapping facilities, where the battery can be stored in racks, charged and removed using a fully-automated system
- new batteries need to be tested
- there's cheap land available in US deserts which are hot and sunny
- your battery manufacturing is energy intensive
- the metals in the batteries would be useful for manufacturing new batteries
- your company hires very smart engineers

I'm just thinking out loud...

- - - Updated - - -

How can they built a factory in the middle-of-nowhere? They need personnel to run the factory, there needs to be roads. Best is , of course, to built the factory not too from Freemont.

Nowhere also has edges. The Fremont factory is right next to rail facilities. The extra land Tesla bought was purchased from Union Pacific.

So, Tesla wants:
- cheap
- hot
- sunny
- close to railway lines

 

[AudubonB]

Well then, hey there!
60 acres of Land right next to our winter home has
*all the sun Arizona can afford
*BNSF RR running right through it
*no ind'l restrictions (it's out-of-town, in county only)
*is for sale

Of course, as much as I love our P85 and my TSLA shares, am not sure I want a monster factory as a neighbor... but I think I can find a certain exception....

 

[CaptainKirk]

I personally can't wait for it to happen. It would get rid of the 6% import duty for Canada since the batteries are such a large portion of the total cost of the vehicle. I'm sure their sales here north of the border would also see a bit of a spike in that case. Likely in time for Gen III.

 

[TD1]

does anyone know from where Tesla is importing the current Batteries?
China, Japan, Thailand?
And if they pay any import tax on that.
If so, they could now get around the transportation cost and the import tax for the batteries.
That alone would drive batterie cost down significantly.

 

[CaptainKirk]

does anyone know from where Tesla is importing the current Batteries?
China, Japan, Thailand?
And if they pay any import tax on that.
If so, they could now get around the transportation cost and the import tax for the batteries.
That alone would drive batterie cost down significantly.

It appears it would be Japan.

http://chargedevs.com/newswire/ev-sales-surge-puts-panasonic-battery-division-back-in-the-black/

 

[Krugerrand]

I personally can't wait for it to happen. It would get rid of the 6% import duty for Canada since the batteries are such a large portion of the total cost of the vehicle. I'm sure their sales here north of the border would also see a bit of a spike in that case. Likely in time for Gen III.

I had not thought of that. Great point! (BTW, loved you in your last commercial.)

 

[Seattle]

I have mixed feelings about them committing to a big battery factory. It will be an enormous capital outflow and possibly a distraction. They should have multiple suppliers of the battery, even if one of them is their own, to have some safety and resiliency. I want to say the best use of their resources is development of the new models (along with new os releases with new features for existing model s customers ).

But they need to be sure to have a cheaper battery system ready when the E is ready. Maybe a joint venture with panasonic? The problem with P doing it is why - they might be giving up some intellectual property to Tesla in a joint venture, but they'd get a guaranteed purchaser of batteries. It would be nice for Tesla to share the financial load. And they are a smaller company, so it would be a big distraction to develop deep battery knowledge over all the other things. Don't forget no other vendors use the same battery format, so this factory would be focused only on tesla probably.

I predict a joint venture with someone who knows about batteries and can share the cost. Not in the middle of a desert in Arizona because you need to get employees there. A high energy cost product might make sense for an isolated but cheap power plan (say for aluminum). Did you know BMW makes their carbon fiber for the i3 in Moses Lake WA, where power is much cheaper. I didn't think that batteries cost a lot of energy to produce (just chemicals, materials, safety equip, etc).