tftf
Member
I see no point in filling a plant with machinery that you won't need for a few years.
I guess it depends on the ramp-up speed for the Gen III beyond initial deposits, the EV car market and infrastructure may be more mature by 2017-2018.
Analyst estimates are all over the map from 100k to 500k vehicles/year for the Gen III (my personal low-end estimate is 100k/year, below that it probably doesn't make sense to call the Gen III a "mass-market vehicle" and sell it at the promised price range of $30-40k base price).
So if TSLA sells 50-100k in year one, but plans 125-175k in year two and 200-250k in year three it might make sense to directly invest in a 250k battery supply.
Also depends if TSLA continues to source Model S and X batteries from third-parties (Panasonic, Samsung, LG...) or will do all in-house once the factory is ready. Even if switching to one internal source is cheaper it might make sense to keep the external suppliers for the "older" car models to mitigate supply chain risk.
As we have seen with Mitsubishi (battery testing recall/delay of PHEV Outlander, delay in international sales of 1-2 years) and Nissan (slow ramp-up in U.S. LEAF battery factory took over 6 months in 2013, only resolved by January 2014) battery delays and production issues are hard to solve in short time frames.
In the case of TSLA Gen III we are also talking much bigger numbers than existing plants from competitors (probably over two billion cells per year if they stay with 18650 cells).
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