Tesla Gigafactory Investor Thread

[Citizen-T]

Thought:

Elon says that factory will provide packs for the stationary storage need that the solar industry has. He also says that Tesla will consume all the production capacity of the plant. These two statements seem incompatible until you also consider that he said that the factory will have recycling capability built in to it.

I'm guessing this means that Tesla will consume all newly produced battery packs for its cars. Spent packs will be returned to the factory for refurbishment and be repurposed as stationary storage for SolarCity.

 

[tftf]

Thought:

Elon says that factory will provide packs for the stationary storage need that the solar industry has. He also says that Tesla will consume all the production capacity of the plant. These two statements seem incompatible until you also consider that he said that the factory will have recycling capability built in to it.
I'm guessing this means that Tesla will consume all newly produced battery packs for its cars. Spent packs will be returned to the factory for refurbishment and be repurposed as stationary storage for SolarCity.

Nissan is already doing this in Japan with spent LEAF batteries:

The spiritual among us will view Sumitomo and Nissan's installation of its first-ever used-electric-vehicle-battery storage as a bit of divine reincarnation. But the idea is quite logical and practical. The two companies formed the 4R Energy Corporation in late 2010 and have now installed what they call the world's first "large-scale power storage system" using exclusively used batteries from battery-electric vehicles in Osaka, Japan.

Used Nissan Leaf batteries support solar energy system in Japan

So it's certainly a reasonable scenario.

 

[chickensevil]

I haven't changed my mind. I'm just waiting for more news on the battery factory for the time being (construction timeline, partners, location, investment size, a new legal entity or part of TSLA etc.)

Good luck, now seems like the worst time in the world to have any real short positions in the company. I hope you have been only "cautiously" short up until this point...

 

[DJ Frustration]

Anyone have any thoughts about this thread post Q4 earnings?

 

[EV2BFREE]

Elon mentioned that the gigafactory will be using wind+solar. We can assume the obvious solar partner will be Solar City but are there any ideas for a wind partner?

 

[justdoit]

I doubt they'll use wind. I think he said the factory will be using renewables like wind and solar. The way I read that was that he's just giving wind and solar as examples of renewables and not necessarily saying the factory will be using both. It just doesn't make sense why Elon would want to use wind when he's such a proponent of solar. Also, since this will be a large factory there should be a ton of roof space for solar panels.

 

[tander]

That would induce an interest revisit of the dealership laws in that exchange - just too much irony for the mind that they couldn't sell them there.
*Order in-line, buy in CA, build in TX, ship it across the border and import from Mexico. Might prove an interesting 'State' of affairs

Robert is spot on. On top what he mentioned, putting it in Texas (and presumably creating a lot of jobs) could go a long way into solidly breaking into the Texas market (which is the largest auto market in the U.S.). The combination of Texas's business friendliness, Tesla's need to crack that market, and it's location as one of the sunnier states makes a lot of sense.

 

[Discoducky]

It would be brilliant to see a factory powered by solar by day and wind by night where raw materials or expelled batteries for recycling arrive by train or barge and new completed packs going out by the hundred thousands weekly. Can't wait for the details...hopefully next week.

 

[TD1]

skip to : 14:30

Maybe Elon is putting Panasonic, Sanyo and Samsung in a headsup to compete for the gigafactory and thats why he couldnt confirm that panasonic is one of the partners.
JB Straubel | Energy@Stanford SLAC 2013 - YouTube


In the same lecture he said that Tesla need 3.5billion cells / year for 700k cars to build.
The whole car industry sells 100 million cars/year.
That means in a full EV world we would need a production capacity of around 500 billion cells/year :scared:.
That would be an increase by 14000% more then battery production compared to the whole world battery production of 2012.

We would need 139 additional GigaBatteryfactories, or some really big GigaFactories.
And according to his slides, tesla wants to sell 700k car per year by 2019, so by that time they would already hit the limit again and would need a second Gigafactory.

Exciting times.

 

[tftf]

Maybe Elon is putting Panasonic, Sanyo and Samsung in a headsup to compete for the gigafactory and thats why he couldnt confirm that panasonic is one of the partners.
JB Straubel | Energy@Stanford SLAC 2013 - YouTube

In the same lecture he said that Tesla need 3.5billion cells / year for 700k cars to build.
The whole car industry sells 100 million cars/year.

A few notes on this: Sanyo is now fully owned by Panasonic. I guess the most likely partners beyond Panasonic/Sanyo could be LG Chem and Samsung. (There are only few other players in the EV battery space with the necessary size beyond these two and they are already smaller: GS Yuasa, Hitachi, BYD, A123 and NEC-Nissan.... However most of them don't do cylindrical cells).

As for the cell count, Tesla might switch to larger cylindrical cells (28650 instead of 18650), so I usually look at the GWh. The video you linked is indeed interesting and the numbers staggering:

10 million long-range EVs will require about 600 GWh in battery capacity (!). It's not just the raw materials and time to build these plants. The $ investments needed are gigantic over many years.

I kept pounding on these numbers for many months because many people seem to be underestimating the time needed to change personal transportation to EVs - even in a best-case scenario for EVs.

Finally, about the 100 million cars/year. This is a rough estimate for 2020 by industry sources. At the moment, "only" 65 million passengers cars are produced: Production Statistics | OICA

 

[TD1]

I think you are right that increasing the EV production to 10million is a huge challenge. At the same time it increases the barriers to entry for other car manufacturers without their own battery plant.
Although at the same time Tesla will be able to deliver 700k cars to the market with their own plant, but 700k/year is not where Tesla wants to stop.
So I think Elon has already an Idea for a 2nd gen Gigafactory or an massiv expansion plan for a Gigafactory.
They could just put the Factory in an area where a lot of land is available and leave enough space to add more Factory lines in the future (2019).
It takes 18 Months to build a new production line from scratch, so that wont be the problem.

My guess is that the will build the the facilities for 39GW capacity but in the first year they will only setup a production line for 11GW and add year after year.
That will be healthier for the cashflow.

Ultimately there are still challenges but I think a lot of people on this board just trust in Elon and his team that he will or already has a good internal roadmap for the Battery factories.

 

[WS6_Mac]

It makes logical sense that Tesla will put the giga factory beside the GEN III production line. Logically speaking it should be close to Fremont.

 

[Krugerrand]

Logically speaking it should be close to Fremont.

That's not logical as a) there is no land near Fremont of the quantity required for a factory of the size Elon Musk is talking, and b) if there was a hunk of land there, it would be too expensive, and c) California is too expensive in most every other regard concerning building a business of that size.

 

[WS6_Mac]

That's not logical as a) there is no land near Fremont of the quantity required for a factory of the size Elon Musk is talking, and b) if there was a hunk of land there, it would be too expensive, and c) California is too expensive in most every other regard concerning building a business of that size.

Close meaning Arizona or Nevada.

 

[LakeForest]

So... The shareholder letter says this(emphais mine) "Very shortly, we will be ready to share more information about the Tesla Gigafactory. This will allow us to achieve a
major reduction in the cost of our battery packs and accelerate the pace of battery innovation. Working in partnership
with our suppliers, we plan to integrate precursor material, cell, module and pack production into one facility. With this
facility, we feel highly confident of being able to create a compelling and affordable electric car in approximately three
years. This will also allow us to address the solar power industry’s need for a massive volume of stationary battery
packs."
From JB's talk at Stanford, these are the elements that go into a pack, w/ NiCoAlOH labeled as precursor.So, the question is who makes the "Precursor" that is likely one of the other partners. The cell manufacture is Panasonic.

 

[Krugerrand]

Close meaning Arizona or Nevada.

Ah, okay. That is logical. :smile:

 

[tftf]

Is there a specific date for the factory announcements? I just saw "next week" (which would be this week now).

 

[Norse]

Is there a specific date for the factory announcements? I just saw "next week" (which would be this week now).

Hopefully we will get that info during the SCTY ER.

 

[Benz]

Interesting post by angstrom in another thread:

"The numbers don't matter right now. They haven't since early last year. At this point it's all about driving the cost of the battery packs down. The fastest way to accomplish that is using Solar PV which has the option to use the 30% ITC on the solar storage.

Tesla may crank out 40K cars this year, but that will be dwarfed by the stationary storage units. The story at Tesla since 2012 has been that they are supply constrained, not demand constrained. I expect we'll find out that the storage project has been growing in tandem with the Model S and now the former is about to eclipse the latter in production needs.

At the same time SolarCity will announce Q4 GAAP profit with projected continuous profits going forward. This will drive up the value of both companies. SolarCity will acknowledge income from the solar storage pilot projects and savings from acquiring ZEP along with Paramount Solar's backlog of customers and existing customers.

SolarCity fronts the capital to purchase stationary storage packs from Tesla matching SolarCity's growth. TSLA and SCTY both jump more than 50% followed by additional stock offerings which will be used to cover the cost of the Gigga Factory.

This symbiotic relationship drives the cost of the packs down 10 years faster than just building cars would. ITC goes away right around the time Tesla would be pushing the Gen 3 through volume ramp."

 

[Cattledog]

Hopefully we will get that info during the SCTY ER.

I personally doubt this. I think we might get a hint in this conference much like we did for TSLA and then have a press conference specifically for the gigafactory later in the week. If it's as important as we all think, we don't want it to get mired in the details of an earnings call.