True, but Elon has spoken many times that he felt he could only do this in a tech heavy area. That they wanted to be in that sort of location because they needed those people. That's opposite of the "build it and they will come" philosophy airj1012 was advocating.
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Tesla Gigafactory Investor Thread
- Thread starter teddyg
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Greetings to all!
I am in favor of Nevada as the location for Tesla Battery Gigafactory.
Reasons:
1) Proximity to raw materials -- You don't want to pay for transportation twice, i.e. to get the raw materials and then to ship the final product.
2) Shipment costs to the assembly plant -- Similar to the explanation in 1) but from the distance point of view. Reno, NV is just 9 hours away from Fremont, CA by train. So regular shipment is available. In contrast, it takes 2-days to travel from Phoenix, AZ to Fremont, CA by train according to Google Maps. (Similarly, by car it's under 4 hours from Reno, NV and 10+ hours from Phoenix, AZ.)
3) Business climate -- Many businesses including tech companies have moved their finance units to NV for tax reasons. TSLA does not need to spend money for lobbying or to work hard on political connections to get such tax treatment. That means less distraction for the management.
4) Investor / Fan buzz -- Las Vegas, NV has annual tech fairs and is able to attract thousands of people regularly. San Francisco, CA hosts dozens of tech events per year. Getting such fan base to travel to Reno, NV would be relatively easier than to AZ or NM in my opinion. In long-term, such steady attention flow would benefit the company to maintain high publicity. As they say it in Iowa, "If you build it, they will come."
5) Housing / Talent pool -- Some of the engineers from the Fremont plant might be transferred to the Gigafactory location. Relocation costs money upfront. Some people might prefer to maintain their affinity to California. For example, Elon Musk himself might want to maintain his residence in California because of his children going to school there. So Nevada is closer, cheaper, and is in the same time zone.
Why not Arizona or New Mexico?
* The sun might shine brighter in AZ and NM. However, with energy storage capacity, solar power might not be the only reason for location choice. In fact NV being on higher altitude, it might actually provide more UV radiation, which is what you need for photovoltaic cells should they go for solar panels from SolarCity.
* Higher altitude would also mean cooler temperature, which makes energy storage/output more efficient in the long run. In fact, average summer temperatures topping 100F in AZ and NM would work against you since lithium-ion batteries perform better under 85F. In a closed facility with large roof surface area, cooling down expenses might add up meaningfully. As a result annual average variable costs in AZ and NM would be higher than in Nevada.
* The only reason why I think AZ and NM became candidates was because of their renewable energy production. They mostly have power tower designs (aka heliostats) that use concentrated sunlight from multiple mirrors and then convert energy through steam generators (with temperatures at 1,000F). However, there is a new concern that the power tower design causes high mortality of birds (see Birds Fly or Fry at Solar Energy Plant | Ivanpah Solar | LiveScience). This might backfire from animal protection activists and possibly even the government. I don't think TSLA wants to face criticism about killing birds while they preach about protecting the planet...
On the other hand, SolarCity's uses photovoltaic solar panels. So they don't necessarily depend on high solar radiation but rather high UV radiation, which is greater on higher altitude like in NV (i.e. where the air density is thinner). Therefore, AZ and NM are not necessarily top candidates.
* Marginal cost of transportation from AZ / NM might be higher than from NV due to longer railroad distance. That defeats the purpose of efficiency gains from in-house battery production.
Also, I honestly would not want my high-value components to stay in transit for too long. Even if shipment takes two days, that means there is a risk of overnight accident or something else, God forbid. It's much more comfortable when you know that the cargo has been shipped in the morning and you have it at the assembly plant same evening, which is the case for Reno, NV -> Fremont, CA.
Why not Texas?
* The only reason I could think of building a Gigafactory in TX is if there were another assembly plant nearby, e.g. in Houston, TX. However, even that would imply export driven production. The facilities in Fremont, CA are sufficient for producing 500K vehicles per year. Until that production level is saturated, I don't see any need to stretch yourself thin across the country and across time zones.
Plus, there is this risk of factory shut downs during tornadoes and hurricanes. As the climate continues changing, there will be greater volatility of weather patterns. Such fluctuations create unnecessary logistical complexities and uneven shipment patterns, which would adversely affect production patterns at the assembly plant in Fremont, CA. With high degree of automation through robotics, you don't need to store large inventory of batteries on side. Instead you want to use that space for additional assembly machinery. In other words, you want the production process to be in sync across the whole manufacturing chain. Also, a smoother production pattern would make it much easier for financial planning, cash flow management, and hedging, all of which affect profit margins.
* The assembly plant in Netherlands makes it a compelling case to build the Gigafactory near Houston, TX so that you could ship those battery packs to Europe. Then why not build a Gigafactory in Europe?..
I am in favor of Nevada as the location for Tesla Battery Gigafactory.
Reasons:
1) Proximity to raw materials -- You don't want to pay for transportation twice, i.e. to get the raw materials and then to ship the final product.
2) Shipment costs to the assembly plant -- Similar to the explanation in 1) but from the distance point of view. Reno, NV is just 9 hours away from Fremont, CA by train. So regular shipment is available. In contrast, it takes 2-days to travel from Phoenix, AZ to Fremont, CA by train according to Google Maps. (Similarly, by car it's under 4 hours from Reno, NV and 10+ hours from Phoenix, AZ.)
3) Business climate -- Many businesses including tech companies have moved their finance units to NV for tax reasons. TSLA does not need to spend money for lobbying or to work hard on political connections to get such tax treatment. That means less distraction for the management.
4) Investor / Fan buzz -- Las Vegas, NV has annual tech fairs and is able to attract thousands of people regularly. San Francisco, CA hosts dozens of tech events per year. Getting such fan base to travel to Reno, NV would be relatively easier than to AZ or NM in my opinion. In long-term, such steady attention flow would benefit the company to maintain high publicity. As they say it in Iowa, "If you build it, they will come."
5) Housing / Talent pool -- Some of the engineers from the Fremont plant might be transferred to the Gigafactory location. Relocation costs money upfront. Some people might prefer to maintain their affinity to California. For example, Elon Musk himself might want to maintain his residence in California because of his children going to school there. So Nevada is closer, cheaper, and is in the same time zone.
Why not Arizona or New Mexico?
* The sun might shine brighter in AZ and NM. However, with energy storage capacity, solar power might not be the only reason for location choice. In fact NV being on higher altitude, it might actually provide more UV radiation, which is what you need for photovoltaic cells should they go for solar panels from SolarCity.
* Higher altitude would also mean cooler temperature, which makes energy storage/output more efficient in the long run. In fact, average summer temperatures topping 100F in AZ and NM would work against you since lithium-ion batteries perform better under 85F. In a closed facility with large roof surface area, cooling down expenses might add up meaningfully. As a result annual average variable costs in AZ and NM would be higher than in Nevada.
* The only reason why I think AZ and NM became candidates was because of their renewable energy production. They mostly have power tower designs (aka heliostats) that use concentrated sunlight from multiple mirrors and then convert energy through steam generators (with temperatures at 1,000F). However, there is a new concern that the power tower design causes high mortality of birds (see Birds Fly or Fry at Solar Energy Plant | Ivanpah Solar | LiveScience). This might backfire from animal protection activists and possibly even the government. I don't think TSLA wants to face criticism about killing birds while they preach about protecting the planet...
On the other hand, SolarCity's uses photovoltaic solar panels. So they don't necessarily depend on high solar radiation but rather high UV radiation, which is greater on higher altitude like in NV (i.e. where the air density is thinner). Therefore, AZ and NM are not necessarily top candidates.
* Marginal cost of transportation from AZ / NM might be higher than from NV due to longer railroad distance. That defeats the purpose of efficiency gains from in-house battery production.
Also, I honestly would not want my high-value components to stay in transit for too long. Even if shipment takes two days, that means there is a risk of overnight accident or something else, God forbid. It's much more comfortable when you know that the cargo has been shipped in the morning and you have it at the assembly plant same evening, which is the case for Reno, NV -> Fremont, CA.
Why not Texas?
* The only reason I could think of building a Gigafactory in TX is if there were another assembly plant nearby, e.g. in Houston, TX. However, even that would imply export driven production. The facilities in Fremont, CA are sufficient for producing 500K vehicles per year. Until that production level is saturated, I don't see any need to stretch yourself thin across the country and across time zones.
Plus, there is this risk of factory shut downs during tornadoes and hurricanes. As the climate continues changing, there will be greater volatility of weather patterns. Such fluctuations create unnecessary logistical complexities and uneven shipment patterns, which would adversely affect production patterns at the assembly plant in Fremont, CA. With high degree of automation through robotics, you don't need to store large inventory of batteries on side. Instead you want to use that space for additional assembly machinery. In other words, you want the production process to be in sync across the whole manufacturing chain. Also, a smoother production pattern would make it much easier for financial planning, cash flow management, and hedging, all of which affect profit margins.
* The assembly plant in Netherlands makes it a compelling case to build the Gigafactory near Houston, TX so that you could ship those battery packs to Europe. Then why not build a Gigafactory in Europe?..
Two things to consider:
A) Battery costs are dropping by about 8% a year. In three years that is about a 26% drop, so the 30% gigafactory savings is pretty conservative in my opinion.
B) The gigafactory will also be importing 15GWh of batteries from Japan and Korea to be placed into packs. It makes little sense to ship them across the ocean and put them onto a train for Texas only to be sent back in packs to Fremont. Nevada is the clear choice given the proximity to all of the Tesla based operations and distance needed to transport asian batteries to the facility by train.
A) Battery costs are dropping by about 8% a year. In three years that is about a 26% drop, so the 30% gigafactory savings is pretty conservative in my opinion.
B) The gigafactory will also be importing 15GWh of batteries from Japan and Korea to be placed into packs. It makes little sense to ship them across the ocean and put them onto a train for Texas only to be sent back in packs to Fremont. Nevada is the clear choice given the proximity to all of the Tesla based operations and distance needed to transport asian batteries to the facility by train.
Everyone wants Tesla to come to their town
Elon is a big fan of co-locating R&D engineering with production. Short ways and direct feedback are vital to the breakneck speed of innovation that keep Tesla ahead of the competition.
Tesla battery factory huge influence on Renewables
Elon Musk just announced details of Tesla's plan to start pumping out lithium ion batteries like M&Ms at its planned "Gigafactory."
Obviously, it's big news for electric vehicles as this should bring down the cost of a very expensive component.
But it has equal and possibly greater significance for renewable energy.
We've explained that power storage is the key to unlocking widespread renewable energy. For renewables to be truly cost competitive with existing power sources, they need to be able to provide a continuous current flow, something difficult to achieve when the wind isn't blowing or sun isn't shining.
Which is why he's hailing Tesla's decision.
"If those prices comes down, our market expands, we can offer a lower priced product and put more storage in our system," he told us. "So this is very important."
Solar execs are comparing the current environment to where photovoltaic costs were in the last decade, just before their prices plummeted.
"At that point in time solar modules were very expensive, and the industry was pushing a couple of different alternatives: thin films were going to be photovoltaic of the future," said Tony Clifford, CEO of Standard Solar. His company also worked on the Maryland project.
But thanks to worldwide government incentives, he said, the price of traditional silicon ended up falling through the floor, paving the way for the current renewables boom.
In this case, of course, the marketplace is creating the demand for lithium ion batteries. But renewables will again be the beneficiaries.
"You're going to be able to drive costs out right across supply chain and see some significant cost reductions in storage technology."
A report from the Rocky Mountain Institute released prior to Tesla's announcement (spotted by GreenTechMedia) was even more extreme about the possibilities for cheaper storage.
"Whereas other technologies, including solar PV and other distributed resources without storage, net metering, and energy efficiency still require some degree of grid dependence, solar-plus-batteries enable customers to cut the cord to their utility entirely," they write. "The coming grid parity of solar-plus-battery systems in the foreseeable future, among other factors, signals the eventual demise of traditional utility business models," the authors wrote.
Tesla's announcement represents a major step towards a larger, cheaper energy storage market that could have huge implications for making renewables more widespread.
Elon Musk just announced details of Tesla's plan to start pumping out lithium ion batteries like M&Ms at its planned "Gigafactory."
Obviously, it's big news for electric vehicles as this should bring down the cost of a very expensive component.
But it has equal and possibly greater significance for renewable energy.
We've explained that power storage is the key to unlocking widespread renewable energy. For renewables to be truly cost competitive with existing power sources, they need to be able to provide a continuous current flow, something difficult to achieve when the wind isn't blowing or sun isn't shining.
Which is why he's hailing Tesla's decision.
"If those prices comes down, our market expands, we can offer a lower priced product and put more storage in our system," he told us. "So this is very important."
Solar execs are comparing the current environment to where photovoltaic costs were in the last decade, just before their prices plummeted.
"At that point in time solar modules were very expensive, and the industry was pushing a couple of different alternatives: thin films were going to be photovoltaic of the future," said Tony Clifford, CEO of Standard Solar. His company also worked on the Maryland project.
But thanks to worldwide government incentives, he said, the price of traditional silicon ended up falling through the floor, paving the way for the current renewables boom.
In this case, of course, the marketplace is creating the demand for lithium ion batteries. But renewables will again be the beneficiaries.
"You're going to be able to drive costs out right across supply chain and see some significant cost reductions in storage technology."
A report from the Rocky Mountain Institute released prior to Tesla's announcement (spotted by GreenTechMedia) was even more extreme about the possibilities for cheaper storage.
"Whereas other technologies, including solar PV and other distributed resources without storage, net metering, and energy efficiency still require some degree of grid dependence, solar-plus-batteries enable customers to cut the cord to their utility entirely," they write. "The coming grid parity of solar-plus-battery systems in the foreseeable future, among other factors, signals the eventual demise of traditional utility business models," the authors wrote.
Tesla's announcement represents a major step towards a larger, cheaper energy storage market that could have huge implications for making renewables more widespread.
Link to the RMI study mentioned by Robertj. Elon is going to be a major disruptor in yet another industry, electric generation, transmission, and distribution.
The Economics of Grid Defection
GSP
The Economics of Grid Defection
GSP
Having headquarters in a large city is MUCH different than having a factory in a large city. Again space is the issue. If you're mentioning Fremont, that was a steal, and the property was not being used. I don't think there is an empty factory the size they're looking for that is just sitting idle right now. They're looking to build. Plus they still will need access to the natural resources.
Rifleman
Now owns 2 Model S's!!!
Its a good thing most people do not boycott entire states due to their politics, otherwise I would not be buying a Tesla, as I do not approve of California's strict gun laws.
My theory is if you dont agree with someones politics, you have ever right to boycott them (for example, I dont buy anything from companies that give money to anti-gun organizations, if I can help it), but blanket boycotts of entire states dont really help matters much, as the target is too broad to get your point across.
Well, the factory is going to be HUGE, its wind and solar demands would be huge and they'd want to ship the output to Fremont. Given all that, they'd surely want to locate it in West Texas, Mexican border or panhandle depending on which area gives the best overall total generation capacity of wind and solar, right?
Yeah, I'll admit at the outset to having a bit - but only a bit! - of chauvinism toward my new....part of the year....home state. That full disclosure aside, as I've enumerated elsewhere, one eyebrow-lifting reason Arizona has possibilities is that the monstrous (but not big enough!!!!!) plant Intel just completed in Chandler....they have mothballed. It might be possible for Tesla to pull another NUMMI there. Remember, Apple/GTAT just - four months ago - did the same, getting for a song the enormous* new plant that had been First Solar's
*"enormous" is synonymous with "picayune" in gigafactory-speak
I'm also a bit more favorably disposed toward solar electricity than wind, for a number of reasons.
Regardless, in the big picture I'll be delighted to learn of this project going ahead irrespective of location. All for a great cause.
*"enormous" is synonymous with "picayune" in gigafactory-speak
I'm also a bit more favorably disposed toward solar electricity than wind, for a number of reasons.
Regardless, in the big picture I'll be delighted to learn of this project going ahead irrespective of location. All for a great cause.
I don't like wind energy either because it kills birds, including bald eagles, it is noisy, and a bigger eyesore than solar.
Solar is much better than wind.
In west Texas though you have solar in the day and tons of wind at night.
I can understand complaining about strobing or noise, but personally I think wind turbines are beautiful. Definitely prettier than a water tower.
I was reading something that there's also good solar thermal potential in West Texas, and solar thermal can help to balance wind quite well.
Norse
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