Tesla Gigafactory Investor Thread

[FluxCap]

Thank you Techmaven and FluxCap for the Panasonic information!

Let's look at some numbers to put the significance of building the second phase of the Panasonic Suminoe plant in perspective.

Firstly, this addition of the second phase at the Suminoe plant which has capacity of 300M cells is clearly on top of the existing 1.8B cells 4-year agreement. This agreement is roughly for 450M cells per year (this is approximation, as I am neglecting the ramp-up and just divide 1.8B cells by 4-year term of the agreement). Based on the profile of the Suminoe plant (Panasonic's New Lithium-Ion Battery Plant to Start Mass Production Next Month | Headquarters News | Panasonic Global), the full capacity of the first phase of this plant is 300M cells/year. That leaves additional 150M cells/year for the additional line(s) at the another plant in Osaka prefecture (Kaizuka plant).

Assuming 7104 cells for 85kWh battery and 5014 cells for 60kW battery, as well as 80/20% split between production of 85kWh/60kWh MS yields an average of 6686 cells per car. So 450M cells/year that is included in the current agreement is enough to produce approximately 67,300 Model S and X per year. Addition of the 300M cell/year capacity of the second phase at the Suminoe plant can cover additional 44,870 MS/MX per year.

The total 67,300 + 44,870 = 112,170 roughly coincides with the total capacity of the two production lines at the Tesla Fremont factory which I estimate at 56,500 cars each (Building out a real high volume next generation production line for the Model S and X)

My take-away from the above:

1. Addition of the phase two to the Suminoe plant with the 300M cells/year production is very significant 167% expansion of the current 1.8B cells/year agreement. I expect a formal announcement either at the ER call, or as a separate press release before the ER.
2. It is clear that TM internally plan for a maximum combined MS/MX production of about 113,000 per year, perhaps by the 2016. At an overall net margin of 15% and ASP of $105K this yields EBIT of $1.78B as early as 2016.

You're welcome, and thanks for follow-up analysis vgrin! This data and our analysis, though premature, seems to corroborate my expectations nicely. Good luck to all trading and as always, be careful.

 

[chickensevil]

No, I'm not, because the article is from March 25th, 2010.

See for yourself: http://panasonic.co.jp/corp/news/official.data/data.dir/en100325-3/en100325-3.html

Volume was expected to spike for the second half of 2014, though. At least based on the last information Tesla provided. So I would still expect to see a major leap happen starting in Q3.

 

[Benz]

Volume was expected to spike for the second half of 2014, though. At least based on the last information Tesla provided. So I would still expect to see a major leap happen starting in Q3.

Yes, we have been told that there will be battery cell supply in higher quantity in the second half of 2014 (most likely in Q3 2014). But we don't have any battery cell supply numbers to calculate/draw a projection/expectation.

 

[Benz]

I don't know but this sure doesn't look like a company scaling back on one of its best business divisions, batteries for Teslas.

Via techmaven, from audio on the earnings call happening right now:

* They expect to invest about $146 USD million ($10-15billion yen) in automotive batteries in FY16.

* They had already announced they will supply 2billion cells for Tesla Motors alone from 2014 through 2017 for Model S/X, so that's about 275,000 Model S/X cars we think.

* Expanding and completing their Sumino battery plant in 2015 for at least 600million cells annually.

* Talking about automotive segment "The major driver behind profit and sales this year has been Tesla"

* They talk about Tesla’s projections and that as Tesla’s sales increase, Panasonic's sales and profit increase, which means they make operational profit on the Tesla batteries today and they lose money on PC batteries


Now you tell me if that isn't a company that will commit significantly to the Gigafactory, just as Elon said they would.

About: * Expanding and completing their Sumino battery plant in 2015 for at least 600million cells annually.

Where did you get that figure of "at least 600million cells annually" from?

It's a very interesting/promising number though.

 

[HenryF]

Tesla Plans at Least Two Battery as Musk Emphasizes Speed - Bloomberg

 

[ggies07]

I was thinking, for Texas, what about the Ft. Worth area? There is a ton of open space by the Alliance Airport.....I would think that's close enough for people around Ft. Worth, Keller, Southlake, Euless, Colleyville, HEB area to live and drive out there to work. North Texas would be just a little closer than way down in the Austin area.

 

[JRP3]

The primary drivers at this point is likely cost then longevity with higher C-rates as opposed to energy density.

Higher energy density reduces the need for higher C rates, along with providing greater range. A larger pack can put out more power at the same C rate. I'd say cost and energy density are the prime drivers from here on out.

 

[techmaven]

Higher energy density reduces the need for higher C rates, along with providing greater range. A larger pack can put out more power at the same C rate. I'd say cost and energy density are the prime drivers from here on out.

While that's true in abstract, the issue is how. Without a concrete basic chemistry improvement, we might get some additive or packaging or some other advances that likely to improve cycle life longevity or better tolerance to higher C-rates, but it unlikely to increase specific energy. I think significant specific energy improvements to the NCA cells would have to be telegraphed well in advance of Tesla's usage of such improvements in their cars.

 

[Cosmacelf]

As I thought, the real reason why California isn't in the running is environmental over-regulation.

 

[kenliles]

While that's true in abstract, the issue is how. Without a concrete basic chemistry improvement, we might get some additive or packaging or some other advances that likely to improve cycle life longevity or better tolerance to higher C-rates, but it unlikely to increase specific energy. I think significant specific energy improvements to the NCA cells would have to be telegraphed well in advance of Tesla's usage of such improvements in their cars.

I think that's true. But we are 3 years away and given Elon's propensity for time collapse it's a possibility. Especially for a closely held sister chemistry. Something like the Li-Air work at IBM or some other manifestation Elon has exposure to via SpaceX. I doubt anything as radical as super capacitors. But some new chemistry that's already well tested is possible

 

[techmaven]

I think that's true. But we are 3 years away and given Elon's propensity for time collapse it's a possibility. Especially for a closely held sister chemistry. Something like the Li-Air work at IBM or some other manifestation Elon has exposure to via SpaceX. I doubt anything as radical as super capacitors. But some new chemistry that's already well tested is possible

I'm actually good with no change in the chemistry at all. A slight improvement in the C-rate tolerance or cycle lifespan would be great, but with zero improvement to the specific energy, Tesla still has the best performing BEV battery pack on the market for quite a while. I don't see NCM catching it yet. The key is pricing. The lower the cost per kWh, the more likely Tesla can make mass market BEVs. At $200/kWh, Tesla makes the Model S and already is straining the availability of cylindrical cells of the right chemistry. As the price of the battery pack approaches the cost of existing drivetrain components like the engine + transmission, the closer to price parity Tesla gets at the lower price points. So somewhere around $150 per kWh for the entire battery (including cells, structure, thermal management, labor, etc.) then Gen 3 is possible with zero chemistry improvements.

I do wonder at some point if it makes sense to revisit the ultra capacitor issue and use that as part of the AWD Model S/X drivetrain if Tesla cannot increase the specific energy of the pack. It wasn't worth it the existing Performance 85 with only rear wheel drive train because it is likely traction limited.

 

[JRP3]

There may be ways to increase density of existing chemistry through structural changes in the cells, by using nano materials for example. As with C rates, cycle life is already good enough, and as with C rates, increased energy density and lowered costs, leading to larger packs, mitigates the need for increased cycle life. In my view lower costs and larger packs will help sell more cars, longer cycle life and higher C rates will not. Or, to put it another way, Gen3 needs cheaper, lighter cells, not higher C rates and better cycle life.

 

[kenliles]

I do wonder at some point if it makes sense to revisit the ultra capacitor issue and use that as part of the AWD Model S/X drivetrain if Tesla cannot increase the specific energy of the pack. It wasn't worth it the existing Performance 85 with only rear wheel drive train because it is likely traction limited.

I've had similar thoughts- that technology has such a profound potential; Given Elon's work in that area, though, I've no doubt he's all over it's development and has some back-pocket stake in it for when it's ready

There may be ways to increase density of existing chemistry through structural changes in the cells, by using nano materials for example. As with C rates, cycle life is already good enough, and as with C rates, increased energy density and lowered costs, leading to larger packs, mitigates the need for increased cycle life. In my view lower costs and larger packs will help sell more cars, longer cycle life and higher C rates will not. Or, to put it another way, Gen3 needs cheaper, lighter cells, not higher C rates and better cycle life.

that's my thinking too JRP3- and from all the anecdotal comments from EM- that's in line with what they will do. The nano materials are really coming into an excercisable space; good thoughts

 

[TSLAopt]

Tesla Plans at Least Two Battery as Musk Emphasizes Speed - Bloomberg

we all all seem to be assuming two sites, but notice this quote from Elon in the interview:

“What we’re going to do is move forward with more than one state, at least two, all the way to breaking ground, just in case there’s last-minute issues,”

It could be 3 or 4 even, probably not, but this is a possibility we should all keep in mind in our evaluation.

 

[futureproof]

we all all seem to be assuming two sites, but notice this quote from Elon in the interview:

“What we’re going to do is move forward with more than one state, at least two, all the way to breaking ground, just in case there’s last-minute issues,”

It could be 3 or 4 even, probably not, but this is a possibility we should all keep in mind in our evaluation.

im thinking this is all about negotiation... I think some states might have thought Nevada had it in the bag with the permit applications, etc... So they might have started to write off their chances... However Elon is saying no, keep pushing on your offer, give us some expedited permitting and other things and we'll follow through on breaking ground. Hopefully this negotiation tactic will end up getting the best deal for Tesla.

 

[30seconds]

Since tesla wants /needs multiple gigafactories in the long run there is also the benefit of having the second site selected, planned and maybe graded.

 

[RobStark]

ABC News from New Mexico

 

[Cattledog]

ABC News from New Mexico

Our local paper had a front page article in the Sunday paper identifying San Antonio and Reno as the front-runners. It looks like San Antonio has made a big commitment and structured a package for $800M. With a strong engineering, manufacturing, and transportation infrastructure, green utility, wide labor pool, and possible location for Tesla's second North American factory (pick-up truck heaven), it's a good choice.

S.A., Reno leaders for Tesla battery factory - San Antonio Express-News

 

[uselesslogin]

Our local paper had a front page article in the Sunday paper identifying San Antonio and Reno as the front-runners. It looks like San Antonio has made a big commitment and structured a package for $800M. With a strong engineering, manufacturing, and transportation infrastructure, green utility, wide labor pool, and possible location for Tesla's second North American factory (pick-up truck heaven), it's a good choice.

S.A., Reno leaders for Tesla battery factory - San Antonio Express-News

I feel like Tesla chose S.A. on the condition that Texas allows direct sales. The next regular Texas Legislature session doesn't start until January so that is why they are starting in two states. If Texas doesn't give them direct sales they will proceed with Reno.

 

[kenliles]

I feel like Tesla chose S.A. on the condition that Texas allows direct sales. The next regular Texas Legislature session doesn't start until January so that is why they are starting in two states. If Texas doesn't give them direct sales they will proceed with Reno.

Or proceed with Reno regardless and stager a second in SA if the law is changed