Tesla Gigafactory

[dc_h]

What's your maths working there?
300m petrol vehicles in US approx - 1 per person.
Tesla will be making battery packs for 1370 packs per day (500,000 at max run rate / 365days).
300million / 1370 = 218,978 days to replace 300m cars. = 600 years of production to replace 300million cars.

America uses 20mbpd. 1/3 in cars supposedly (rest in aviation / heating / chemicals / shipping). So 6.66mbpd in cars/trucks/lorries.
You said "to replace 400k barrels". So that's replacing only 6%.

6% of 600 years = 36 years to replace 400k barrels.
That's my ballpark maths. What assumptions did you use?

The best way for america to reduce oil consumption is to stop driving trucks that get 10mpg.
Reduce/re-use/recycle was a 2nd world war mantra. Reduce is the quickest way to ween yourself off oil.
I always think no other industry works to make things so "inefficient" as cars. Lets compare to other modes of transport.
Shipping: containerisation for efficient storage massive ships (Brunel figured back in the 19th C that the larger the ship the more efficient it became). Propellors vs paddle-steamers. Long-sleek ships. "water-tunnel" test on propellors to get that extra 1% of efficiency.
Look at airlines: big airlines carrying 300-600 people crammed together. GM vs RollsRoyce 1-upping each other in efficiency. The Dreamliner - $10bn development to get a 15% fuel efficiency improvement.
Cars: I read once (US survery on new car features) # cup-holders ranked about 12th. 1 higher than fuel economy.
World is a bit crazy.
Fuel economy is a factor of drag which is based on rolling resistance (weight / wheel size), engine size (efficiency) car frontal area size and slipperiness (how streamlined). Neither of those 3 things are areas most people want to compromise on.

If you are really interested, read jhm thread on shorting oil to hedge tesla. The thread is now more on peak oil and relation to EV development. There is a ton of great information and jhm and neroden have some detailed math on peak oil.

 

[googlepeakoil]

If you are really interested, read jhm thread on shorting oil to hedge tesla. The thread is now more on peak oil and relation to EV development. There is a ton of great information and jhm and neroden have some detailed math on peak oil.

Message me offline maybe to answer - but not sure what a JHM thread is. Am a big believer in Peak Oil. Read several of the books. Conventional oil has peaked about 5 years ago. The current low prices are due to a massive increase in non-conventional oil. You only need to produce a few mbpd over / below world demand to massively affect prices as most oil use is price inelastic. People still need to drive to work. The world can't switch to a more efficient car / electric car at short notice. For those doubters - remember the world has to find about 8-10mbpd of new production (3/4 of a new Saudi Arabia) every year just to replace dwindling existing oil fields - let alone meet increased demand - ie. China now owning more cars than the US. Bringing it back on subject - rising oil prices is good for Tesla. Rising electricity prices is bad. I predict prices going back to $100 in the next 2 years - not falling to $10-20.

 

[googlepeakoil]

--->>70 megawatts<---, not 10 megawatts
Tesla reveals more details about ‘Gigafactory 1’: Model 3 battery pack, largest rooftop solar array in the world (70MW), & more

thanks - I stand corrected.
The largest ground mounted still dwarfs this... seems some are 500MW+
The World's 10 Biggest Solar Farms | OilPrice.com
Topaz, California. MidAmerican Solar. Capacity: 580 MW

... and some future ones are going to be 1000MW - the same as a single large coal or nuclear power station...
Al Tayer’s comment coincided with DEWA’s solicitation of bids for the largest build-out to date of the Al Maktoum Solar Park in Seih Al Dahal, at 800 MW. A 200 MW expansion, led by a Saudi contractor and using solar panels made by U.S.-based First Solar Inc., is already underway and set to be completed in 2017. The 800 MW phase III expansion is scheduled to produce first power in 2020, according to officials, pushing the park’s total generation to more than 1,000 MW.
Solar Power Invades Oil-Rich Middle East

 

[nativewolf]

It's actually sooner than that. Of the 300m cars, only a fraction are actually driven. So you can completely ignore the number of cars and focus on the number of miles driven.

It's only taken less than 3 months for the 200k global tesla vehicles to accumulate 500 million miles. At 25mpg for your average car/truck/hybrid-combined, that's 20 million gallons of gas saved, or 476,190 barrels of oil (42 gallons per barrel). Since there's ~90 days in 3 months, that's 5291 barrels per day with 200k vehicles. So we'll need at MOST 75 x 200k telsa vehicles to save 400k barrels per day. Or about 15million Teslas max. They're shooting for 500k production per year in 2018 and 1 million by 2020, so we'll hit 400k barrels per day saved well before 2035. And that doesn't even count all the coal and nat gas saved from the Tesla Energy side of battery use (since only 35GWh of the 150GWh capacity of batteries was dedicated to the model 3).

Guess I'll be "that guy" Great points but you are missing the gas- oil loss efficiency. Each barrel of oil is yielding...oh 17-22 gallons of gas. Say 19 according to the govt. So it saved over 1million barrels of oil. And the example you are making just gets stronger actually as the 3 comes out.

The other point people are missing here is that there is a new transportation paradigm emerging. Ride sharing and electric cars go together like jam and peanut butter. Almost made for one another. That's likely to have a similar reduction in driving, if I can call a car anytime without having to own one, I would. Why do I want a car? I don't. I just want to go from a to b without delay. Anyhow, you've just underestimated the impacts, that's all.

 

[Oil4AsphaultOnly]

Message me offline maybe to answer - but not sure what a JHM thread is. Am a big believer in Peak Oil. Read several of the books. Conventional oil has peaked about 5 years ago. The current low prices are due to a massive increase in non-conventional oil. You only need to produce a few mbpd over / below world demand to massively affect prices as most oil use is price inelastic. People still need to drive to work. The world can't switch to a more efficient car / electric car at short notice. For those doubters - remember the world has to find about 8-10mbpd of new production (3/4 of a new Saudi Arabia) every year just to replace dwindling existing oil fields - let alone meet increased demand - ie. China now owning more cars than the US. Bringing it back on subject - rising oil prices is good for Tesla. Rising electricity prices is bad. I predict prices going back to $100 in the next 2 years - not falling to $10-20.

There's a thread for predictions: Prediction Thread - "You Called It"

Myself and a few others predicted continued depressed oil prices until the cost of production makes it unprofitable to continue producing gasoline from it.

 

[Oil4AsphaultOnly]

Guess I'll be "that guy" Great points but you are missing the gas- oil loss efficiency. Each barrel of oil is yielding...oh 17-22 gallons of gas. Say 19 according to the govt. So it saved over 1million barrels of oil. And the example you are making just gets stronger actually as the 3 comes out.

The other point people are missing here is that there is a new transportation paradigm emerging. Ride sharing and electric cars go together like jam and peanut butter. Almost made for one another. That's likely to have a similar reduction in driving, if I can call a car anytime without having to own one, I would. Why do I want a car? I don't. I just want to go from a to b without delay. Anyhow, you've just underestimated the impacts, that's all.

Can't quite agree with you there. My point of using miles driven as a starting point was to factor away the need to account for things like ride-sharing. Regardless of whether you used the tesla for your own miles or used it in a ride-share, the commuted miles off-set results in the same reduction of oil consumed. So now, my calculations still stand, and ONLY from the tesla vehicles point.

We'll reduce consumption by 400k barrels a day well before 2035 (guessing 2025), because of all the other short-range EV's and PHEV's out there. I commute 15k miles a year on my leaf, so they do have an effect. And those who are getting a bolt will do so, because the leaf doesn't cover their mileage yielding an even greater reduction in gasoline consumed.

 

[nativewolf]

Well fair enough, I think ride sharing/car sharing accelerates the movement away from ICE as the electric self driving car is the best platform.

That said, oil consumption decrease of 1million barrels should have already taken place.

 

[Chris Fox]

If you are really interested, read jhm thread on shorting oil to hedge tesla. The thread is now more on peak oil and relation to EV development. There is a ton of great information and jhm and neroden have some detailed math on peak oil.

Link? I'd like to short oil once the timing is right

 

[Chris Fox]

What's your maths working there?
300m petrol vehicles in US approx - 1 per person.
Tesla will be making battery packs for 1370 packs per day (500,000 at max run rate / 365days).
300million / 1370 = 218,978 days to replace 300m cars. = 600 years of production to replace 300million cars.

America uses 20mbpd. 1/3 in cars supposedly (rest in aviation / heating / chemicals / shipping). So 6.66mbpd in cars/trucks/lorries.
You said "to replace 400k barrels". So that's replacing only 6%.

6% of 600 years = 36 years to replace 400k barrels.
That's my ballpark maths. What assumptions did you use?

The best way for america to reduce oil consumption is to stop driving trucks that get 10mpg.
Reduce/re-use/recycle was a 2nd world war mantra. Reduce is the quickest way to ween yourself off oil.
I always think no other industry works to make things so "inefficient" as cars. Lets compare to other modes of transport.
Shipping: containerisation for efficient storage massive ships (Brunel figured back in the 19th C that the larger the ship the more efficient it became). Propellors vs paddle-steamers. Long-sleek ships. "water-tunnel" test on propellors to get that extra 1% of efficiency.
Look at airlines: big airlines carrying 300-600 people crammed together. GM vs RollsRoyce 1-upping each other in efficiency. The Dreamliner - $10bn development to get a 15% fuel efficiency improvement.
Cars: I read once (US survery on new car features) # cup-holders ranked about 12th. 1 higher than fuel economy.
World is a bit crazy.
Fuel economy is a factor of drag which is based on rolling resistance (weight / wheel size), engine size (efficiency) car frontal area size and slipperiness (how streamlined). Neither of those 3 things are areas most people want to compromise on.

You calculations assume Tesla will stop at 500k EVs per year. That's just by 2018. By 2020 Tesla wants to be producing 1m EVs a year (See Fremont expansion) and that's just from California.

Tesla is seeking a European site for its Gigafactory 2 and China is currently changing its laws to allow Tesla to build in Gigafactory 3 without the need for a Chinese partner.

Each gigafactory will be bigger and more efficiently designed with more automation then the last. By 2025, I could see Tesla pumping out 5-10 million EVs per year including trucks and semis.

Can you redo math but instead of using 500k per year number, can you do 5million per year?

 

[SW2Fiddler]

Link? I'd like to short oil once the timing is right

Happy to be of help!

 

[wdolson]

Message me offline maybe to answer - but not sure what a JHM thread is. Am a big believer in Peak Oil. Read several of the books. Conventional oil has peaked about 5 years ago. The current low prices are due to a massive increase in non-conventional oil. You only need to produce a few mbpd over / below world demand to massively affect prices as most oil use is price inelastic. People still need to drive to work. The world can't switch to a more efficient car / electric car at short notice. For those doubters - remember the world has to find about 8-10mbpd of new production (3/4 of a new Saudi Arabia) every year just to replace dwindling existing oil fields - let alone meet increased demand - ie. China now owning more cars than the US. Bringing it back on subject - rising oil prices is good for Tesla. Rising electricity prices is bad. I predict prices going back to $100 in the next 2 years - not falling to $10-20.

"Peak Oil" is a bit of a misnomer. It should be "Peak Cheap Oil" and from context that seems to be the way you think about it. We have plenty of oil undeveloped, it's just everything still in the ground is more expensive to produce than what is already online.

I'm convinced the current low oil prices are geopolitical in nature and not supply and demand. The price of oil did not drop as the Bakken fields came online and demand relaxed as the world economy faltered, which would have happened if the price was completely controlled by supply and demand. People were perplexed that there was all this new oil on the market, but prices were remaining high.

What was coincidental with the price drop was Russia's seizing of Crimea. And the low oil prices are hammering the Russian economy, as well as Iran's. With the new US administration that is more pro-Russia I expect oil prices will be going up in the next few months.

It's going to take a while for oil to go obsolete. Elon has said it will take 100 GigaFactories to support all the car and light truck production in the world. I estimated 200, but that was before Tesla increased the plans for the GF 1, so his numbers are probably based on the current capacity of GF1. In any case building those factories is going to take $1 trillion or more, nobody is going to do that overnight. Even if the US decided to cut the DoD to the bone and go whole hog into battery production the US government couldn't support that kind of investment in a short spurt. Realistically it's going to take decades to build enough battery factories.

Meanwhile we will need to keep using oil. However, I would like to see demand drop to a point where the US doesn't really need to care about Middle East production. Ultimately it would be the hardest hit to the Russian economy if the world quit wanting their oil entirely.

 

[Chris Fox]

"Peak Oil" is a bit of a misnomer. It should be "Peak Cheap Oil" and from context that seems to be the way you think about it. We have plenty of oil undeveloped, it's just everything still in the ground is more expensive to produce than what is already online.

I'm convinced the current low oil prices are geopolitical in nature and not supply and demand. The price of oil did not drop as the Bakken fields came online and demand relaxed as the world economy faltered, which would have happened if the price was completely controlled by supply and demand. People were perplexed that there was all this new oil on the market, but prices were remaining high.

What was coincidental with the price drop was Russia's seizing of Crimea. And the low oil prices are hammering the Russian economy, as well as Iran's. With the new US administration that is more pro-Russia I expect oil prices will be going up in the next few months.

It's going to take a while for oil to go obsolete. Elon has said it will take 100 GigaFactories to support all the car and light truck production in the world. I estimated 200, but that was before Tesla increased the plans for the GF 1, so his numbers are probably based on the current capacity of GF1. In any case building those factories is going to take $1 trillion or more, nobody is going to do that overnight. Even if the US decided to cut the DoD to the bone and go whole hog into battery production the US government couldn't support that kind of investment in a short spurt. Realistically it's going to take decades to build enough battery factories.

Meanwhile we will need to keep using oil. However, I would like to see demand drop to a point where the US doesn't really need to care about Middle East production. Ultimately it would be the hardest hit to the Russian economy if the world quit wanting their oil entirely.

Why would oil go up with the easing of Russian sanctions? Sanctions drop, more supply in the market. Supply > demand, price drops

 

[wdolson]

Why would oil go up with the easing of Russian sanctions? Sanctions drop, more supply in the market. Supply > demand, price drops

Russia's economy is very oil dependent, it's their primary source of foreign exchange. The price of oil was kept artificially low by the US and Saudi Arabia in the 1980s to drive the Soviet economy to ruin. I have heard an interview with an investigative reporter who interviewed the last trade minister of the USSR who said the low price of oil was definitely a contributing factor to the demise of the USSR.

On the other side of the market, China is very dependent on foreign oil. The Saudis and the US kept the price of oil high though manipulation as well as messed with deals the Chinese had for oil outside of the main oil markets. For example China had a sweet deal with Saddam Hussein for oil when the sanctions expired in late 2003, but when Saddam Hussein was run out after the US led invasion, the contract was voided and China lost their deposit.

A lot of people were scratching their heads because the price of oil remained high for a couple of years after US production ramped up dramatically at the same time demand went down because of the soft world economy. However the price did drop right after Putin took Crimea and it's been low ever since.

The Russian economy has been crippled by the low oil prices in recent years. If Trump ends the price suppresion of oil, prices will rise to something more sustainable by Russia. If Trump really is in Putin's pocket, the US could start manipulating oil prices the other way which would put Russia in a much stronger position economically.

On the other hand the spooks might not tell Trump about the program.

Thomas Friedman wrote about it two years ago:
https://www.nytimes.com/2014/10/15/opinion/thomas-friedman-a-pump-war.html?_r=2
https://www.nytimes.com/2014/10/15/opinion/thomas-friedman-a-pump-war.html?_r=2
oilprice.com also had an article on it:
Did The Saudis And The US Collude In Dropping Oil Prices? | OilPrice.com

 

[nativewolf]

it was one of Reagan's best moves, the collaboration with SA on oil prices, but you're missing a lot of the context, it not only hurt Russia it hurt Iran. SA wanted to hurt Iran and US wanted to pressure Russia to get out of Afghanistan and open up, and SA wanted to plug up lots of poorly performing US wells (at that time most wells were in TX and non producing wells had to be plugged). Ironically Reagan hurt US oil production.

Today alternative oil in Canada is profitable at $60ish/barrel but some is cheaper. It took some years for the boom in US and Canadian production to offset the losses from Libya, Venezuela and others. Lots of places in the world produce energy and many were basket cases 2 years ago (Iraq, Venz, Libya, etc).

Today the loss of production in China itself is causing a tightening of supply. China has lots of old fields but new production is expensive, in poor fields. So, China has to import much more and that is going to support prices. Chinese production is dropping by a few % a month, huge huge loss. It has more impact than the yet to be implemented OPEC/Russia cuts. In a world awash with oil Opec Russia, Canada, Norway, UK, Brazil, Mexico, and US producers are all hoping China and Venz keep having issues. One side effect of Russia intervening in Syria is that Iraq production will increase.

Hard to guess what happens right now but it seems the market is a fun place to play. Easing Russians sanctions right now would have little effect I think, they should be bound by that Russia/Opec agreement and the decline in Chinese production might encourage a bit of cheating. We'll see if they can pull it off. If they can reduce it than US and then Canadian producers will be on that high $ oil like flies on shat.

 

[Oil4AsphaultOnly]

Today the loss of production in China itself is causing a tightening of supply. China has lots of old fields but new production is expensive, in poor fields. So, China has to import much more and that is going to support prices. Chinese production is dropping by a few % a month, huge huge loss. It has more impact than the yet to be implemented OPEC/Russia cuts. In a world awash with oil Opec Russia, Canada, Norway, UK, Brazil, Mexico, and US producers are all hoping China and Venz keep having issues. One side effect of Russia intervening in Syria is that Iraq production will increase.

Where are you getting this? The oil hedge thread acknowledges a production drop, but nowhere near a few % per month!

 

[nativewolf]

Where are you getting this? The oil hedge thread acknowledges a production drop, but nowhere near a few % per month!

Lots of discussion re Chinese production drops, it is roughly equivalent to the production increase in US shale if my memory serves, not so very different anyway. If Chinese production could have held steady we'd be awash in oil. Lots of folks writing about it nowadays, just use your friend google.

 

[nativewolf]

Actually they dropped over 11% in 2016 as well but apparently that decrease is accelerating. They have bad fields. Shale frack experts couldn't make the numbers work in china due to depths to deposits, lack of infrastructure, etc. So, China has very little alternative oil available.

This combines with most of the Chinese wind production being a bit bogus due to it being too far away from demand to be useful means that China is becoming a huge import energy hog. Interesting stuff ...might mean China & coal have a hard time parting ways.

 

[Bangor Bob]

In a world awash with oil Opec Russia, Canada, Norway, UK, Brazil, Mexico, and US producers are all hoping China and Venz keep having issues. One side effect of Russia intervening in Syria is that Iraq production will increase.

Actually, take Mexico off that list. Cantarell field production went off a cliff a few years ago. They're not far from becoming net importers, maybe 2-3 years.. Production of 2.2mbpd shrinking 200kbpd/year recently, and demand of 1.7mbpd and growing. They're already a net importer of refined product.

 

[Model 3]

...might mean China & coal have a hard time parting ways.

In latest move, China halts over 100 coal power projects

In latest move, China halts over 100 coal power projects

China's energy regulator has ordered 11 provinces to stop more than 100 coal-fired power projects, with a combined installed capacity of more than 100 gigawatts, its latest dramatic step to curb the use of fossil fuels in the world's top energy market.

In a document issued on Jan. 14, financial media group Caixin reported, the National Energy Administration (NEA) suspended the coal projects, some of which were already under construction.

The projects worth some 430 billion yuan ($62 billion) were to have been spread across provinces and autonomous regions including Xinjiang, Inner Mongolia, Shanxi, Gansu, Ningxia, Qinghai, Shaanxi and other northwestern areas.

 

[nativewolf]

Yeah the move on China stopping coal power projects is fascinating. Read the details (in other places) and you'll see they stopped 100, read that, 100 new projects, only a few of which were actually under construction. None of which are producing power. China's big. Really big. That move did nothing to impact the next 5 years of China's need for, and use of, coal. It might impact some boiler manufactures though. The world is awash in cheap natural gas and it will be interesting to see if natural gas plants are halted. If so it means that there is probably huge excess power capacity in China.

Maybe it is just me but isn't this not about the gigafactory...how did we end up here. Apologies for helping divert a great topic.