Tesla Gigafactory

[AudubonB]

Rob - while your conclusion may be correct, it doesn't mean your approach to get there is sound. Again: I am NOT disagreeing with you, but it may sound that way. I'll try once more and then move on as it's not worth belaboring:

The point of maximum profits is not necessarily at your "25% plus margins". It may - or may not - be the case that were they to lower the price by 5%, they sell 6% more vehicles. Or 20%.
If they were to lower it by 15%, they might sell 20% more. Or 40% more. Or 10% more. Clearer now? Lastly, that a car is priced at $70K or $80K or $100K is not what makes it a premium vehicle. I'm pretty sure this last statement is clear to all.

 

[RobStark]

AudobonB

Maybe I am not clear. Once Tesla has a full portfolio of vehicles it does not need to sell a bazillion Model S to maximize total profits. In many people's eyes high price does make a premium vehicle. It is a marketing issue in China that Model S is much cheaper than S-Class and A8. Tesla has gone to make its case to the Chinese public that the reason the Model S is cheaper is because they are not gauging the Chinese Public. Mercedes sells over 200k S-Class in China every year. We will see what Tesla ends up stabilizes at, but Tesla has predicted 20k Model S units per year.

Tesla does not need a cheaper Model S. Not 25% cheaper not 15% cheaper not 5% cheaper. It needs a car slotted below the Model S. For total maximum profit and the prestige of the brand. It can sell $131k cars and it should not abandoned that space. Lexus has worked years to get there and can only sell in that space in tiny tiny numbers.

Tesla needs a direct E Class 5 Series competitor not a discounted Model S.

 

[Tasdevil]

If tesla can get the price of their skateboard low then they should drop the price of their cars.
I believe the car revolution is more than just electric and more than just bypassing dealers. It's changing the pricing of cars so that you no longer compare an EV to an ice, but that gas cars can not compete against EV prices.

 

[jerry33]

Tesla needs a direct E Class 5 Series competitor not a discounted Model S.

I'd guess it will be like computers. The price remains the same but the specs increase. A 30% decrease in battery costs doesn't mean a 30% decrease in the price of the car because the car is more than just the battery. If the base 85 kWh Model S price is $80K, and 40% of that is battery, then the battery component is $32k. A 30% reduction gives $22.4k or $9.6k difference. So the tech package, twin chargers/HPWC, and parking sensors become standard equipment. Maybe they include eight years of maintenance as well. Of course, if the batteries are also lighter and/or higher capacity additional range is likely rather than changing the options. There are a lot of things they could do, but I'd be very surprised if they lower the price of the car.

 

[dsm363]

I'd guess it will be like computers. The price remains the same but the specs increase. A 30% decrease in battery costs doesn't mean a 30% decrease in the price of the car because the car is more than just the battery. If the base 85 kWh Model S price is $80K, and 40% of that is battery, then the battery component is $32k. A 30% reduction gives $22.4k or $9.6k difference. So the tech package, twin chargers/HPWC, and parking sensors become standard equipment. Maybe they include eight years of maintenance as well. Of course, if the batteries are also lighter and/or higher capacity additional range is likely rather than changing the options. There are a lot of things they could do, but I'd be very surprised if they lower the price of the car.

This is the iPhone model of pricing too.

I expect Tesla to improve the Model S interior and fancy tech features to be on par with cars in its price range. Once they accomplish that if they can manage to lower the price a few percent while still protecting 25-30% margins that would be ideal.

 

[Lump]

Texas Gov. Perry vs. California

Gov. Perry brings fight for Tesla factory to California | Politics - KCRA Home
Texas Gov. Rick Perry stalks Tesla in SacramentoLos Angeles Times

 

[Kipernicus]

Texas Gov. Perry vs. California

Gov. Perry brings fight for Tesla factory to California | Politics - KCRA Home
Texas Gov. Rick Perry stalks Tesla in SacramentoLos Angeles Times

Here's another one:
Rick Perry shows up in Tesla, jabs California on jobs - Sac Bee

The Palo Alto-based company’s Model S, Perry told reporters after pulling into the Hyatt Regency Hotel, would look good with a “Made in Texas” bumper sticker.

Perry has long boasted about recruiting businesses from California to Texas, but the rhetoric increased last year, when Perry ran a radio ad in California and Brown dismissed his effort as “barely a fart.”

 

[ecarfan]

This part of the article pretty much says it all:

"But when asked what incentives Texas was offering the company, he said, “I don’t know all of the different details about the incentive packages and what have you.”

In fact, Perry is not meeting with Tesla officials on this trip to California.

Who he was visiting with was Republican lawmakers, candidates and at least one very deep-pocketed GOP donor, Charles Munger Jr. Perry, a former presidential candidate who may run in 2016, talked briefly with Munger in the hotel lobby, before former state Sen. Jim Brulte, chairman of the California Republican Party, put his arm around Perry and walked with him to a meeting with lawmakers upstairs."

Yep, classic Rick Perry: "details" escape his notice. But campaign fund raising is front and center I his mind.

 

[lolachampcar]

We are nearing a breaking point if Perry, 999 and lipstick is all the party "of competence" can attract. The fact that there are people attracted to funding such types reinforces the fool and their money saying.

 

[Cattledog]

This part of the article pretty much says it all:

"But when asked what incentives Texas was offering the company, he said, “I don’t know all of the different details about the incentive packages and what have you.”

In fact, Perry is not meeting with Tesla officials on this trip to California.

Who he was visiting with was Republican lawmakers, candidates and at least one very deep-pocketed GOP donor, Charles Munger Jr. Perry, a former presidential candidate who may run in 2016, talked briefly with Munger in the hotel lobby, before former state Sen. Jim Brulte, chairman of the California Republican Party, put his arm around Perry and walked with him to a meeting with lawmakers upstairs."

Yep, classic Rick Perry: "details" escape his notice. But campaign fund raising is front and center I his mind.

Say what you will about him, like Jerry Brown, he's far from perfect. And like Jerry Brown, he raises money when he runs for something. However, the LAST thing I'd expect him to do is lay the Texas/San Antonio offer out on the table. Did you watch the NBA Finals postgame last night? When some reporter asked Popovich to basically reveal his game plan for beating the Heat, he looked at the guy and said, "You want me to tell you my playbook?" and just laughed at him.

You don't open your playbook to the opponents in the middle of the game.

 

[dauger]

The Economist: Assault on Batteries

A sensible article published today from The Economist on Tesla, the Gigafactory, and their potential impact:

Elon Musk’s gigafactory: Assault on batteries | The Economist

 

[GSP]

Say what you will about him, like Jerry Brown, he's far from perfect. And like Jerry Brown, he raises money when he runs for something. However, the LAST thing I'd expect him to do is lay the Texas/San Antonio offer out on the table. Did you watch the NBA Finals postgame last night? When some reporter asked Popovich to basically reveal his game plan for beating the Heat, he looked at the guy and said, "You want me to tell you my playbook?" and just laughed at him.

You don't open your playbook to the opponents in the middle of the game.

True, but saying you haven't seen or can't remember the play book makes you look like a liar or a fool.

GSP

 

[Cattledog]

True, but saying you haven't seen or can't remember the play book makes you look like a liar or a fool.

GSP

Well, he is a politician...

His is a classic evasive answer, but I'm pretty sure most politicians know the big points but not the details of a complex deal like the Gigafactory. I'm pretty sure we'd have to look a long time to find a politician that knew the details on everything they voted into law. He's trying to help out his state, as is Jerry Brown, and the governors of Arizona, New Mexico, and Nevada. Might work, might not.

 

[viperboy]

Per CNBC - Navada is official.

 

[Lump]

Tesla to choose Nevada as final site: WSJ - MarketWatch

SAN FRANCISCO (MarketWatch) -- Tesla Motors Inc. TSLA, -0.60% has chosen Nevada as the state to house its battery plant, The Wall Street Journal reported Wednesday. State officials will hold a press conference in Carson City on Thursday, the paper said. Tesla said last month it had broken ground on a site in Storey County, east of Reno, but added that it will still be looking at other sites in other states as a final location would depend on what agreements and incentives it could get from whichever state it chooses. Shares of Tesla fell 0.6%, having hit an intraday record high of $288 earlier in the session.

 

[crmatson]

Tesla to choose Nevada as final site: WSJ - MarketWatch
Tesla Motors Inc. TSLA, -0.75% has chosen Nevada as the state to house its battery plant, The Wall Street Journal reported Wednesday. State officials will hold a press conference in Carson City on Thursday, the paper said.

 

[loganthefirst]

Tesla chooses Nevada as Gigafactory site! Tesla Selects Nevada For Gigafactory

 

[magnet]

Looks like the GigaFactory may use the 22700 cylindrical cell format instead of the current 18650 format.

[FONT=Palatino Linotype, Book Antiqua, Palatino, serif]"He also plans to add one-third more energy volume per battery by using larger cylindricals, known as 22700s, according to Navigant." [/FONT]

[FONT=Palatino Linotype, Book Antiqua, Palatino, serif]Anyone have the original source from Navigant?[/FONT]

[FONT=Palatino Linotype, Book Antiqua, Palatino, serif]Very interesting they are sticking with cylindrical spiral cells since many assumed they would switch to prismatic cans or pouch cells. Metal cans are superior to pouch cells under compression for long life anyways. And with pouch cells you need expensive silicone foam in between each cell. A round metal can is also inherently stronger than a rectangular can to resist expansion. Spiral cell in cylindrical can = long life and cheap. In a race car you might stick with prismatic where safety is not as much of a concern. Tesla needs to space their cells for safety.

The sad news about the 22700 format is the rumor they were going to make solid state cells than need no spacing (solid electrolyte so no fire) and no active heat/cooling is busted. It's coming but to smartphone/watches/computers first. Solid state cells are already in wide use in EVs in France, but the family that own the tech (hint they make rolling papers and more paper for capacitors than anyone) is not truly interested in sharing the tech until the get out of their middle east investments. They like to give the appearance though. What ever happend to Kolibri energy who also had solid state cells? Oh yeah Qatar is their number one investor....

[/FONT]"Identical electrodes wound in both a cylindrical and a prismatic configuration provided different capacity fade rates. At the completion of 300 cycles with a C/2 charge and 1C discharge, the prismatic cells faded 24% and the cylindrical cells faded 16%. In the cylindrical-type cell, the fade was primarily caused by a reduction in the capacity of the cathode. The higher fade rate in the prismatic cell was attributed to lower cell stack pressure which resulted in more anode swelling during cycling."

 

[chickensevil]

Not sure where there was anything substantial on them even potentially using solid state cells. They said during the the Q2 ER that they would be upping the size of the cell by 10% diameter and 10% height which translates into them using the 22700 format. There was never any talk from Elon or JB (to my knowledge) that they would switch away from the cylindrical cells.

They have said that no major breakthroughs would be required for their cells or for cost reduction. This means that at least in the short term they would keep on doing what they were doing. Long term they might change to wherever the tech takes them, but they have said that any other batteries on the market right now (even for just testing in a lab) do not stand up to what they currently have in the lab. Their cells are superior to anyone else's technology, at least for their purposes, which is high density and low weight.

 

[EldestOyster]

Does a factory that is net zero energy, need an $8 million break on its electric rates? Is it really net zero if it generates a high demand during the day?