The Next Gigafactory

[jhm]

Let's devote this thread to discussing the Next Gigafactory.

• Where will it be?
• What will it produce?
• How much will it produce?
• What national markets will it serve?
• What parties are involve?
• How will it be financed?
• What will be impact on local economy in jobs created and impact on other industries?
• What are various governments doing to attract and accommodate Tesla?
• What new technologies and processes will Tesla deploy to optimize the next Gigafactory?
• Etc.

Let's please focus on gathering information rather than arguing about opinions, uncertainties and ambiguities.

 

[jhm]

Tesla is looking at Germany for a new Gigafactory

Germany and Shanghai are both in the running for the Next Gigafactory. Which one will start production first?

Given that Tesla had to fly a production line from Grohmann in Germany to Gigafactory 1 in Sparks, NV, does that suggest some advantage for a GF in Germany? It seems that engineers at Grohmann would have much better access to a GF Germany than any other GF. Engineering cycle time could be very important at this early stage.

On the other hand, the market in Asia is much bigger for Tesla, and we have known about this longer.

Logistically, GF Germany has really good access to all of Europe and even East Coast North America. Fremont has good access to Western North America and Asia. So as an intermediate step before GF Shaghai can crank out exports beyond the Chinese domestic market, it could make sense to roll out GF Germany, particularly if this can be done very quickly.

In my mind, advantage goes to Germany. Could it be that Tesla will pit the governments in Germany and China in a contest for which country can accommodate Tesla appetite for rapid development and fair trade?

 

[J X 3]

Germany feels so socially unjust, it's hard to find a country that needs it less.

 

[TheTalkingMule]

Philadelphia.....obviously. We have a wonderful site right on the Delaware River, just need the refinery to go busto(again).

 

[TheTalkingMule]

Germany feels so socially unjust, it's hard to find a country that needs it less.

None of this solar/battery revolution is happening without Germany efforts since 2000. They put the entire global solar renaissance on a credit card and deserve from us a solid.......state battery factory!

 

[neroden]

If located near the French border, that would put it in Rhineland-Palatinate, Saarland, or Baden-Wurttenberg. Politically speaking I'd want to go with Baden-Wurttemberg, which has a Green Party government.

 

[jhm]

What seems to be motivating this location near French border?

 

[J X 3]

What seems to be motivating this location near French border?

Tesla’s Grohmann Engineering division is in Prum, 30km from Belgium and 100km from France.
Prum is just 5.5k ppl so they likely want to go a bit south to Trier or Kaiserslautern or even Karlsruhe I would assume.
Maybe access to the Rhine–Main–Danube canal is a factor too.

 

[jhm]

Tesla’s Grohmann Engineering division is in Prum, 30km from Belgium and 100km from France.
Prum is just 5.5k ppl so they likely want to go a bit south to Trier or Kaiserslautern or even Karlsruhe I would assume.
Maybe access to the Rhine–Main–Danube canal is a factor too.

Ah, that makes sense. It seems to confirm my hunch that proximity to Grohmann is a factor.

I suppose this could also create jobs for French, German, Belgian and other workers. Seems this could garner broad political support.

 

[J X 3]

Ah, that makes sense. It seems to confirm my hunch that proximity to Grohmann is a factor.

I suppose this could also create jobs for French, German, Belgian and other workers. Seems this could garner broad political support.

Considering where Tesla is, they should focus on the location with the most financial upside, doubt that's Germany but we'll see.
Musk mentioning Germany could also be a negotiation tactic, trying to get other nations to bid more.

Something else that is related, Tesla recently commissioned a study that looks at their impact on Cali's economy and it's likely that they did it to be able to get a better deal for future locations by showing them the upside Just how much is Tesla worth to the Bay Area and California?


Edit: Some almost facts.
Tesla stated that they'll make both cars and batteries. Ofc they don't make cells and Panasonic is unlikely to be replaced. What is unclear is how much CAPEX is Panasonic willing to spend. Gigafactory 1 was very costly for Tesla Capex wise.
Musk stated that there is no room for Model Y in Fremont and it seems they won't make it there. In theory they could shift some M3 prod elsewhere and do MY in Fremont but that's not the most efficient way.

This is pure speculation but wondering if expanding Giga1 wouldn't be the cheapest way to start Model Y.

 

[sweter]

Musk stated that there is no room for Model Y in Fremont and it seems they won't make it there. In theory they could shift some M3 prod elsewhere and do MY in Fremont but that's not the most efficient way.

This is pure speculation but wondering if expanding Giga1 wouldn't be the cheapest way to start Model Y.

I know Model Y line is suppose to be closer to Alien Dreadnought, but with GF in Europe and China hopefully launching around ~2020, maybe both M3 and MY production can be spread around the world and combined like MS and MX is? Or have 1 line per model?

I would definitely feel more safer for future of Tesla if production was more distributed, just like Humanity is gonna be with Mars

 

[IdaX]

I would definitely feel more safer for future of Tesla if production was more distributed, just like Humanity is gonna be with Mars

GF3 in Utopia Planitia!

 

[jhm]

I don't know if MY and M3 will have different lines. It may be simpler to just develop a new line for MY and ramp up. After that, they can play around with the added complexity of a line that can switch between the two models. But as both models could have very serious production volume, there might not be a whole lot of value in a line that can switch.

In any case, they will have to make room for MY in Fremont. I think this means getting solid production of M3 in two other continents so that Fremont can dial back M3 production to only what is needed for the Americas. (Yes, I'm hoping we see expansion into South America soon.)

It'll be interesting to see how Tesla ramps up MY. Will it all happen in Fremont first before pushing out to the other GFs? Or will the ramp be nearly parallel in multiple GFs. I could envision the Californian, German and Chinese teams competing with each other to ramp up fast. Not sure where Elon would lay his head.

 

[J X 3]

MY is supposed to be more evolved and likely easier to manufacture by design. They might update M3 to be able to use the same line but doesn't seem all that wise to chase too many rabbits at once.
Musk made it clear that there is no room at Fremont for MY and not quite sure where it will be made.
Moving M3 prod is money wasted to some degree, assuming they move the actual hardware.
Not ramping MY close to home would be rather scary, they've made a mess with MX and M3 and at least all their resources were available to fix those messes. If they ramp on another continent and things go wrong....
As I said, I think they should consider Giga 1 to ramp MY (and when that's sorted, they could duplicated in EU and China)
Considering where their new general assembly line is, is nobody wondering how exactly do they even get to 10k M3 in Fremont?

This reminded me about TSMC. They have their many fabs in Taiwan and when they need to solve issues or ramp a new node, because of the proximity , they can quickly move engineering teams around to sort things out. Semi manufacturing is pretty much the most advanced manufacturing the world has and TSMC is very good at ramping (huge) volumes with this strategy.

Granted, Tesla could focus on Grohmann Engineering , get those guys to sort out the production lines ahead of high volume manufacturing and then ship them anywhere. And then maybe the Germany location should be prioritized to be able able to give Grohmann Engineering a larger home.

 

[Lesifass]

Logistically, GF Germany has really good access to all of Europe and even East Coast North America.

That seems dangerous, as Trump might slap a 20% (30%?) tariff on cars made in the EU. Might be less of an issue if the EU GF is not planned to go into production before 2121.

 

[TheTalkingMule]

That seems dangerous, as Trump might slap a 20% (30%?) tariff on cars made in the EU. Might be less of an issue if the EU GF is not planned to go into production before 2121.

A non-US Gigafactory won't be sending vehicles to the US anyway.

I'd love to see an existing eu car company acquisition as part of the Tesla EU vehicle plan. Nothing tsla makes now or has planned is all that EU appropriate.

 

[electracity]

The model Y is going to be built in Fremont. Or a perhaps there is a small chance in will be build in Sparks.

2020 begins in 18 months and ends in 30 months. Tesla doesn't seem to have any other possible factory locations that could be built in that time frame.

I though everyone thought that the next gigafactory will be in China. I assume they will announce a deal with some kind of Chinese financing or partnership.

 

[jhm]

That seems dangerous, as Trump might slap a 20% (30%?) tariff on cars made in the EU. Might be less of an issue if the EU GF is not planned to go into production before 2121.

Agreed. I was more thinking about North America as a continent than just the US. If tariffs interfere, then EU product can supply Canada, Mexico, Greenland, and the Caribbean. I acknowledge that this involves some expansion of Tesla's foot print, but ultimately the Model 3 and Model Y will enable Tesla to develop a much wider footprint. South America is a huge opportunity including some of the fastest growing auto markets on the planet.

So if the present Administration screws up global trade, I think Tesla still has many options to work around that. Indeed, I think it is very prudent to develop German and Chinese GFs just to mitigate the risk of Trump destroying trade relations. The very worst scenario would be where a trade war results in the US Gigafactories are unable to export anything without encountering prohibitively high tariffs. That's the stupidity of Trump's trade tactics, that it risks undermining manufacturing growth within the US because there is uncertainty about fair access to export markets. The irony of imposing tariffs to address a trade deficit is that it can imperil exports and usher in even deeper trade deficits.

I do think that the risk of 6 more years of Trump factors in to urgency around developing GFs in other parts of the world. This could be a real windfall for Europe in terms of attracting GF investment.

 

[jhm]

A non-US Gigafactory won't be sending vehicles to the US anyway.

Why? US protectionism aside, I thought the shipping cost from Europe to eastern US sea ports was less than the cost from California to East Coast. Is this not correct?

 

[SageBrush]

From afar, Poland appears to be the Mexico of North America. Or perhaps the old (East) Germany. Places where labor is cheaper but relatively highly skilled.