Welcome to Tesla Motors Club
Discuss Tesla's Model S, Model 3, Model X, Model Y, Cybertruck, Roadster and More.
Register

UK Gigafactory Inbound?

If there is no deal (refer above to NO WAY) then the UK is putting a 10% tariff on car imports so Tesla would save 10% on each car building them here. In right hand drive.

Would be great if it came to UK but I am sceptical in the short term.

The UK/EU already has a 10% tariff on imports from USA, so this is also the current position. Any future UK saving comes either from a zero tariff on imports from GigaBerlin, or a zero tariff from USA after transition.

A UK Giga Factory would cost whole wad of cash to build and run and eat into any 10% saving, so likely only becomes attractive is if there is a No Deal Brexit and the UK GigaFactory costs < shipping & Tariffs from elsewhere. But bare in mind that with a No Deal with EU would likely come a trade deal with the USA, so costs of US imports could get massively reduced making Fremont imports cheaper.

I guess the other variable is if he UK tax payer pays Tesla sufficiently to make the venture worthwhile

Whilst the UK is an important and big market fro Tesla, a GigaFacory in the UK on the scale of GigaBerlin would likely be far too big, unless the UK would also export... which then begs the question to where? Under a No Deal the EU would clearly not be attractive for exports, with a zero EU Tariff a UK Giga does not make much sense (can import from EU for free), and USA is out with their local production... so where? Right hand drive for the small Irish market might make sense.. other than that.. we are looking at long shipping times.. so why build in the UK?, a Giga elsewhere seems more logical first.

The other big issue is political stability in UK, whilst we are now out of EU and heading out of transition soon, it is not impossible that closer EU ties will be reestablished to some degree by future administrations making long term returns hard to predict without (expensive) government guarantees.
 
  • Like
Reactions: John_L
Would be great if it came to UK but I am sceptical in the short term.

The UK/EU already has a 10% tariff on imports from USA, so this is also the current position. Any future UK saving comes either from a zero tariff on imports from GigaBerlin, or a zero tariff from USA after transition.

A UK Giga Factory would cost whole wad of cash to build and run and eat into any 10% saving, so likely only becomes attractive is if there is a No Deal Brexit and the UK GigaFactory costs < shipping & Tariffs from elsewhere. But bare in mind that with a No Deal with EU would likely come a trade deal with the USA, so costs of US imports could get massively reduced making Fremont imports cheaper.

I guess the other variable is if he UK tax payer pays Tesla sufficiently to make the venture worthwhile

Whilst the UK is an important and big market fro Tesla, a GigaFacory in the UK on the scale of GigaBerlin would likely be far too big, unless the UK would also export... which then begs the question to where? Under a No Deal the EU would clearly not be attractive for exports, with a zero EU Tariff a UK Giga does not make much sense (can import from EU for free), and USA is out with their local production... so where? Right hand drive for the small Irish market might make sense.. other than that.. we are looking at long shipping times.. so why build in the UK?, a Giga elsewhere seems more logical first.

The other big issue is political stability in UK, whilst we are now out of EU and heading out of transition soon, it is not impossible that closer EU ties will be reestablished to some degree by future administrations making long term returns hard to predict without (expensive) government guarantees.
Would be great if it came to UK but I am sceptical in the short term.

The UK/EU already has a 10% tariff on imports from USA, so this is also the current position. Any future UK saving comes either from a zero tariff on imports from GigaBerlin, or a zero tariff from USA after transition.

A UK Giga Factory would cost whole wad of cash to build and run and eat into any 10% saving, so likely only becomes attractive is if there is a No Deal Brexit and the UK GigaFactory costs < shipping & Tariffs from elsewhere. But bare in mind that with a No Deal with EU would likely come a trade deal with the USA, so costs of US imports could get massively reduced making Fremont imports cheaper.

I guess the other variable is if he UK tax payer pays Tesla sufficiently to make the venture worthwhile

Whilst the UK is an important and big market fro Tesla, a GigaFacory in the UK on the scale of GigaBerlin would likely be far too big, unless the UK would also export... which then begs the question to where? Under a No Deal the EU would clearly not be attractive for exports, with a zero EU Tariff a UK Giga does not make much sense (can import from EU for free), and USA is out with their local production... so where? Right hand drive for the small Irish market might make sense.. other than that.. we are looking at long shipping times.. so why build in the UK?, a Giga elsewhere seems more logical first.

The other big issue is political stability in UK, whilst we are now out of EU and heading out of transition soon, it is not impossible that closer EU ties will be reestablished to some degree by future administrations making long term returns hard to predict without (expensive) government guarantees.

Well reasoned but let me reply!

There is currently a 10% tariff from USA and there could be a 10% tariff from EU. Giga UK would have zero tariff - that's the future UK saving.

You say on No Deal the EU then comes to a trade deal with USA. Maybe, but they have a hard time reaching a US trade deal thus far and the US won't be bullied. Naturally the EU is offering zero tariff on cars to USA because they are net exporters, but France loves the Common Agricultural Policy as it subsidises their farmers and the USA will want to export more agricultural produce to the EU in return for a deal. That's the sticking point. Chlorinated chicken etc. If the EU does a trade deal with USA, it doesn't stop UK charging 10% tariffs on cars: their deal is irrelevant to us.

I don't see us exporting from Giga UK. Boris has an 80 seat majority and is still 10% ahead in the polls even with Dominic Cummings driving to Specsavers. We have political stability. Plenty don't like it, but an 80 seat majority is a good one. Plus he will do the boundary changes. With the red wall up North falling to the Tories and the Exchequer hosing cash at projects to try and lessen the impending depression I don't see Labour winning for a while. Anyway, Governments change periodically, but companies take longer term views.

The UK buys 2.3m new cars a year. With battery improvements and price reductions Tesla could comfortably take 15-20% of this. That's 300k-400k cars. Along with making batteries that the UK needs for powerwalls and powerstations and Tesla Glass Solar roofs they could fill up a Giga in the UK without export. Let's see what battery day brings. Vehicle to grid could also be highly significant.

I would love a Gigafactory in the UK, even if the latest ones elsewhere will be Terafactories. I don't think the factories have to be massive to make them economic. Jones and Womack in "Lean Thinking" argued the opposite.

I saw Elon give an interview a few years ago (maybe a TED talk?) when he said he thought the World needed 100 Gigafactories for batteries alone. There will be one in the UK - it's just a question of how far away that time is.

I can dream...
 
  • Like
Reactions: ringi

pdk42

Active Member
Jul 17, 2019
1,359
1,500
Leamington
I remember a lot of Remainers confidently predicting Nissan would leave the UK. How did that prediction work out?
Well, Nissan are in a pretty dire position globally so it'll interesting how it pans out. They have not ruled out contraction in Sunderland, but it does seem for the moment that it's Barcelona that is getting the chop. However, it appears that dev & prodn of next gen Renault/Nissan EVs will be done in France.
 
  • Like
Reactions: AnthonyLR
Well reasoned but let me reply!

There is currently a 10% tariff from USA and there could be a 10% tariff from EU. Giga UK would have zero tariff - that's the future UK saving.

I think we are broadly in agreement - the decisive figure from Tesla's point of view is can the UK production cost be less than the tariff saving + shipping costs and thus generate additional savings/profits in the UK market

If it is not, and there is sufficient capacity elsewhere to meet UK demand then a UK Giga would not be economic. Having said that, a UK Giga could also of course increase supply and positively affect demand - and your points on solar etc are good ones.

I don't see us exporting from Giga UK. Boris has an 80 seat majority and is still 10% ahead in the polls even with Dominic Cummings driving to Specsavers. We have political stability. Plenty don't like it, but an 80 seat majority is a good one. Plus he will do the boundary changes. With the red wall up North falling to the Tories and the Exchequer hosing cash at projects to try and lessen the impending depression I don't see Labour winning for a while. Anyway, Governments change periodically, but companies take longer term views.

They say a week is a long time in politics!

Agreed that the next 4 years looks relatively stable, but as you say it is the longer term view that is more important. We currently have a government that is pulling hard in one direction and in my view is still operating in an ideological capacity rather than a rational one, i would suggest that over time it is likely that cooler heads will move UK back to more central ground, there is historical precedent for this, politics is often like a barometer that swings one way then another.

There will be one in the UK - it's just a question of how far away that time is.
Would be great if it came to UK but I am sceptical in the short term.

Agreed, its more a question of timing, I would suggest there would be other places higher up in Tesla's plans than UK.. we shall see!
 

About Us

Formed in 2006, Tesla Motors Club (TMC) was the first independent online Tesla community. Today it remains the largest and most dynamic community of Tesla enthusiasts. Learn more.

Do you value your experience at TMC? Consider becoming a Supporting Member of Tesla Motors Club. As a thank you for your contribution, you'll get nearly no ads in the Community and Groups sections. Additional perks are available depending on the level of contribution. Please visit the Account Upgrades page for more details.


SUPPORT TMC
Top