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Comment by honkhonkpants | Hacker News Reader

Tesla consumes a small fraction of global lithium-ion battery production. When the overall market is much larger than the marginal consumption, the assumption that offering more money increases local supply holds perfectly well. Even if you assume that Tesla is demanding 5% of the battery market which would be an outside estimate that's still well within the region where paying more will get you more.

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Worldwide production of lithium-ion batteries in 2013 was around 35GWh. The current rate is somewhat higher, I can't quite find how much.

Tesla is currently producing around 100,000 cars/year. Each car has about 80kWh of battery on average (the options right now are 75 or 90), so that's about 8GWh. If they meet their goal of 400,000 Model 3s produced in 2018, assuming 55kWh of battery for those cars, that's 22GWh, not counting what goes into continuing Model S and Model X production. I'm not sure it's as small a fraction of global production as you say.

One of the statistics they like to quote about their Gigafactory is that its final production will equal the total global production by the industry when construction started in 2013.

I had to do some calculation on the numbers. Gigafactory promise roughly 150GWh when in goes full online. I was wonder how could a SINGLE electric car company consumes so much batteries? More then Phones?

It turns out even with 2Billion Phones at 5Wh, a conservative estimate, we are only at 10GWh. Billion Phones!, 10GWh!, 5 times more then the World Capacity in 2013 from 1 Factory!

All these numbers and scales are so mind bogglingly huge that i fail to comprehend.

It's pretty cool how much different the scale is with electric cars versus the sorts of batteries we're used to.

I frequently see people discussing range impacts based on a complete misunderstanding of the magnitudes involved. They'll ask about how much range you'd expect to lose from running a dashcam or charging a phone, or recommend turning off headlights to conserve energy.

And of course I can't blame them at all. We're used to battery-powered devices where things like screen brightness are critical to battery life.

But then you run the numbers, and realize that a fully-charged Tesla could run the headlights for over a month before draining the battery, or that it could charge an iPhone 20,000 times....

JB Straubel just mentioned at the annual Tesla shareholder meeting they're now expecting to produce 150GW of storage capacity a year at the Gigafactory, split between vehicles and energy storage based on demand for both.

Just for clarification, Tesla's initial estimates for Gigafactory production was 35GW/year at the cell level and 50GW/year at the pack level (with some cells produced by other suppliers). At the shareholder meeting they speculated they could 3x those numbers with the current Gigafactory. This is at full production, which is years away.

GWh right?

That analysis is sort of ridiculous. On the numerator you're using a number much higher than the number of cars Tesla has ever produced in a year. On the denominator you're using a years-old size of a rapidly growing market for batteries.

How do you think that decisions are made under uncertainty? You can't always wait until you have very solid numbers to come up with an analysis. It's not "ridiculous" to come up with an order of magnitude estimate when better information is unavailable, it's a critical step in solving new problems.

A more productive criticism would have been to offer an improvement, rather than to just point to the imperfections in an attempt to estimate the future impact of a new technology.

edit: added second paragraph

OK, but in 2016 we don't have to guess how many cars Tesla built in 2015. It's historical fact.

What is it? You could actually improve the estimate rather than /just/ pointing out that it has flaws. And your original criticism was vague. At least this one moves things forward.

After a quick Google search, the number of vehicles Tesla sold in 2015 does in fact seem to be a bit uncertain. It seems they sold over 50,000 vehicles, but I've not found a more precise number, in a few minutes of looking.

Sales from previous years seem to be:

2012 - 2,650

2013 - 22,477

2014 - 31,655

2015- ~50,000

though I got these numbers from a quora post, so take them with an adequately large dose of salt.

edit: added google findings, tweaked wording to be more specific

There is no reason to guess at these numbers OR to Google for other people's guesses. The sales figures to 5 significant digits are in Tesla's 10-K report. For example:

During 2015, we achieved significant efficiencies in Model S production and produced 14,037 vehicles in the fourth quarter of 2015. We began production of Model X in the third quarter of 2015. We plan to deliver 80,000 to 90,000 new Model S and Model X vehicles in 2016.

So... we're about where we were at with the very first estimate...

Precision isn't particularly helpful for this sort of rough projection. Which highlights that your original criticism wasn't particularly productive.

clarification: In claiming that we're about where we started, I'm saying that a 10-20% correction doesn't significantly impact a rough order of magnitude estimation. The estimate was in the precision bounds of its stated goal. Therefore the estimate wasn't "ridiculous" at all, or at least, you haven't shown that it was.

That's not why I thought it was ridiculous. I said it was ridiculous for using projected 2016 Tesla production and dividing that by actual 2013 battery production, when battery production is rapidly expanding. You either have to use 2016 projected battery production on the denominator, or actual 2013 Tesla production (a number very close to zero) on the numerator.

You've been criticizing the rough order of magnitude estimate for an hour and still haven't offered a significant improvement. I find that more more ridiculous. If the improvement is so obvious that not including it is ridiculous, then why not just produce the improvement you're talking about?

Note: This is rough, back of the envelope projection meant to improve on a 5% figure that someone pulled out of the air.

I think you're confused. _I_ am the one who said 5% and I think it's a reasonable working number. mikeash then replied, saying that Tesla will consume 22GWh (2018) and the battery market is only 35GWh/year (2013), implying that Tesla's share is so large it violates normal rules of market liquidity. Then I objected to that implication.

I don't think 5% is right. You seemed to think that 30% year-over-year growth in the industry was a reasonable estimate. If it was 35GWh/year in 2013 then that puts it at about 77GWh today and 130GWh in 2018. That puts Tesla at around 10% of total production now, and 23% in 2018.

I can't figure out which part of this you object to. You seem to accept all the numbers, but continue to argue about the shape of the box they're presented in.

I'll spot you 10%, but I think that's still within the realm of linear market behavior. I really don't agree with the original idea (now far upthread) that it required a visionary to lay the path for making all of Tesla's batteries. There are numerous firms around the world totally dedicated to market forecasts for major industries like batteries, car parts, and raw materials.

That's fine, I just objected to the "small fraction" bit, not the rest.

> I think you're confused.

How delightfully condescending of you. Yes, I didn't realize that the 5% number came from you, that hardly makes me "confused". Taking that into light, it's not obvious to me how a very rough back of the envelop projection is significantly more ridiculous than a number pulled out of thin air. My whole problem is that you called it ridiculous when it was clearly meant to be a rough order of magnitude projection. You can't really criticize a number pulled out of the air, because it goes without any attempt at justification. But a back of the envelop calculation can be improved in a piece-wise fashion to hone in on a better result. So any attempt to model a phenomenon (as long as it doesn't come with unjustified claims of precision and certainty) is an improvement over a number pulled out of the air. But that process is short circuited when people just dismiss the projection out of hand as you did. This is why I appealed for an improvement in my first comment. It's really easy to shit on someone else's effort, but it is completely unproductive. If you see a problem, then fix it. Then you're adding to the conversation, rather than just shitting on a little bit of effort someone put out there.

I wouldn't have taken the "I think you're confused" to be condescending. I mean I wouldn't interpret it as condescending and I don't think it was meant in that way.

How much do you think the industry has grown since 2013? How much do you think it will grow by 2018? Even if each one is a doubling, Tesla's part is pretty significant.

It's tough to get hard data but a 20-30% CAGR from 2013 to the present time seems like a reasonable guess.

Sounds reasonable to me as well. I won't claim to have great numbers, just trying to compare the rough magnitudes.

> Worldwide production of lithium-ion batteries in 2013 was around 35GWh

I don't think measuring it in terms of GWh is the best way to go about it, because a huge number of lithium ion batteries manufactured are NOT the type Tesla needs to use. Their battery packs are composed of 18650 size cylindrical cells.

Vast amounts of LiIon batteries manufactured today are pouch/flat type cells for laptops, tablets, mobile phones and other portable consumer electronics.

I would be very curious to see a number of the total estimated quantity of high-capacity 18650 cells manufactured worldwide in one year vs. the number of 18650 cells consumed by Tesla.

This ties neatly into another common economic fallacy: That capital is homogenous. Highly productive capital equipment is specialized, and requires long lead times for its production. It cannot quickly be repurposed for other uses. Thus, it's important that demand is genuine and not the result of "stimulus" that will waste a lot of capital equipment when stimulus is withdrawn.

That's why you use stimulus to fill in short periods of slack up to the baseline economic capacity, but not on top. In other words, why you apply stimulus counter-cyclically. It's a good point about stimulus spending within a particular part of the economy, though.

Tesla hasn't sold 100,000 cars in their entire history. Last year they did sell 50,000 cars. Think they'll double that this year?

http://www.fool.com/investing/general/2015/11/18/how-many-ve...

They've sold well over 100,000 cars. The current total is around 140,000. They project 80,000 or 90,000 this year, with a slow start, so I think their current rate is 100,000 if not higher.

Do their sales in the first 5 months of 2016 somehow not count?

I was looking at the wrong data. At any rate, the point is that Tesla is trying to ramp up production very fast. Going from 50,000 to 100,000 cars sounds difficult in 12 months, while maintaining quality.

Going from 2,700 to 22,000 in 12 months sounds difficult too, as does going from 22,000 to 32,000 and from 32,000 to 50,000.

Unless they have spent the past couple of years planning and preparing to up their capacity..

How small a fraction? Tesla is expected to produce between 80,000 and 90,000 Model S and X this year. With 80 Kwh battery pack on average (my guess), Tesla currently consumes 6.4 Gwh of Lithium-ion battery.

Back in 2013, the global production was estimated to be 35 Gwh (cf. Gigafactory announcement presentation).

How much has it grown in the past 3 years?

Eyeballing the chart in the article, and assuming kWh/car to have remained constant: by a factor of about 6.

The article also mentions 70% growth in the last year. Assuming equal growth in the other years, It would be about a factor of 5.

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