Tesla Gigafactory [pdf] | Hacker News Reader

Tesla Gigafactory [pdf]

teslamotors.com

149 pointsyurylifshits53 comments

Tesla Gigafactory will cost $4-5B (of which Tesla will invest $2B) and exceed 2013 global battery production, enough for 500,000 cars, 30% less than current costs due to third generation technology.

That is 12x growth in 72 months.

The Gigafactory is named after the gigawatt or 1,000,000 kW because it will be producing multiple GWs of cells and battery packs.

An annual production of 500,000 automobiles will put Tesla squarely in the #1 spot for luxury production 3x more than Mercedes.

If you look at global auto sales[0] Tesla will be one of the largest, read top 5, auto manufacturers in the USA depending on how you slice the pie between domestic and international sales.

[0] http://wap.wsj.com/mdc/public/page/2_3022-autosales.html#aut...

Only a portion of those will be Model S. I suspect that most will be Model E.

Particularly excited about the cost reduction of batteries. They remain a barrier to having more affordable electric cars, and 30% goes a long way in putting more EVs on the road.

By the time batteries become mainstream, the subsidies for EVs will probably disappear as well.

I suspect they'll still have some sort of "not a gas guzzler or CO2 producer" subsidy, though it'd likely be very mild.

If you don't have solar panels on your roof, chances are it's still coming from fossil fuels. Generation/transmission efficiency for taking energy from fossil fuels and getting it to your house is around 30%. Electric cars are part of a solution to CO2 emissions, but they aren't one on their own.

I was under the impression that coal plants, et cetera, were quite a bit higher efficiency than ICEs?

And I'm sure we'll continue to bulk up non-CO2 methods of power generation. Hydro power is commonplace, solar panels are a growth area, and likewise wind turbines...

(Lastly, since I live in BC, my power is 86% hydroelectric already, but I'm speaking generally. :) http://www.energybc.ca/map/bcenergymap.html)

Hmm, wikipedia says ICEs in cars are up to 25-30% efficient. Then there's additional losses from the rest of the car. But the electric car has its own losses from the battery charge/discharge and the motors and whatnot, so it seems like they're at least roughly in the same ballpark. Electric cars certainly have more room for improvement though, since fossil fuels aren't the only way to run the electric grid.

That's when it flips to become a tax on non-EVs.

I anticipate that Tesla will enter the grid battery intertie business, possibly even buying off peak electricity and selling it during high demand.

Interesting concept, I'd never think of anyone to do such a thing, and I suppose Tesla is the only one poised to do so.

An annual production of 500,000 automobiles will put Tesla squarely in the #1 spot for luxury production 3x more than Mercedes.

Mercedes-Benz produced 1.49 million vehicles in 2013 and BMW produced 1.8 million in 2012 worldwide.

If you look at global auto sales[0] Tesla will be one of the largest, read top 5, auto manufacturers in the USA depending on how you slice the pie between domestic and international sales.

That would be far more impressive if there weren't only 3 major US car manufacturers (Chrysler, Ford & GM). In fact, Tesla must be the #4 largest US automaker right now.

I believe the key term of the parent comment you're replying to in your first statement is "luxury production". While Mercedes and BMW both produce a large number of luxury vehicles, they also produce a large number of non-luxury vehicles such as trucks, buses, vans, motorcycles (BMW only) and even garbage trucks.

For global auto sales from US manufacturers, I'm guessing that companies like Paccar and Oshkosh are keeping Tesla out of the top five currently. They make trucks and commercial vehicles so people tend to overlook them when it comes to comparing auto manufacturers.

Still, I do agree with the underlying message of your post. It's not like there are a ton of US auto companies left.

Even still, Tesla's plan isn't to become a luxury car company- they've been clear from the beginning that they've started with luxury as a way to bootstrap development. I'm guessing that the 500k cars a year that they're looking for is also going to include those new "standard" models.

I doubt that they plan on 500,000 luxury sales. If so that would pretty much mean abandoning any pretense of having a mass market electric car.

I would hope that they think they will put this towards a sub 40k car, or better yet below 30k which is where many of the smaller electrics are now.

Still a large factor like opens the possibility of packs not certified for cars being given other uses. Put in Texas and reap the power of the wind to power the factory too!

That's an exciting document, particularly the part about creating manufacturing jobs that have a realistic potential of product exportation. I wonder if TSLA threw Texas into the mix as incentive to repeal their Tesla ban.

Re: http://www.teslamotors.com/advocacy_texas

I have a sneaking suspicion that it's going to be difficult for anyone in the U.S. to garner enough lithium to go full scale. Anyone know if Bolivia has sorted out their intentions for its epic lithium reserves? Perhaps, Mr. Musk has a friend or two there.

Edit (answering my own question): http://www.globalpost.com/dispatch/news/regions/americas/bol...

Edit 2 (more on the same.. more recent and relevant article): http://seekingalpha.com/article/1971851-tesla-motors-and-bol...

> Anyone know if Bolivia has sorted out their intentions for its epic lithium reserves?

Last I heard, they were planning to completely destroy the Uyuni Salt Flats to mine it for Lithium, which would be a horrible, horrible shame. It's spectacularly beautiful, and I was lucky enough to drive across it in my own Jeep a few years back[1,2]

Also, once you've spent some time in the Silver mine at Potosi[3], it becomes horribly clear how bad it really is there. It drove me to tears. The tldr; is that miners work in horrible conditions for a few dollars a day and have a life expectancy of ~35. The silver is sold to the Bolivian government for a fraction of the world market price. The Bolivian government sells it to the Peruvian government for a 10x mark-up, which is still a fraction of the world market price. The Peruvian government sells it to the US government for a 10x mark-up, which is still way below the world market price. The miners die very poor.

[1] http://theroadchoseme.com/the-uyuni-salt-flats-to-chile-1 [2] http://theroadchoseme.com/the-uyuni-salt-flats-to-chile-2 [3] http://theroadchoseme.com/potosi

That's a very enlightening answer. Thank you very much.

Thanks also for the Wiki Overland link (www.wikioverland.org) in your HN profile. I wasn't familiar with the site. What a terrific find.

You're very welcome.

It's my side project that I created when I returned from my Alaska->Argentina drive to give back to the Overlander community that gave me so much. I'm struggling to attract new people to the site, and especially to get people to update it. If you can help get the word out, that would be awesome. Thanks.

If you're seriously considering an Overland trip, I'm very happy to help in any way I possibly can. Shoot me an email at dan@wikioverland.org if you have specific questions or whatever.

Wait a sec... are you the Dan who used to date Sweeney? Small world. I was the guy from Toronto who was actually considering tagging along for the Africa trip :)

Haha, that's me. I'm off to Sweeney's house for movie night tonight :)

Your 100x silver story is incredible.

U.S. gov claims direct trade, which makes some amount of sense:

http://www.state.gov/r/pa/ei/bgn/35751.htm

I'm a massive fan of Tesla and Musk, a Tesla shareholder from the IPO and definitely support the gigafactory but this is a surprisingly poor presentation. It doesn't layout the need for it, nor what advantage it will give Telsa (other than an unclear 30% cost reduction - compared to today or the rest of the market in 2017?); what is their market - all Tesla, other electric vehicles, solar storage etc. It's surprisingly sparce of detail for such a bold, punchy move.

You probably need to see the speaker notes (or listen to the presentation) basically, the battery pack is a huge chunk of cost in the car, this is especially true in lower cost cars, and the markup of the materials as they go through the process which quite high (basically that is code for 'the battery makers are making huge margins on batteries). Without a battery competitor to try to squeeze margins, you are forced to either do your own batteries or cede the margin to the battery maker.

By putting this out there you end up effectively negotiating with Panasonic (the biggest supplier) to either take lower margins or lose their biggest customer. In order to make that sort of threat you have to credibly be able to build the capability. So Panasonic (and potentially other manufacturers that see the sorts of margins they get) see this and react. One hopes they react by lowering their prices (taking less margin) or by new companies entering the field which are structured to operate on lower margins.

The overall effect is the same, Tesla negotiates a better price on a pricey chunk of their cars.

Even though this is touted as a green factory, nothing's been said about the raw materials and their mining. That's where most of the pollution and toxicity happens. I remember reading somewhere about how mining the rare-earth's used in battery packs nullify any environmental advantages battery-packs bring.

Li-Ion batteries do not contain any rare earth metals

Neither do the TSLA motors, IIRC.

Have they released any information on who they're partnering with yet?

Panasonic has been mentioned:

http://www.reuters.com/article/2014/02/26/us-tesla-battery-p...

And i'll bet that their meetings with Apple were regarding this factory:

http://appleinsider.com/articles/14/02/16/apple-secretly-met...

That's a good point about Apple. If they're able to get batteries 10-15% cheaper than they currently can (I'm guessing they already get a large discount through their buying power) it would make it even easier to defend their mobile and tablet positions.

It's also the exact kind of thing that Tim Cook would do.

From Tesla's 10-k, "While our plan is to attempt to produce lithium-ion cells and finished battery packs for our Gen III vehicles at a new Tesla Gigafactory, our plans for such production are at a very early stage. We have no experience in the production of lithium-ion cells, and accordingly we intend to engage partners with significant experience in cell production and to date we have not formalized such partnerships. In addition, the cost of building and operating the Tesla Gigafactory could exceed our current expectations and the Tesla Gigafactory may take longer to bring online than we anticipate."

What am I supposed to take away from this presentation?

Not much there. The TSLA marketing machine is in full effect.

We'll all know if it's more than pure marketing if they raise the bonds and secure the corporate alliances necessary to build this. Convincing Panasonic is no small feat, IMHO.

I'm not talking about the Gigafactory itself being marketing. They've been talking about it for the past two quarterly conference calls. It looks like something that is going to go ahead, somehow, at some point.

What is full-blown marketing is Tesla releasing a 6 page pdf that has no build site, no financial details, very little information of any kind, a bare-bones artist's rendering of a hypothetical location, and what look like unrealistic projections regarding build capacity.

Much like the Hyperloop paper, there's very little substance. But it makes the rounds of the internet, conveniently coinciding with a share dilution.

Musk is clever in more ways than one.

The projections of build capacity look to be roughly what's needed in order for Tesla to actually achieve the growth investors are hoping for. If they're not realistic, then I reckon Tesla's growth is going to be severely and abruptly curtailed in the future.

Looks like Tesla is investing in a domestic battery cell factory. Its projected output in 2020 will be approximately equal to the amount of cells output across the entire industry last year. They estimate a 30% decrease in cost/kWhr, which is pretty cool. Oh and they're building a ton of solar panels and turbines to help power it. Pretty cool if you ask me.

It makes sense to me - if Tesla continues to grow, why pay the middleman for one of the most essential items in their cars?

To add to your last point, I think they absolutely need the batteries packs to be 30% cheaper for their planned mass-market car to be affordable.

Why wouldn't the countries where these batteries are currently developed decide to heavily tax the export of these batteries to Tesla thus offsetting any net economic benefits of the Gigafactory? Though there seems to be enough competitors where this wouldn't be a problem.

Because of the WTO and binding open trade agreements

There's more than one country involved in exporting these batteries. If only one country would tax exports, they would lose market share to the factories in other countries.

(Then add WTO restrictions on top of that. Thanks to the WTO!)

Reflexive but actually relevant (in the sense of incredible pace of advancing efficiency): https://www.youtube.com/watch?v=I5cYgRnfFDA

This is classic Apple strategy. Apple now makes its own chips, buys up memory by the billions, etc. It uses its economies of scale to further solidify its moat.

Its called vertical integration, and its been around for a long time before Apple.

oh i know but Elon seems to fancy himself Jobs.

I don't think so. If you listen to them both speak about their companies, Jobs was more interested in revolutionizing how humans use technology. Musk is more interested in saving the human race from itself. Solar City is about renewable energy, Tesla is about vehicle safety and renewable energy, and SpaceX is about establishing life off of earth.

You are certainly right to draw a parallel--they both want to change the world--but Musk literally wants to evolve humanity.

>Musk is more interested in saving the human race

You know, I watch his talks (because I'm interested in the work his company's do) and listen to the investor's quarterly conference calls (because I own a small stake in TSLA) and I don't understand where the hero worship comes from.

To me, Musk comes off as another shrewd business man, almost crossing over into the slick/shady end of the spectrum sometimes.

I think the term is Vertical Integration.

Actually it's classic Henry Ford. The first ford factories used to make just about everything on site, including things like windscreens. It only made sense to go back to suppliers when suppliers were large and reliable enough to do so.

Mid 30k for a Tesla? Yes please.

cool. a Drupal site. :-)

I'm also super stoked to hear about Jay-Z's new album coming out, "Jiggafactory".

Reply on news.ycombinator.com