
Why Apple Could Win Big With Tesla’s Giant New Battery Factory - cyphersanctus
http://www.wired.com/business/2014/02/teslas-giant-battery-factory-save-apple/
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startupfounder
This is bigger than any Apple deal.  THINK BIGGER.

Apple might or might not invest in the Gigafactory to reduce the cost of their
lithium battery component of their hardware by 30%, but tesla is thinking
bigger.

I first thought that Apple should buy Tesla, but my thought process has
changed and I think this discussion between Apple and Tesla is short sighted,
it's a means to an end.

Don't think of Tesla as only a car company. 35GW of battery production per
year is a huge amount of electricity storage potential.

The USA uses ~1,000GWh of electricity per year, much of this is baseline power
needs, but more of this is peak power caused by time of use and heat spikes.
We build 1GW power plants all the time to take care of these peaks in power
demand. When the price of electricity hits a certain real-time price these
natural gas plants turn on, produce the high value electricity and then turn
off when the price falls back down.

But why is the electric motor so much better than a combustion motor? Time.
Torque is instant.

Elon thinks BIG, REALLY BIG!

This is a Distributed Peak Production Play. If I am correct then each year
that the Gigafactory can produce an additional 35GW of storage potential, or
3.5% of the USA's generation capacity.

Each Tesla automobile is an internet connected, transportable, 85kW
distributed instant peak power plant and when you put 500,000 new powerplants
on the road each year for 10 years you have just cut peak power and completely
disrupted the Global Energy Industry by creating 350GW, 35% of the USA's
annual demand, and its distributed redundant energy system.

Elon loves redundant distributed systems, Falcon9 has 9 Merlin engines,
Tesla's battery packs, Solar City's distributed solar, etc.

Don't believe me? Just wait 10 years.

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morsch
> The USA uses ~1,000GWh of electricity per year

That's off by several orders of magnitude. Wikipedia says ~4100 TWh/year,
Wolfram Alpha ~3900 TWh/year. It's also 35 GWh of battery production, not 35
GW (which seems obvious in retrospect but I just spent 10 minutes trying to
wrap my head around how the 35 GW figure could fit in). A 1 GW power plant --
which incidentally is quite large -- generates (if run at capacity) 365 * 24 =
8760 GWh per year.

So, not 3.5%, but roughly 0.001%.

[http://www.wolframalpha.com/input/?i=electrical+energy+used+...](http://www.wolframalpha.com/input/?i=electrical+energy+used+in+us+in+GWh%2Fyear)

[http://en.wikipedia.org/wiki/Energy_in_the_United_States](http://en.wikipedia.org/wiki/Energy_in_the_United_States)

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DVassallo
I grew up in a small country of 400K people, which in 2012 generated 2.2GWh of
power. [1] This is very easy to calculate, since the country has only 2 power
plants, and the electricity grid is completely isolated. [2]

I was astonished to realize that the battery output of 4 weeks from the
gigafactory would power my native country entirely from batteries for a full
year!

[1] Page 2:
[http://www.nso.gov.mt/statdoc/document_file.aspx?id=3743](http://www.nso.gov.mt/statdoc/document_file.aspx?id=3743)

[2]
[https://www.enemalta.com.mt/index.aspx?cat=2&art=5](https://www.enemalta.com.mt/index.aspx?cat=2&art=5)

~~~
morsch
That document refers to 2 296 296 MWh = 2 296 GWh = 2.2 TWh.

~~~
DVassallo
Obviously I was too sleepy when I looked at this.

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justinsb
To me, it seems much more likely that an Apple/Tesla meeting revolved around
Apple wanting Tesla to offer an iOS powered in-car computer, as they've just
done with the other carmakers.

Apple could also be buying Tesla, of course, but I can't imagine Apple not at
least trying to get Tesla onto iOS. Though I also can't imagine a world where
Tesla would agree!

~~~
threeseed
There is zero chance of Apple buying Tesla. It's either (a) iOS in the car as
you said or (b) co-investment, patent sharing or technology sharing between
the two companies.

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dippyskoodlez
Given the battery 'advances' Apple likes to tout, I wouldn't be surprised if
it's both :)

The reoccurring thought for me though: "FINALLY we're getting somewhere!"

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mistercow
>But Koslowski says those old batteries could also become part of a robust
secondary market. They could, for instance, store energy generated by home
solar grids, which can make use of less-than-full strength cells because they
don’t have to go anywhere.

Is that how the degradation curve of LiIon batteries goes? My experience with
them in consumer electronics has been that they seem to drop capacity about
linearly for a while, and then suddenly there's a massive drop-off and the
battery becomes more of a brick than anything.

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ksec
It is not as if Lithium is a abundant reserve that is available whenever you
need.

Yes there are enough Lithium reserve even for the next 100s years even if EV
were suddenly replacing all cars today. And it is much like oil, there are
still HUGE amount of reserve.

But the problem is extraction. Or more precisely the cost of extraction. If
some of these reserve cost 10x more to extract then no one will invest into
extracting it. Example would be if US didn't perfected Fracking Natural Gas
wouldn't be so much cheaper today.

Then there is the technology side of Battery. Telsa are NO expert in Battery
Chemistry and Technology. They have currently zero expertise and experience
with it. Compared to Panasonic or Other who have been perfecting the battery
tech for decades.

The problem with today's battery isn't production capacity. Heck China could
ramp up production of battery faster then you could even imagine and have a
world of over supply issues within a year. The problem is with battery tech
itself which requires innovation or even a leap forward.

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seanalltogether
Seems like a bit of a reach?

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revelation
Particularly since the batteries the Gigafactory will produce are not fit for
use in consumer gear, at least not without heavy modification. Tesla uses them
in temperature and load controlled battery packs, so they have stripped away
all of the protective circuits that nomally protect LiIon cells from overload
and even removed the outer metal casing thats supposed to stop them from
shorting out.

~~~
digikata
The design of the current Tesla battery would have been significantly driven
by the nature of existing capital investments in battery manufacturing
processes. There's no indication that batteries would necessarily be in that
form in a process you build from scratch. The Gigafactory could very well plan
for variations around their core production process. And, based on the
production volume that Apple could consume, Apple certainly has the investment
capital to make that variation worthwhile.

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revelation
Actually, Panasonic built a new plant. But thats besides the point. As you
move to the kind of battery you would want mass-manufactured and used in Tesla
battery-packs, the level of protection and isolation by each cell will only
get less, not more. And you certainly don't want to deal with the pouch form-
factor that is needed in devices like the iPad.

~~~
digikata
I see your point - but Panasonic's plant may still be constrained by current
market demands. A new plant, and new Tesla car battery design can be driven by
whatever constraints will bring down total price in the Gigafactory + Tesla
consumption. I would think that getting to that goal could encompass a battery
design with a structural enclosure with intra-cell and outer-wall protection
for pouch batteries. Vs cylindrical cells with no outer wall protection it
just doesn't seem like that large of an engineering jump - more of a repeat of
the previous engineering design processes at a different design point.

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semerda
I feel like this might be a step towards Tesla working with Apple to make
their (Tesla's) batteries consumer ready/enabled. Apple obviously has good
experience and knowledge on that front that could create an interesting
partnership where Apple consumer products all have Tesla batteries.

Hey that be one cool footnote to have on the back of your iPhone.. "Designed
by Apple in California and Powered by Tesla" ;-)

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paul_f
Is the limitation in making faster/better/cheaper batteries a bigger battery
factory? Or is it the raw materials to make LiIon batteries?

What is the world's capacity for lithium hexafluorophosphate? Japan currently
makes the bulk of the supply.

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starky
The limitation on making better batteries is research, having a NA factory
isn't going to help that. As per increasing the rate and reducing the cost, I
don't have a good answer for that, Li-Ion battery production is already
incredibly automated I'm not sure how much they can improve the rates. I would
be surprised if Tesla hasn't figured out the supply chain management for all
the materials they require.

I'm still sort of skeptical about this factory. There have been very few
battery manufacturing plants ever built in North America over the years and
they have pretty much all shut down (A123, E-One Moli, and Delphi are the
three that come to mind) as they don't make money.

