

Panasonic and Tesla Sign Agreement for the Gigafactory - houseofshards
http://www.teslamotors.com/about/press/releases/panasonic-and-tesla-sign-agreement-gigafactory

======
pptr1
This just shows me that Tesla is able to execute. The Gigafactory, opening up
patents, rapidly growing charger network, and the eventual $35k Gen III tells
me they have tons of potential in the future.

Tesla is thinking big. They want everyone in the world to eventually have a
electric car. I think they will own a significant share of premium market
after they release the Gen III.

However, they will be cars that people will desire at a cheaper price point
than the Gen III, from different manufacturers. Also some people love certain
car brands regardless of anything else, and mostly will stick to those brands.
It will be great that those other car brands will be able to more easily make
electric vehicles.

Those electric cars from other manufacturers will most likely have a Tesla
battery and charge on Tesla charging station. I think this is true disruption.

~~~
Shivetya
Okay, but when does the factory first come online? The projections are for by
2020, so where do any possible cost savings for the III come from? Unless we
can expect it to slip a few more years like the X did.

I am hoping for a 200 mile range mid size, but I doubt Tesla will be first. I
am also expecting range extender vehicles to have much more popularity
initially because to be honest, I don't have time for 30 minute charge cycles
when I am on trip and most people I know just want to get to their
destination.

~~~
cc438
I think pushing the mainstream launches back would be a wise decision. They've
just begun their hard knock education in designing for longevity and
reliability with the earliest examples of the Model S passing the 2 year mark.

Traditional auto manufacturers have decades of experience driving the
continual refinement of their designs. These efforts have resulted a general
expectation among consumers of unfailing reliability and service life measured
in decades. The issues they're experiencing with drive units are troubling but
acceptable for most owners who know they bought a bleeding-edge testbed for
future technology. My concern is one of time, things move relatively slow in
the world of automotive engineering and these issues show Tesla has a lot to
learn and a lot to change once they've discovered the points of failure. That
kind of time doesn't fit with their expected release schedule and owners won't
accept the kinds of failure rates experienced in the Model S in a mass market
car.

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Kayou
Why are most of the lithium cells cylindrical, while most of our devices are
cuboid? (I think of phones, laptops, external battries... but phones and most
laptops have flat lithium cells nowadays). Is cylindrical less expensive? Is
it more secure? It seems like a waste of space to me.

~~~
jacquesm
It's an efficiency matter. The cylinder gives good electrode surface relative
to the amount of matter contained. For a cube that ratio would be much worse,
for a sphere it would be optimal, but spheres are harder to manufacture and
connect to, as well as harder to stack in arrays. So we take a medium between
the sphere and the cube and end up with a sweet spot in the cylindrical shape.

~~~
SeanLuke
This doesn't explain why LiPoly batteries are cuboids.

~~~
jacquesm
Indeed it does not, this is about Tesla's and Panasonics 'gigafactory' which
will make Lithium-Ion batteries in a cylindrical form factor.

Lithium Polymer batteries (or LiPo for short) are a special case of Lithium-
Ion batteries. They are sold in a 'pouch' format (and they are not the first
to use a format like that, for instance, in the polaroid cartridges there used
to be a battery in a similar form factor (polapulse)).

The reason why LiPo batteries are not so constrained in shape as their
siblings is that the electrolyte is a _liquid_. Solid electrolyte batteries
are typically much more constrained in terms of shapes.

This is also why regular car batteries (lead-acid) can be block shaped, the
acid is also a liquid.

The polapulse was an interesting battery, it only had to fire the camera 10
times but was quite high current. The packaging constraints of the cartridge
dictated the battery geometry and so a flat pouch like battery was born.

LiPo batteries exist in all kinds of interesting shapes and sizes too.

~~~
tobz
Also, and this is entirely speculation and I'd love to hear a battery engineer
confirm this, but: if you're packaging together cylindrical batteries, it
inherently gives you more air channels between the batteries to promote
cooling. When you're talking tens of kilowatts, both in discharge and charge
rates, the percentage that ends up as waste heat suddenly becomes a whole lot
of heat. You probably wouldn't want a maximally stuffed cavity with these
packs turning into a single, massive chunk of thermal mass.

EDIT: looks like I was firsted somewhere below, doh!

~~~
jacquesm
But you're 100% on point there. That's a side benefit from having those
cylindrical cells.

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julianpye
This is very significant for Panasonic's new direction. They now partner with
a startup that takes on a IPR policy radically different from the Panasonic of
the past. Panasonic's R&D engineers used to be measured internally by the
amount of patents filed and the company had a large presence in every
significant patent pool. In addition it means that one of Panasonic's key
manufacturing expertise will be located overseas, which is also a radical
departure to the mindset of keeping core manufacturing as 'black boxes' in
Japan. However this may still apply to components that are integrated in the
Gigafactory.

~~~
jacquesm
> which is also a radical departure to the mindset of keeping core
> manufacturing as 'black boxes' in Japan.

I saw some of this up close recently and it was quite interesting how Japan
was still 'fighting the last war' in this sense.

They were trying to avoid a repetition of Japanese companies doing an end-run
around American and European companies by doing their manufacturing and then
turning around to innovate on the processes and principles in the end
resulting in a wholly new industrial base.

But the world has long moved on from that time and even though there is plenty
of innovation in this sphere the threat of a manufacturer turning into a
competitor is still present (for instance, in China) but between the US, the
EU and Japan that threat is all but non-existent.

Japanese companies are slowly coming around on this and are becoming more free
with respect to sharing technology and IP with other partners. This Panasonic
move is another step in that direction.

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snarfy
Has there been any analysis on the amount of joule energy pumped out of all of
the current gas stations on a daily basis?

I'm worried the current electric grid is woefully insufficient for a world
full of electric cars. I know their are plenty of electric lines out there
running at greater than 100% of their rated capacity already.

~~~
cgearhart
Napkin math supports your concerns.

\- The US used 134.51 billion gallons of gas in 2013.[1] \- There are ~33
kWh/gal in gasoline [2]

134.51e9 gal x 33 kWh / gal = 4.44e12 kWh (4.44 trillion kWh / year)

\- The US used a total of 3.856 trillion kWh of electricity in 2011 [3]

Ignoring improved efficiency and excluding other factors, converting all
gasoline usage to electric would more than double US electricity consumption.

Under reasonable assumptions, PV solar generates about 0.75 kWh/m^2 per day.
[4]

4.44 trillion kWh/year / 0.75 kWh/m^2 per day x 365 days/year / 1e6 m^2 per
km^2 = 16,219 km^2

Which means you could generate all of the required electricity with about
16,200 km^2 of solar panels - which is just about exactly the total land area
of Hawaii [5], or 405 million average home PV systems.

It's doable, but it will be non-trivial.

[1]
[http://www.eia.gov/tools/faqs/faq.cfm?id=23&t=10](http://www.eia.gov/tools/faqs/faq.cfm?id=23&t=10)
[2]
[http://en.m.wikipedia.org/wiki/Gasoline_gallon_equivalent](http://en.m.wikipedia.org/wiki/Gasoline_gallon_equivalent)
[3]
[http://www.eia.gov/energyexplained/index.cfm?page=electricit...](http://www.eia.gov/energyexplained/index.cfm?page=electricity_use)
[4] [http://physics.ucsd.edu/do-the-math/2011/09/dont-be-a-pv-
eff...](http://physics.ucsd.edu/do-the-math/2011/09/dont-be-a-pv-efficiency-
snob/) [5]
[http://en.m.wikipedia.org/wiki/List_of_U.S._states_and_terri...](http://en.m.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_area)

~~~
cowmix
One fact everyone seems to forget is that it takes approximately 6.5 Kwh of
energy to refine one gal of gas. That is JUST refinement and not the energy to
pump, store, etc.

My Volt drives around 22 -> 28 miles on that power.

~~~
NickM
I was going to raise the same point. And, considering that the average new car
sold in the US gets 25MPG, we should be just about breaking even.

~~~
trose
Breaking even eventually. I doubt they're going to suddenly just stop refining
all of that oil. There will have to be a trend before the oil companies start
lowering their output.

~~~
seanflyon
A given car will either use refined gas or electricity. The point is those
both use a similar amount of electricity, either way the impact on the grid is
similar. Oil companies are not going to refine more gas than is used. They
might refine more than is used on a particular day or even month, but they are
not going to outpace demand on any long time scale.

------
cpwright
I found some of the business arrangements interesting, though maybe not
surprising. I think those are the real new details of this release.

First, they'll be producing 50GwH of packs, but only 35GwH of cells; so
they'll still be dependent on external cell manufacturing for a sizable
portion of the packs.

Second, that it sounds like Panasonic will basically own and run the cell part
of the factory; as opposed to Tesla or a joint venture purchasing the
equipment and making the cells themselves.

~~~
centizen
Panasonic already has one of the largest production complexes in the world for
battery production; but with the huge demand from Tesla they have had a hard
time keeping up with the market. I see this as a way for them to scale up to a
capacity that can handle Tesla's orders while still being able to produce
18650 cells for the rest of the electronics market. Over the past few months I
(and many others) have had a very hard time getting a reliable supply of the
NCR18650B cells Tesla is using in their packs.

I don't see Panasonic wanting to give up any of the control it has over this
sector. The agreement is probably positioned to obligate Tesla to purchase X
amount of cells a year to make the new gigafactory economically feasible for
Panasonic.

------
ksec
Again as with my previous response, I still dont get why the need for a
Gigafactory. Battery Industry are an extremely automated, high volume market
and with profit margin in single digit. Cutting those off aren't going to
automatically made electric cars affordable.

Unless Telsa and Panasonic has jointly developed an revolutionary battery that
is going to need some funding and mass produced. But any new battery will need
years in time for safety testing. And the news would properly have leaked by
now.

~~~
jacquesm
Making things in volume reduces the price. The profits on the batteries may be
low (I'm not an insider so I have no idea what the profits are on these), but
the profits on the cars (which Tesla makes) are reasonably high. It's like
investing in infrastructure when you make something that uses that
infrastructure, akin to a hosting facility investing the fibre optic lines
that connect it.

Electric cars are already affordable, that's not the main sticking point (a
fast way to charge them and a widely rolled out network of charging stations
is).

If they manage to shave a few percentage points off the cost of production and
create jobs in the process I don't see the problem.

~~~
johansch
Tesla says:

[http://www.teslamotors.com/blog/gigafactory](http://www.teslamotors.com/blog/gigafactory)

"In cooperation with strategic battery manufacturing partners, we’re planning
to build a large scale factory that will allow us to achieve economies of
scale and minimize costs through innovative manufacturing, reduction of
logistics waste, optimization of co-located processes and reduced overhead."

I guess that and also securing the supply chain for themselves as the rest of
the car industry starts/continues to compete with them for the battery supply.

------
dm2
So are they working on a new battery design?

The last time I did some research on the Tesla batteries it was just a ton of
high-quality 18650s, is this still true?

~~~
marvin
Tesla still uses 18650 cells exclusively, unless I'm misinformed. They are
still chemistry and form factor agnostic and only care about performance and
price. This announcement is part of a plan to further reduce battery cell and
battery pack cost, as well as increase production volumes by a factor of 10-50
over the next 10 years. I don't think there is any information on how these
new batteries will look yet.

------
ansible
I am curious about the choice of lithium-ion vs. something like lithium-iron-
phosphate (LFP) battery chemistry.

Obviously, there is a good reason for Tesla and Panasonic not to have chosen
LFP, does anyone know why? I know the energy density is lower, but are there
other reasons?

~~~
swypych
I would suspect safety is probably the driving force here, especially
considering the capacity of these batteries.

[https://suite.io/mike-dehaan/4bfn2v4](https://suite.io/mike-dehaan/4bfn2v4)
[http://www.umanitoba.ca/outreach/conferences/phev2007/PHEV20...](http://www.umanitoba.ca/outreach/conferences/phev2007/PHEV2007/proceedings/PluginHwy_PHEV2007_Session1_Guerfi.pdf)

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rthomas6
In terms of investing (buying Tesla stock), is Tesla's probable-seeming big
success with their next two cars already built in to the price? In other
words, how overvalued is Tesla stock? Would it be worth making it a
significant fraction of my portfolio?

~~~
howeyc
> In terms of investing (buying Tesla stock), is Tesla's probable-seeming big
> success with their next two cars already built in to the price?

Definitely.

> In other words, how overvalued is Tesla stock?

For those following Discounted-Cash-Flow models, a lot.[1]

> Would it be worth making it a significant fraction of my portfolio?

That's up to you. I'll leave you two parting thoughts:

a) It could follow the path of Amazon, lots of people screaming "overpriced"
forever as it rises.

b) Building a lasting car manufacturer isn't exactly easy.[2]

\---

[1] [http://www.businessinsider.com/aswath-damodaran-tesla-
valuat...](http://www.businessinsider.com/aswath-damodaran-tesla-
valuation-2014-3)

[2]
[https://en.wikipedia.org/wiki/List_of_defunct_automobile_man...](https://en.wikipedia.org/wiki/List_of_defunct_automobile_manufacturers_of_the_United_States)

------
awjr
Out of curiosity, with the recent release of their patents, is Tesla going to
be enabling other car manufacturers to purchase these batteries? Standardising
on a housing module across manufacturers seems a 'good thing' for the general
consumer.

~~~
dm2
I don't see why they wouldn't, they already sell their powertrains to other
companies.

It would probably depend on how much extra capacity they have. The Tesla
vehicles are in high demand and only going to be in more demand when they
start rolling out the Tesla 3 (which is really the 4th Tesla isn't it, I guess
they're referring to it being the 3rd generation with the Model S and X being
the same generation).

~~~
twsted
Elon gave a funny explanation for the new name: he would have wanted a Model E
to compose S E X, but the name was already taken. So he chose 3 to at least
have S 3 X.

~~~
DiabloD3
I don't know why this is being downvoted. Elon Musk himself confirmed that S,
E, and X was supposed to make fun of how sex is used in marketing to sell.

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ck2
I want to own an electric car so badly in my lifetime.

Really hope this makes that happen.

They sure are quiet though, I worry about pets and wildlife.

 _Gigafactory will employ about 6,500 people by 2020_

Delivery truck drivers? I mean the factory is should be mostly automated by
2020.

~~~
pi-rat
Just move to the bay area or Norway, both of these places seem to issue Teslas
to everyone ;)

