
Tesla Gigafactory [pdf] - yurylifshits
http://www.teslamotors.com/sites/default/files/blog_attachments/gigafactory.pdf
======
startupfounder
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...](http://wap.wsj.com/mdc/public/page/2_3022-autosales.html#autosalesE)

~~~
Aloisius
_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.

~~~
djcary
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.

~~~
tedivm
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.

------
josh-wrale
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](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...](http://www.globalpost.com/dispatch/news/regions/americas/bolivia/130321/bolivian-
lithium-exports-smartphone-electric-car-battery)

Edit 2 (more on the same.. more recent and relevant article):
[http://seekingalpha.com/article/1971851-tesla-motors-and-
bol...](http://seekingalpha.com/article/1971851-tesla-motors-and-bolivias-
lithium-strategy-whats-at-stake)

~~~
grecy
> _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](http://theroadchoseme.com/the-uyuni-salt-flats-to-chile-1) [2]
[http://theroadchoseme.com/the-uyuni-salt-flats-to-
chile-2](http://theroadchoseme.com/the-uyuni-salt-flats-to-chile-2) [3]
[http://theroadchoseme.com/potosi](http://theroadchoseme.com/potosi)

~~~
kevinskii
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.

~~~
grecy
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.

~~~
patcon
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 :)

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

------
simonsquiff
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.

~~~
ChuckMcM
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.

------
curiousDog
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.

~~~
danhak
Li-Ion batteries do not contain any rare earth metals

~~~
warfangle
Neither do the TSLA motors, IIRC.

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

~~~
goatforce5
Panasonic has been mentioned:

[http://www.reuters.com/article/2014/02/26/us-tesla-
battery-p...](http://www.reuters.com/article/2014/02/26/us-tesla-battery-
panasonic-idUSBREA1O1MF20140226)

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

[http://appleinsider.com/articles/14/02/16/apple-secretly-
met...](http://appleinsider.com/articles/14/02/16/apple-secretly-met-with-
tesla-ceo-elon-musk-also-working-on-tech-to-predict-heart-attacks)

~~~
Mvandenbergh
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.

------
foobarqux
What am I supposed to take away from this presentation?

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

~~~
josh-wrale
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.

~~~
hnnewguy
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.

~~~
makomk
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.

------
debt
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.

~~~
eru
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!)

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

------
brianbreslin
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.

~~~
ac29
Its called vertical integration, and its been around for a long time before
Apple.

~~~
brianbreslin
oh i know but Elon seems to fancy himself Jobs.

~~~
cloudwalking
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.

~~~
hnnewguy
> _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.

------
beachminter
Mid 30k for a Tesla? Yes please.

------
fmitchell0
cool. a Drupal site. :-)

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

