

The gamble on Tesla’s gigafactory in the Nevada desert - rck
http://www.washingtonpost.com/business/capitalbusiness/the-gamble-on-teslas-gigafactory-is-a-big-one--in-many-fashions/2015/04/10/50e9de40-d4c8-11e4-a62f-ee745911a4ff_story.html

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topkai22
One issue with the article is that doesn't distinguish between the statistics
for Nevada as a whole, which are totally dominated by Las Vegas's size, and
northern Nevada, which has a different economic makeup than sin city.

As a recent transplant to Reno I've been very happy with how livable the area
is. The University of Nevada -Reno is a solid research university, the town
has a palpable belief in itself these days, the proximity to Tahoe makes all
sorts of luxuries available, and the economy is both more diverse and better
educated than this article indicates (again, Reno != Vegas.) The Tesla deal
certainly seems to have spurred conversations that weren't happening a year
ago, and I've personally been getting a number of headhunters calling me for
local software development work in the last couple of months, which was a
pleasant surprise, I was worried I had put a giant railroad spike in my career
by moving.

The political leadership in Reno and Northern Nevada have been playing a long
game for a while to diversify and expand the economy. I considered it very
serendipitous to find out how successful they've been since I moved here.

~~~
marssaxman
I lived in Reno for a couple of years in the late '90s, working for what I
believe to have been the only software company in the city at the time
(MountainGate, later acquired by ADIC). It was clear even then that the city
government was trying to develop Reno into something more like a California-
style tech hub, but they hadn't gotten very far. It was a lonely place to
live, for a young techie, though I have fond memories of all the long weekends
I spent jeeping around in the desert. I would never consider moving back, but
I'm glad the place has stuck to its path and started getting somewhere with
it.

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Animats
I still can't see how that place can profitably employ 6,500 people. That's a
huge head count for a US industrial plant. As I pointed out yesterday, the
largest auto assembly plant in the US, Ford's at Kansas City, has 3700
employees. The Leaf battery plant has about 250. Modern manufacturing plants
which crank out identical products in high volume don't need many people. 6500
employees is the kind of number you'd get if you looked at a non-automated
battery pack plant in China.

Low-end battery plants in China usually have cells manufactured in automated
facilities (often in Japan) which are then assembled by hand into battery
packs. That may be Tesla's plan. Cell manufacturing in the Reno plant will be
done by Panasonic Energy Corporation of North America. They're hiring.[2]
Panasonic writes: _" Panasonic Corporation will cooperate with Tesla Motors,
Inc. to construct a large-scale advanced battery manufacturing facility known
as the Gigafactory in the state of Nevada. Panasonic's role in the Gigafactory
will be to manufacture and supply cylindrical lithium-ion cells and invest in
the associated equipment, machinery, and other manufacturing tools based on
the battery demand from Tesla. Tesla will take the cells and other components
to assemble battery modules and packs."_

So it looks like the factory will make round Panasonic cells a lot like the
current Ncr18650 ones[3], using Panasonic technology and employees, which will
then be hand-assembled into packs by Tesla employees. That's essentially what
they're doing now. Unclear why this will reduce cost per unit.

[1] [http://www.industry.siemens.com/topics/global/en/battery-
man...](http://www.industry.siemens.com/topics/global/en/battery-
manufacturing/process/pages/default.aspx) [2]
[http://panasonic.taleo.net/careersection/external/jobdetail....](http://panasonic.taleo.net/careersection/external/jobdetail.ftl?job=1403648&src=JB-10200)
[3] [http://www.amazon.com/Panasonic-Ncr18650a-3100mAh-
Rechargeab...](http://www.amazon.com/Panasonic-Ncr18650a-3100mAh-Rechargeable-
panasonic/dp/B00AHS5EH4)

~~~
greglindahl
The Gigafactory is intended to end up producing as many batteries as the rest
of the world does, when it was announced. That's what "economy of scale"
means. It's fair to say that no one knows what cost savings that might
produce, but it's silly to say that you can't see how that might possibly have
cost savings.

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CHY872
Bizarre article. The California border is waaay closer than they stated, and
although it's possible for a long term worker to live in SF and commute
weekly, that would be the worst of both worlds; obscene living costs + a huge
commute.

The 49% they state won't be Californians, they'll be people from all around
the country who agree to move to Reno. For the purposes of the Nevadan
economy, this is a win-win (although it might not be as good for education,
but that's what the education requirements are for).

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brianstorms
"The company sold an estimated 18,750 of its Model S roadsters in 2014, at a
sticker price of about $70,000."

18,750? How about more like ~33,000? And "roadsters?" Really?

Used to be the Washington Post had reliable reporters. Now it's just another
blog.

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agumonkey
And 56,782 worldwide as of Dec 2014, almost 4B USD. Musk claiming a 25% margin
so ~1B.

[http://en.wikipedia.org/wiki/Tesla_Model_S#Sales_and_markets](http://en.wikipedia.org/wiki/Tesla_Model_S#Sales_and_markets)
[http://www.quora.com/Whats-the-gross-profit-rate-of-Tesla-
Mo...](http://www.quora.com/Whats-the-gross-profit-rate-of-Tesla-Model-S)

~~~
agumonkey
Hmm some say that Tesla sells at loss
[http://money.cnn.com/2015/02/12/investing/tesla-apple-
elon-m...](http://money.cnn.com/2015/02/12/investing/tesla-apple-elon-musk/)

~~~
greglindahl
The 25% margin mentioned in the parent is a gross margin. I don't think anyone
has ever said that Tesla's gross margin is negative. These terms mean
something specific.

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pa5tabear
Is the work-life balance working for a facility like this as bad as it is for
the more design-oriented engineering at Tesla?

~~~
plorkyeran
Having people work over 40 hours a week is actively disincentivized by at
least two things: the workers aren't in an overtime-exempt field where extra
hours are free for the employer, and they're getting tax incentives for
creating new jobs, which rewards hiring more people to work fewer hours each.

