Analyst: New Machines Will Push Tesla Model 3 Production To 8,000/Week

SEP 11 2018 BY ERIC LOVEDAY 120

Not only that, the analyst believes Tesla will drop down to the coveted $100 per kWh battery cell cost point by the end of this year.

We’ve acquired a note to Tesla investors from Worm Capital (do your own stock research, please). It opens with this statement:

In late August, Tesla invited us to visit the Gigafactory located outside Reno, Nevada. We happily took them up on the offer. The visit included behind-the- scenes tours of each production wing—and concluded with test drives of the Performance Model 3 and Model S P100D, the fastest production car in the world.

The note provides some broad background for those not in the know, but then it moves on to specifics, like this:

After touring the facility, we feel highly confident in Tesla’s production process. Previous bottlenecks appear to have been remedied, and we’re increasingly optimistic in Tesla’s ability to hit— and sustain—weekly production rates of 6,000 Model 3 battery units per week, and with new Grohmann machine, scale to ~8,000 / week with minimal additional capital investment.

Tesla Gigafactory - Model 3

Tesla Gigafactory August 2017 Aerial Construction Update – Duncan Sinfield

Then there’s a lot of filler in the lengthy note, followed by the highlights, which we’ve included in entirety below:

● As of mid-2018, the Gigafactory is now the highest-volume battery plant in the world, according to Tesla. It currently produces batteries at about 200 million per quarter, closing in on a one-billion per year production rate. Tesla now produces more battery capacity than all other car manufacturers combined, including China, with a run rate of approximately 20 gigawatt-hours.

● Tesla will likely achieve a battery cell cost of $100 per kWh by the end of the year, so long as commodity prices remain stable.

● In the first ~45 days of offering Model 3 test-drives, the company reportedly received 60,000 sign-ups, according to Viecha.

● Grohmann Engineering will help module production become three times faster, and three times cheaper, according to Viecha. Their new system will be sent to the Gigafactory by the end of Q3 or beginning of Q4. The Grohmann machine will be in Zones 1, 2, 3, and Tesla will be receiving three machines. The process was designed to alleviate the previous bottleneck in module production which delayed Model 3 production significantly. The machine is already built, and points to the advantage Tesla will have in building future Gigafactories. They have learned many painful lessons, but have a solid blueprint for porting the factory across the world.

● Preliminary estimates for Q3 production rates will be around 50,000 to 55,000 Model 3s, but deliveries may be higher.

● The Gigafactory is ~90% automated, according to Viecha. Eventually, battery cell production, energy pack assembly, and drive train unit production will strive for full automation.

● Tesla will likely start producing the shorter-range Model 3 in the next eight months. Right now, they are focused on selling higher-margin cars where demand continues to exceed what is being produced.

● We believe Tesla is creating a best-in-class self-driving technology. According to Tesla, the company believes it can gather 1 billion miles of data per year from current drivers.

● According to Tesla, by next year they will start exporting Model 3s to other countries. They will also begin to earnestly produce Semis by 2020.

So, key takeaways are Tesla Model 3 production should jump to 8,000 per week in the near future and battery costs should drop to near $100 per kWh by the end of the year.

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120 Comments on "Analyst: New Machines Will Push Tesla Model 3 Production To 8,000/Week"

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KevinW

This headline is a little misleading. 8,000 model 3 battery packs a week is not 8,000 model 3’s each week. Tesla’s other factory throughput should also be considered.

Viking79

True, but these machines are necessary for $35,000 Model 3, so that is a good sign to see them arriving soon 😉

They will likely dramatically boost margins in Q4 as well.

TomArt

Based on what the article said, it was the battery modules that made up the packs that were the worst bottleneck. The article does state, however, that the 6k and 8k numbers refer to Model 3 battery packs, not to complete Model 3 vehicles.

But, yes, there may be other bottlenecks in Fremont that may or may not allow those numbers to be equal to completed Model 3 vehicles per month any time soon.

windbourne

Actually, the semis are supposed to use M3 battery packs and drivetrain.

antrik

Drive units, yes. Battery pack has never been confirmed AFAIK — and I don’t think it would make sense geometrically. Also, there are claims (don’t remember how official) that they will use NMC cells, like in their storage products; rather than NCA like Model 3 and other vehicles — so if anything, the battery is more likely based on the Powerpack 2. And that actually *does* makes sense geometrically, from what I can tell…

TomBrown

Regarding nmc cells and nca cells geometry… Sorry im a battery novice… What do you mean nmc makes more sense geometrically? Are the nmc not the typical cylindrical shape?

arne-nl

I think antrik was referring to Model 3 packs, not cells.

My guess is that it is in the middle. The Semi will use a custom battery pack, filled with the same modules as in the Model 3 battery pack. That would make a lot of sense from a production efficiency standpoint.

antrik

I don’t think so. The Model 3 modules are just an awkward shape to fit into other form factors. How do you fill a 2,40 x 2,40 m space with ~2,00 x 0,3 m modules? The less elongated Powerpack 2 modules should work much better for that I believe.

The way the Model 3 modules are connected electrically, with the cables protruding vertically near the end of the modules, would also be awkward for repackaging I think. The Powerpack modules on the other hand are made for stacking.

(And again, there is the issue of chemistry. They can probably reuse the Powerpack modules more or less verbatim; while using the Model 3 shape, they’d have to build modules on the same lines as the Model 3 ones, but with different chemistry… Not sure whether that’s a big deal, though.)

Pushmi-Pullyu

It’s been speculated, and I think it likely, that the PowerWalls and PowerPacks use a different chemistry than Tesla uses in its cars. I think that’s likely true; a stationary power pack doesn’t need the high power output that a Tesla car does.

Therefore, assuming that what you say about the architecture is true, then arguably it would make more sense to use PowerPack architecture but use the same chemistry as cells used in the Model 3.

antrik

Sorry for the confusion. By geometry, I mean the arrangement of the cells in the modules; the cells themselves have the same shape.

My point was that the Powerpack modules using NMC chemistry have a different module geometry than the Model 3 modules using NCA cells. Though arguably the geometry and chemistry are somewhat orthogonal matters…

jamcl3

I would be very surprised if the modules were not purpose-designed for the Semi. Vibration requirements for trucks exceed that for passenger cars, and stationary packs could meet neither. NCM would not surprise me at all in the truck.

antrik

Does an electric truck really experience more vibration that a passenger car?…

I don’t know about the Powerwalls; but Tesla’s automotive pack designs do not strike me as likely being very sensitive to vibration…

Of course there might be other considerations to prompt a custom design.

Pushmi-Pullyu

I agree, that’s just speculation. It doesn’t make much sense to use 8-10 or so battery packs all stacked in there separately, with no common architecture between them. For example, that would take 8-10 water pumps to drive the cooling system flows. Far better to use just one or two larger capacity pumps.

I’m sure others can think of more important ways in which Tesla would likely alter the TM3 battery pack for use in a Tesla Semi Truck.

It may be that the Semi Truck battery packs will be just a variant on the TM3 design, but I think it’s safe to say that there will be at least some minor variations, if not some major ones.

antrik

Another recent analysis claimed similar numbers for Fremont as well, though… So it sounds like everything should be in place soon for an actual 8,000 Model 3 per week production rate 🙂

BenG

The other recent analysis said that Tesla needed additional line capacity in a couple places to hit 8,000. I think the paint shop is one holdup area that they can’t do 6k with current process, IIRC. So it’ll require some additional investment, but not mega. And some additional time, so, not sure about hitting 8k any time ‘soon’ if by soon you mean within a few months.

Cavaron

They worked around the paint shop bottleneck by eliminating two colors recently.

BenG

I read that they are now charging for those two colors to help streamline the paint-shop process, but I doubt that gets them anywhere near 8k/week … more likely it may help them consistently hit 5k or something similar.

TomArt

They were always charging for those colors. The only standard color was plain Black. They have removed those paints as options, only promising to complete the orders that already had those paints over the next few weeks.

Nix

The Obsidian black was also the least popular color by a wide margin according to a spreadsheet of Tesla orders. So the death of that color choice isn’t too surprising.

G2

The Freemont factory had a production capacity of 500,000/year under GM+Toyota so even if Tesla only matches that production (considering 100,000 are S & X) then 400,000 could be TM3 at 8K/week for a year with two weeks zero production.

arne-nl

Stop comparing Nummi output with Tesla. They’re totally different companies doing things differently. Basically, the Fremont plant is a number of m² that you can fill with machines.

Speculawyer

Meh…there are bottlenecks…like paint…which are the same no matter if you are ICE or electric.

Pushmi-Pullyu

“Stop comparing Nummi output with Tesla.”

Yes, it’s an absurd comparison and I also would like it to stop. Tesla’s approach to building automobiles is rather different, and even if that was not the case, building “premium” BEVs with bodies of high-strength and ultra-high-strength steel, and glass roofs, is different in many ways from building lower-priced gasmobiles with ordinary steel bodies.

antrik

The NUMMI plant was doing mostly assembly; while Tesla produces basically everything for Model S and Model X there, and everything but the drive train components for Model 3. That’s a *lot* more actual work to do; and accordingly, the plant has multiplied in size.

And that’s just the buildings. I’d be surprised if there is anything of the original equipment left…

EV-A

” … weekly production rates of 6,000 Model 3 battery units per week, and with new Grohmann machine, scale to ~8,000 / week with minimal additional capital investment.”

The article doesn’t specifically mention the ability to produce 8000 Model 3’s / week, just the battery units.
Can you clarify?

morrisg

The tour was of the Gigafactory in Reno which builds batteries, battery modules and motors, not the Fremont car assembly factory.

F150 Brian

Super
Now start building 200KWh packs for my next pickup!

Speculawyer

If they hit $100/KWH then it is all over…ICE will be dead for passenger cars. That will just make EVs so much cheaper to drive than ICE cars. It will take a while….we need more good EV cars…less expensive models…more factories…more companies at that $100/KWH level….but we will be past the tipping point.

TomArt

Since I don’t have the article in front of me, I am left to assume that the statement from the analyst was a forward-looking statement from Tesla? Was it speculation on the analyst’s part? Did anyone at Tesla verify that they are not yet at $100/kWh at the cell level? I thought Tesla already achieved that last year, based on some detailed and thoughtful analyses that I’ve read, and that they would be down to $100/kWh at the pack level by the end of this year.

Clarification, anyone with legitimate sources…?

antrik

You seem confused… Or mislead by questionable sources.

The most recent and definite statements Tesla made, were at the last earnings call, where Elon said that most likely they will reach $100 per kWh at cell level by the end of this year (baring rising commodity prices etc.), and $100 per kWh at pack level in less than two years, i.e. early 2020. This article just cites the Tesla investor relations representative reiterating the $100 per kWh at cell level claim.

Speculawyer

It’s all just one analyst’s opinion. Take it with a grain of salt.

Dave_the_braver

Actually, as stated above, it was in a Tesla conference call, and reiterated by the Tesla rep, so slightly more than opinion.

Mazzeppa

Until it’s a fact, it’s all estimations – even from Tesla. But of course, they should have better insight than anyone.

Carcus

“Arne Alsin and Worm Capital clients are currently long Tesla (TSLA), and stand to benefit if the trading price of Tesla increases.”

carcus

… quality cells (panasonic 18650B) wholesale, bulk —- best price I can find online is right at $400/kwh —- which would put the Tesla Model 3 LR pack (cells only) at $30,000.

OR

.. at $100/kwh — it’s just $7,500

— take your pick

/and yes, I know it’s not 18650b’s in the model 3

arne-nl

I believe the cells in the Tesla batteries are different from those cells you are looking at. Not comparable.

antrik

But Tesla is is ordering some 700,000,000 18650 cells per year (for Model S and X), which alone should bring down the price closer to $150 per kWh or so, by a rough extrapolation. The Tesla cells are also simpler. (Less redundant protection measures, since Tesla implements many of them at module level instead.) And the Gigafactory 21700 cells are supposed to be at least 30% cheaper per kWh than the 18650 cells they order. All in all, approaching $100 per kWh indeed sounds about right.

Pushmi-Pullyu

Right. A price you can find online is no indicator of how low a price Panasonic is willing to give its partner and by far its biggest customer, Tesla. We can be sure that Panasonic is giving Tesla a significantly better price.

Not to mention that costs per kWh are lower for the 2170s than for the 18650s, because of high-volume economy of scale at Gigafactory 1.

Nix

Yes, especially when you are getting free investment advice from a company that otherwise charges for their investment services.

The correct term for free investment advice from a company that charges for investment services is “advertisement”.

antrik

Notice that this is $100 per kWh at cell level. The oft-quoted “magic number” is $100 per kWh at pack level. Tesla claims they will reach that in 2020.

Of course this talk of a particular price barrier is misleading. The point of price parity depends on a lot of factors, and is different for every vehicle type and configuration. For sporty premium sedans, it’s arguably already here; for small entry-level cars, it will still take several years. (Around five years for Tesla, by my estimation.)

Dave_the_braver

True, but I think that the $100/kWh is quoted for ‘mass market cars’, ie cars of less than average cost, with equivalent ‘usefulness’. So we are almost there. The base Model 3 will be $35k, and thus close to average car cost, and will have better safety, performance, pollution, etc. than similar ICE cars.

Derek

“The base Model 3 will be $35k, and thus close to average car cost”
True, but your referring to average new vehicle price, which includes truck and SUV’s, which helps pull the number much higher. For a car comparable in size to the Model 3, the model 3 should start $15,000 less, but add in it’s tech (minus EV aspect) and it should be $10,000 less. Elon has said he wants to make a base 25k car, but sadly, that car is 5-10 years away.

antrik

A similar-sized combustion Toyota may very well be $10,000 less; but the Model 3 price is entirely adequate compared to other sporty premium sedans from BMW etc.

That was my point: price parity depends a lot on the vehicle class and parameters. EVs can match the price point of higher-performance combustion cars much more easily than of low-powered entry level offerings.

Andy

But there’s currently no plan for a small, entry level car, so it’s a bit meaningless. I doubt Tesla will be too keen to create such a high volume, low profit vehicle either, especially if it takes away capacity from their higher profit margin cars and dilutes their name.

That said, they could do the inverse of Toyota/Honda/Ford and create a separate brand for their lower end cars, which would solve the brand dilution problem.

Speculawyer

Elon has mentioned a low-price entry model a few times. But, yes, nothing solid and it would not be available for years if they build something. Tesla is going to have to start buying/building more factories soon if they really hit $100/KWH.

Pushmi-Pullyu

It’s true that Elon has mentioned that at least once and fairly recently, but I get the sense it’s only as a “Wouldn’t it be nice if we could…” sort of speculation. I don’t get the sense it’s anything Tesla is currently working on, even as a back-burner project. Tesla has a lot of irons in the fire of development: Model Y, Semi Truck, Roadster Mk II, and a pickup. I can’t see Tesla trying to build an “entry level” vehicle within the next five years, if they ever do.

Now, I hope that Tesla will eventually do so, but it has to make sense for them business-wise, and Tesla’s costs will have to come down a lot before that can happen.

Viking79

He just mentioned a few days ago that a $25,000 car could be doable in 3 years (not that they would). My guess is they could do an inexpensive shorter range vehicle. Compete with Leaf and such. My hunch is they focus elsewhere first.

philip d

They could certainly do it but only after bringing the Tesla pickup to market.

Andy

A $25k Model 3 isn’t really my idea of a small entry level car. Although it could be considered moreso in North America, but not the rest of the world.

philip d

And the thing is once the cost of the batteries drop low enough of course the cells in their premium sports sedan will be the same ones used in the less costly entry level vehicles but In fact the drivetrain will be pretty similar as well. Tesla will likely use the same components for the drivetrains in both cars (like using the same SR Model 3 motor with a more efficient power output mapping with less power output) but will bring the cost down for the entry level cars by using less costly materials for the passenger cell, interior materials like seats and upholstery and wheels and tires.

So what you will get is a smaller car with a less premium feel but it will inherit a kickass drivetrain with rock solid driving dynamics that is far better than the ICE competition. When I switch from driving our Model 3 to driving our Volt it’s a little depressing. Even if you reduced the power output of the M3 it would still feel like the far superior drivetrain.

antrik

Yeah, that’s part of my point: certain things that are premium with combustion engines, come cheap with an electric drive train. Thus price parity in the premium segment is easier to achieve, since the savings on premium parameters can make up for the battery cost. But there is less room for lowering the price further; so price parity at the very entry level is harder to achieve.

TJKR

$100 per Kwh for cell cost is impressive but what about the whole battery back to include the structure, thermo management, BMS and charging hardware? If that’s $100 per Kwh, its game over man. GAME OVER MAN!

Speculawyer

Charging is generally not viewed as part of the pack. Thermal & BMS definitely add to price but not much. I think it brings it up to $120/KWH (assuming a $100/KWH cell). Yeah, $100/KWH at pack level is definitely GAME OVER…Tesla will nuke the rest of the industry from orbit. 😉 Well, they have a long way to go…more car designs, more assembly factories, more gigafactories, more superchargers, etc.

olaf

Why is it game over? To my knowledge a battery needs to be over 100 kWh to compete with ICE range. This means just the batteries cost over 10k. While it will provide a huge step in the right direction for cars over 25-35k there are more developments required for the sub 25 k classes.

That said an increase in power density will actually be able to increase range as well. And probably real mass production of electrical components will drop the price of these further. So I guess in around 5 years cars of 15-25 k can also be offered cost effectively.

Speculawyer

Well the Model 3 uses only 75KWH and gets more than 300 miles of range. You can get an economy car for around $20K. Swap out all the ICE garbage (engine, fuel system, transmission, ignition, exhaust, etc.) and put in electric motor, controller, fixed-gearbox, and charger. Those should be around equal value…probably less for the EV parts. Then add in the $7500 for a battery. At $27,500…that’s a great car that costs a fraction to fuel, has less maintenance, is quiet, can be refueled at home etc. You’ll save more than $10K in fuel over the life of the car.

Yeah, ICE is not going to be completely dead…there are dead-enders. But between lower fuel costs, better performance, less maintenance….who wants the noisy, vibrating, lurching transmission, higher-maintenance, and toxic emission spewing ICE car?

antrik

“Competing with ICE range” is a somewhat arbitrary goal. There seems to be a sort-of consensus that around 50 kWh in an efficient vehicle (giving more than 200 miles of range) should be adequate for an entry-level EV to compete with entry-level combustion cars.

I agree that it will take about five more years until such cars can be made at a comparable cost. On the other hand, most people are willing to pay *somewhat* more up front for cars with lower operational costs (see diesel) — so total price parity is probably not necessary to shift most demand towards EVs…

Pushmi-Pullyu

“Why is it game over?”

It’s just the sort of thing that enthusiasts like to believe. At one time, it was supposed to be “game over” for gasmobiles if EVs got a real-world range of 100+ miles. Then it was under $200 at the pack level for battery packs. Then it was 200+ miles. Now it’s under $100 at the pack level.

I personally continue to hold out hope for a major revolutionary advance in batteries; that may come with solid-state batteries… or it may not. In the meantime, slow but fairly steady progress in improving energy density and lowering costs in EV batteries are allowing the EV revolution to progress… but slowly. Unfortunately, the progress in EV tech has been more as an evolution than a revolution. 🙁

But it’s not all just about the batteries. The new type of motor that Tesla is using in the Model 3 is, arguably, a true revolution! See link below:

https://cleantechnica.com/2018/03/11/tesla-model-3-motor-in-depth/

I don’t think you need 100 Khw to compete with gas cars. The main reason people with their gas cars desire so much range is so they don’t have to go to the gas station every day. As a result, with an EV you get to charge at home. 200 to 300 miles is perfectly adequate to compete with a gasoline car. Granted, a larger SUV or pickup might need 100 Khw to have 300 miles of range. But a smaller aerodynamic car would not.

SouthWaves

Why, explain?

Murrysville EV

The ICE will be with us for quite a while, due to its advantages in several aspects.

Batteries will have to go far lower than $100/kWh to be at parity with ICEs – I’d say it’s more like $30/kWh. At that point, you’re talking about being on par with the cost of building an ICE. There aren’t many ICEs that cost $8000 to build which compete with the Model 3.

scott

All it will take for mass adoption of EV’s is for gas to hit $5 a gallon again.

Andy

That’s not really how the oil industry works.

It’s a commodity. Less demand lowers price, not increases it.

antrik

That’s not what his comment was about, though…

Speculawyer

LOL…no. Name a single advantage of ICE besides the refueling speed.

arne-nl

It makes you feel like a MAN!

Nix

Even if you are a woman? ICE cars cause body dysmorphia?

*grin*

philip d

They go vroom? Oh, oh I almost forgot they have a soul because they are complicated and make lots of sound.

John

You can store fuel in canisters, the infrastructure is at market saturation. People are ignorant selfish arses and don’t care about anything but themselves.
There are weird arguments that I don’t understand like people road trip across a continent every two weeks and only stop long enough to fill their tank… I really don’t understand…
My dam leaf could sure use an extra 50-75km real range though. Having to charge for a site visit in the city really sucks!!😉

Ziv

Gassers don’t lose 30% to 35% of their range when the temps drop below 20 degrees, they lose just 5% to 10%. They are cheaper to build. They have a ubiquitous fueling system in place. They sound better during acceleration. The stink of gasoline has a certain appeal. They are what a lot of people are comfortable with due to being the same old, same old.

antrik

My estimate is about $65 per kWh needed for entry-level EVs with decent range to reach the same production cost as entry-level combustion cars.

However, because of lower costs of operation, along with various other advantages, EVs should become a very attractive proposition to most people even before that point is reached.

Already EV take-up is limited more by supply shortages of almost all existing EV models, rather than lack of demand. I believe this trend will continue all the way until production of EVs has scaled enough to completely displace sales of combustion cars. (Which should happen towards the end of the next decade, extrapolating from current trends.)

Pushmi-Pullyu

I think there is too much focus on the price of batteries as the one-and-only cause of higher prices for EVs. Once it makes sense for larger auto makers to start putting EVs into high-volume production, the auto parts supply industry is going to start making parts specifically for EVs in large numbers, auto body shops are going to get used to servicing them, and in general overall costs are going to come down for making and maintaining mass produced EVs.

Eventually, the economy of scale is going to tip far enough toward EVs to allow them to be truly cost-competitive with comparable gasmobiles, and that will be followed very shortly by them being less expensive, and thus preferred by the majority of car buyers.

The only question is just how soon that’s going to happen.

Speculawyer

“Tesla now produces more battery capacity than all other car manufacturers combined, including China, with a run rate of approximately 20 gigawatt-hours.”

We can talk about all the other non Tesla EVs…but in a way it is kinda pointless. If they have a great design and lots of people want to buy it, they won’t be able to build them.

antrik

They will be able to build them — it just takes some two years or so to ramp up battery production capacity, if demand turns out higher than anticipated.

Seven Electrics

Car manufacturer battery capacity != battery capacity of suppliers like LG Chem. Most manufacturers do not make batteries.

Speculawyer

Mmm…maybe. I don’t think the battery makers like LG Chem have all that much capacity now. Why would they? They are not going to build a factory without orders. And the traditional car companies are not asking for many batteries because NONE of them have an EV that sells in large volumes. Look at the scorecard above. The biggest seller is the Chevy Bolt EV…and it sells half the Model S….and less than 1/10th of the Model 3. You think they have 10X battery factories sitting around doing nothing?

Doggydogworld

CATL is around 15 GWh/year and growing 100%+ per year. LG or Samsung (forgot which) claims 90 GWh/year by 2020.

Panasonic had 21% vehicle battery market share in Q1. That’s Tesla and Toyota. The entire market includes buses and trucks, which use a lot of cells in China. Tesla talks about “carmakers” when making these claims now, to exclude CATL, LG, Samsung as well as BYD’s huge bus division.

Pushmi-Pullyu

You said it, Speculawyer!

Volkswagen has reportedly decided not to follow Tesla’s path in building their own battery factories, but nonetheless it is investing many billions to ensure a supply of EV batteries adequate for its near-future plans; billions it will pay battery makers to enable them to build out high production capacity. At least, that’s what VW currently says it’s going to do; we’ll have to wait and see how that works out for them.

Other auto makers are going to have to follow either Tesla or VW to ensure their own battery supply… or else they are going to find themselves in the same position as Kodak, watching the market stampede to the new tech while they’re left making products nobody wants.

https://electrek.co/2018/05/04/vw-doubles-electric-vehicle-battery-contracts-billion/

F150 Brian

So if vehicle packs can be built for $100/KWh, can we get a powerwall for 1/2 the currnt price (about $500/KWh) please ???

Speculawyer

It’s supposed $100/KWH by the end of the year, AT THE CELL LEVEL. Powerwall means in pack with additional electronics. So it is more than that.

And sorry, PowerWalls are all on hold since they need the batteries for cars & big utility PowerPack installations.

BenG

Is this true? They’re not delivering PowerWalls? Didn’t know that.

Speculawyer

Yes, it’s true. I follow solar PV things and Tesla has told people waiting for PowerWall not to expect delivery this year.
http://www.greentechmedia.com/articles/read/tesla-solar-and-storage-delays-and-deliveries

BenG

So, demand has exceeded supply to the extent that there’s ~6 month wait to get a Powerwall. The company states that deliveries are ongoing for people who signed on to purchase in the past, not that they are ‘all on hold’.

Speculawyer

Some will get batteries…many will not. Tesla is (understandably) going to prioritize those applications where they get the best return on their investment. I suspect that is Model S, Model X, highly optioned Model 3s, and PowerPacks.

antrik

They claimed the main bottleneck for the energy products is actually scaling up installation capacity. Cell production capacity should not be a problem, since it’s insignificant compared to what they use for automotive.

Doggydogworld

I agree cell production should not be a problem, but JB and/or Musk recently claimed to be cell limited.

antrik

Yeah, that was a little confusing: they first mentioned that they are cell constrained, and that at some point they even diverted capacity from energy to automotive products; but later they stressed that installation is the real bottleneck…

ModernMarvelFan

Why bother? Demand is exceeding supply so they will milk the early adopters as long as they can.

antrik

In addition to the fact that the $100 per kWh figure is at cell level, not pack level, there are various other things to consider. First of all, the energy products only get about 2/3 the capacity from the same number of cells (in order to allow for more frequent cycling); so that alone increases the price by 50%. The energy products are also lower volume, i.e. less economies of scale. Furthermore, compared to an automotive pack, the Powerwall includes additional housing, power electronics, and control circuity. And the considerably smaller total size drives up relative logistics, sales, and other overhead costs.

All in all, I think the price of the Powerwall is pretty fair for now… And last I heard, way below everything else in this space.

Kungen

Also its the wrong type of cells for the power wall they use a different chemistry NMC VS NCA. We dont know the price for NMC cells

antrik

Yes, the different chemistry is part of the reason for lower capacity. (The bigger part is probably lower voltage.)

You are right that the NMC cells might have an additional price premium, because of higher cobalt contents… Shouldn’t be very significant, though.

J

the inverter (built in) isn’t free, ya know!

eject

The paint shop is legally limited to 25 cars per hour. They need to built one that leaks less VOCs or they can’t exceed that number.

Doggydogworld

You’ve got bad info. They’ve run entire weeks at >40/hour.

Pushmi-Pullyu

What, only one completely false statement in your FÜD, Eject?

Being lazy today, are you?

iamta

This is More Great News for the Shorts ! So that the Shorts May be Cast and Burn forever in the Pits Of H
l ! …….

CDAVIS

Imagine 5 Tesla Gigafactories going full tilt capacity within next decade… and Tesla still being Gigafactory constrained to meet demand.

Elon Musk was likely correct when he predicted years ago that one of Tesla’s biggest challenges will be building Gigafactories fast enough to meet global demand.

BenG

Yep, battery mass-manufacture is a capital intensive, low margin business, so I do imagine that scaling up global production the way Musk wants to is one of his tougher challenges.

Andy

Which is one of the reasons many car manufacturers prefer to just sign contracts with battery suppliers. They get a guarantee of battery supply, without the major upfront capital requirements. That’ll help them scale up quicker, and concentrate on what they do best – build cars – rather than dabble in an industry they have little knowledge of (batteries).

antrik

Well, technically, it shouldn’t matter whether it an external cell supplier or the car maker who takes on debt for expanding cell production capacity… I think it’s more about flexibility / risk mitigation.

Pushmi-Pullyu

Volkswagen says it’s going to spend $48 billion to ensure near-future EV battery supply. I seriously question that’s less money than they would spend building factories themselves, as Tesla has done.

I understand why VW and other auto makers don’t want to invest in factories which could, in theory, become obsolete as battery tech advances. But I question that they are saving any money by paying the battery makers to build out factories, rather than doing that themselves.

We’ll have to see what strategy works best, over the coming years. If I’m right, VW will change course and start building its own battery factories.

https://electrek.co/2018/05/04/vw-doubles-electric-vehicle-battery-contracts-billion/

antrik

Indeed, the main takeaway from the last earnings call was that scaling battery production is the main factor limiting Tesla’s growth.

dam

These guys have been played

Ocean Railroader

Lately due to the hurricane I have come across portable generators that are made out of batteries and can be charged by solar panels. But make no noise or flumes.

The trouble is right now they cost three times as much as a gas generator and have low capacities.

Tesla should totally turn this market upside down with their battery production.

antrik

Well, depends on the definition of “portable” I guess… Tesla did deploy at least one temporary solar+Powerpack installation in Puerto Rico.

Seven Electrics

I’ve heard this one before. Pull the other one.

CDAVIS

@Seven Electrics said: “I’ve heard this one before. Pull the other one.”
————-

Lol… you have two?

Benz

A production rate of 8,000 Tesla Model 3 per week will probably be reached in the first half of 2019. Most likely in Q2 2019.

A production rate of 10,000 Tesla Model 3 per week will probably be reached in the second half of 2019. Most likely in Q4 2019.

But certainly, one can hope for it to happen sooner than that.

The most important thing is that they actually WILL manage to achieve such high production rates in a sustainable manner.

They are doing the best they can.

It’s just a matter of time.

All the achievements made by Tesla in the current decade have already been phenomenal.

BenG

Sounds about right to me.

TM21

If nothing else, it will give them more powerwall capacity.

antrik

Powerwalls use different battery modules.

Joshua

Clearly 6000 and 8000/w are talking about M3 battery units but not the car itself.

John

Driving the battery cost down should play nicely with expiration of the tax credit. I would think the transition to non-tax credit cars should be pretty minimalized by the falling cost of the batteries.

windbourne

1 huge takeaway was semi production does not really start until 2020. I though 2019.

antrik

They said “earnestly”. Low-volume production in late 2019, mass production in 2020 — that was my assumption all along.

(Not least since the prices suggests they are counting on $100 per kWh battery prices, which they don’t expect to achieve before 2020.)

Doggydogworld

Get used to adjusting your semi schedule and price expectations.

Louis Henn

The interesting part for me is that they received 60000 new sign-ups over 45 days. Thats about 40000 new orders per month. This can be sustained with about 9000 cars per week. It seems with the new machine they wil produce up to 8000 per week for a while to come. This shows that demand > supply. This is great!! It proves that Tesla doed not have to worry about demand slowing down. Take that shorts!!

Doggydogworld

60k test drives, not orders.

John Norris

>> In the first ~45 days of offering Model 3 test-drives, the company reportedly received 60,000 sign-ups <<
Oh, sign-ups for the test drive. Like Louis, I thought it meant sign-ups for the car…

Pushmi-Pullyu

But the Tesla shorters are still wrong. Have they ever been right? Even once?

Pushmi-Pullyu

“Tesla will likely achieve a battery cell cost of $100 per kWh by the end of the year, so long as commodity prices remain stable.”

Isn’t that exactly what Elon Musk said during the Q&A session at the last stockholder’s meeting? It really irritates me to see self-appointed “analysts” put this sort of thing into their analysis without crediting the source. Clearly they want people to think they figured it out on their own with all their intense research and their brilliant deductive* reasoning.

*Actually it’s inductive reasoning, but Sherlock Holmes has permanently left its mark on the English language. #GrammarNazi