Elon Musk: Tesla To Break Ground At TWO Battery Sites

APR 30 2014 BY JAY COLE 53

What Is Better Than One "Giga Factory" Site?  How About TWO "Giga Factory" Sites!

What Is Better Than One “Giga Factory” Site? How About TWO “Giga Factory” Sites!

By now we have all heard about Tesla’s plans for a “Gigafactory” in be built in one of four US states – Arizona, Nevada, New Mexico or Texas; creating 6,500 new American manufacturing jobs.

Tesla's "Gigafactory" Timeline

Tesla’s “Gigafactory” Timeline

Now it appears Elon Musk is ready to “thin the herd” by naming two winners; well at least quasi-winners.

Apparently fearful of bureaucracy and red tape, Bloomberg is reporting that Tesla is going to choose two sites for their new super battery manufacturing facility and take development of both sites all the way up to ground breaking.

“What we’re going to do is move forward with more than one state, at least two, all the way to breaking ground, just in case there’s last-minute issues. The No. 1 thing is we want to minimize the risk timing for the Gigafactory to get up and running.” – Tesla CEO Elon Musk

It is unclear what ultimate purpose the ‘losing’ site would serve, or if Tesla could recoup their R&D dollars there but the company is saying it is worth the investment.

“We will end up spending more money than would otherwise be the case to minimize the timing risk,” Mr Musk said, while noting that Tesla may need more than a single “giga factory” in the future.

We expect to learn more about Tesla’s battery manufacturing plans and potential site selection when the company reports 1st quarter earnings on May 7th.

Bloomberg

Categories: Tesla

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53 Comments on "Elon Musk: Tesla To Break Ground At TWO Battery Sites"

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If they can get cheap enough batteries $100/kWh range the potential for solar storage is endless. I’d say the prospects of solarcity using the capacity is as high as tesla. I hope they have the demand to open two factories. Elon sure thinks big

Just as a random note: Tesla has said they are looking to cut costs by about 30%, which would put cost per kWh around the $160-170/kWh range in 2018.

$130-185/kwh was the Barron’s quote a couple weeks ago, with the low side only reachable at 500k units.

More relavant to investment analysis, I think, is if these values, and the other qualities of lithium, surpass lead-acid as a storage medium?

So my back-of-napkin calculator says lead-acid is about $134/KWH in singles quantity, not bulk volume (rolls battery, off a solar supply web site).

Was those 30% for the car or for the batteries?

I would expect them to want the batteries to cost less than 70% of what they pay now but maybe I’m just optimistic 🙂 Or that they have much lower costs now than I think they have.

You are being optimistic 🙂

Elon also said the raw materials are roughly $60-70 per kWh, so it’s unlikely that they’ll hit $100/kWh net cost. There’s a lot of equipment and maintenance needed, along with recouping the investment.

Even $100/kWh isn’t enough for “endless” solar, but it’ll be enough to shift daytime solar into the evening peak. You only need about 4-6 hours for that, so it’d be $0.5/watt, matching the cost of panels.

But if you want it to last from one day to the next and get you off the grid? 20 hours storage is needed (assuming you oversize your array to handle cloudy days; otherwise you’ll need much more storage), and now you’re looking at $2/W for just the raw cells, and you have to add packaging, assembly, safety, electronics, and profit, so maybe $4/W.

Over 2000 cycles (Tesla only needs half that for cars, so it’s optimistic), that’s 10c/kWh.

10c/kWh on top of the cost of solar generation is too much for widespread adoption of getting off the grid.

2000 cycles down to 70% capacity? And after that the packs have no more value for grid storage somehow?

EVTV has some .95 cent per KWH batteries on sale right now!

Great Scott! It’s not just a gigafactory, Marty. It’s TWO gigafactories. One for now, and one for… the future!

Is that a Bigafactory? 🙂

Hahaha, good one Foo!

it’s a HOAX-afactory. Both states will know that their proposal is 50% farce, so both states will not bite any carrot Tesla dangles.
So, I guess this gives Tesla an excuse to raise another $2 bil, to avoid bankruptcy.

Everyone knows 2*2 = 4. So, Tesla guy says, why don’t I do 2 * 4/2 = 4. Then, people will know that I’m a freaking genius.

That’s a rather worthless analysis.

If it was 100%, then the state wouldn’t bother with incentives because it’s a done deal. If it’s 10-20%, they may think it’s not worth their time.

50% is perfect for competition. Whoever shows they want it most gets it, and both states feel like it’s within their grasp.

If Tesla requires 2 Giga factory for less than 1 Million cars, then how many Giga factories do we need to convert 50% of the world auto sales to BEVs?

For 100% then 30 in the US, 25 in the EU, 40 in China (and going up fast, will probably hit 50-60 in the next 20 years) about the same in India and well… a few more in the rest of the world 😉

If you would cover 100% of the worldwide sales in 2012 then you would need 160 Gigafactories.

Well it definitely looks like Musk is serious about the Giga-Factory. The thing that bothers me is that Panasonic has not signed on to the factory yet. I mean, tick tock Panasonic, you are either in or out. What are the implications if Panasonic refuses to go in on this plant Jay? Do you think another battery maker like Samsung would take their place? Could Tesla build the factory without the investment of a battery maker?

I think Samsung SDI is putting massive amounts of pressure on Tesla’s relationship with Panasonic. Panasonic has to be the front-runner of course, but it would not surprise me at all to see Samsung displace them.

I don’t see Tesla moving forward without a partner at all, they clearly want some kind of hybrid JV here on their own turf – it’s just a matter of how high a price/split/control they are asking for. If the cost is too high, they will just have come down until someone signs on. Always a good idea to start high, (=

I would be really surprised if Panasonic would cede this business to Samsung, but just the fact that they haven’t sprung forth with anything resembling an investment so far, leads me to wonder how much they are interested in Tesla’s business? On the other hand, I can’t fault Panasonic for being cautious and conservative. The kind of investment Tesla is looking for out of Panasonic is big potatoes.

That’s why Tesla should choose Nevada; to get the potential partners in the gambling mood. 🙂

Way to think outside the box kdawg.!!

I can see it now KDawg. All the players sitting around a table. “I’ll see your Gigafactory and raise an electric truck factory to boot!” Jaws hit the table. LOL

And at that point, Elon pushes a pile of strange poker chips forward, the kind of chips the average man will never touch, and calmly says “I’m all in”.

Perhaps that’s why they’re developing 2 sites. The possibility that Panasonic and Samsung won’t get along in the same facility, so if it comes to that, Tesla can give the two their own “megafactories” instead.

I mean if groundbreaking just means getting a bulldozer make a ditch in a desert wasteland it might be ok, but paving a lot with shareholder dollars for nothing cannot be good no way.

Thankfully Elon Musk doesn’t care about the share holders but what’s best for the company (which in the long run is best for faithful share holders too).

Can you even imagine him doing this without a lot of consideration, number crunching and with a good plan?

“Can you even imagine him doing this without a lot of consideration, number crunching and with a good plan?”

Yes I can.

Most of Elon’s stuff are like that. Back-of-the-envelope math, and some random decisions. This is another of the idiotic thing that people will take as a sign of ‘super genious’.

All other companies will put this as ‘part of site selection’. Since Tesla didn’t make any progress, now they claim 2 factores idea to keep fanboys going. Yet, they started with the very idea that there needs to be ONE giant factory to get ‘ecnomies of scale’. Seems like they are throwing in all the buzzwords Elon learnt from some econ 101 reading.

@See Through But what if we See Through your anti-Tesla heel-biting and find you work for an industry that would be negatively impacted by their success? You see – anyone can spew on the internet, but NOT ANYONE can take huge risks to change an established heavy industry that is dragging the economy, national security and the entire ecosystem of our planet into the dumpster. You know, if my kids can grow up breathing clean, fresh air – and not diesel particulates and carbon monoxide, that alone would give me pause to hope, wish and pray that Elon Musk succeeds. When a See Through-type character criticizes a pioneer like Elon Musk with absolutely zero facts and only a computer and keyboard to post verbal farts – I just laugh. Look, you nor anyone else has no clue exactly what transpires behind corporate doors – and anybody can criticize anything. The big question is why? What is your agenda? Think positive. People said Mr. Musk could not sell his little sports car. He did. People said he was some nutjob, that he couldn’t possibly build a rocket – but he did. Then – how could some “idiot” like Musk get his… Read more »

Don’t feed the troll…

James dear,
I’m glad that you can keep laughing 🙂 No, I don’t work for oil industry. I work in computer industry, so we become too logical.

Think about this. If Gigafactory timing was so vitally important, why even raise the money 3 months even before any clue on the factory site? Wouldn’t it be logical to raise funds when the project is ready to go?
It is clear, only tiny battery companies will jump into the bandwagon. If you were Panasonic, would you give up your technology to your biggest customer, and help build them a gigafactory to cut you off, and/or lower your profits? None of these make sense. If Tesla wants a factory, they need to invest decades of research or buy start-ups. Sorry, no one is going to give free lunches to Mr, Musk.
Although, I wish him good luck and you as well.

I See Through your troll act.

BTW James and Spec, Chris,

No need to get so emotional. We are just discussing the real prospect of the gigafactory here, and the silliness of making 2 or 3 factories when the first one is not even started. No need to pull in all these love-hate stuff. Be good. Cheer up.
And watch out for graphite particles and acid rain. And don’t buy food from Japan that grows near Fukushima.

What is more impressive? A 5 billion dollar gigafactory, putting a man on Mars, or Musk’s ability to keep the news cycle going 24/7? Never a dull moment…

Answer: Yes 🙂

Easily to put a man on mars. =) I could settle for a self-sustainable base on the moon too. =)

Q1 earnings reporting coming close. The gigafactory mock-up slide is duplicated for share holders, with titles reading ‘Site 1: 500000 cars” and ‘Site 2: Another 500000 cars”.

Reading between the lines here, but is it also possible that Musk wants to continue to use the promise of a gigafactory as a bargaining chip, and therefore might pick his intended location plus one in a state that’s giving him the most grief?

Very possible. Both states will know, that their proposal is fake ( at least half fake; possibly fully fake).

Also, finally, there must be only one factory , that saves 30% in battery costs. 2 factories would 15% savings. that’s the very tenet on which this gogafactory thing is hinged : everything needs to be one giant factory.

Your math amuses me.

Trolls just bore me…

I wonder if he will use this as a tool to get direct selling rights in every state.

He’ll be like Oprah, “And you get a Gigafactory! And you get a Gigafactory!”

I doubt any state cares for these 6000 factory jobs in 2020. Dealerships employ a lot more than that. They sell 50K ford F-150s per month, and same number of Chevy Silverados per month.

May be, Wyoming or Montana or North Dakota would care for this.

For me is brilliant political move to put the governor of the two states chosen on his/her knees. Just imagine the political implications of Tesla leaving the state after ground braking due anti free market laws. Elon knows how play chest with politics too. “House of Cards”

lots of good options here. The two site strategy is a good one. Even If he purchases or controls both sites, one can be left fallow, a second gigifactory, a solar pv farm, a solar city manufacturing location, a space x facility, and on and on.

Time is money and this is a super smart strategy.

Clearly, ground will not be broken at two sites. “Up to”, gentlemen.

“Bloomberg is reporting that Tesla is going to choose two sites for their new super battery manufacturing facility and take development of both sites all the way up to ground breaking.”

Well you could read it that way, (=

The Musk quote is pretty clear though, they are going to put shovels in the ground at two locations:

“What we’re going to do is move forward with more than one state, at least two, all the way to breaking ground, just in case there’s last-minute issues.”

I read it as “everything short of breaking ground”.

Yes. “All the way to…” without having to cross that expensive line of prep work.

Japanese companies have a reputation for being shrewd players and they usually win.

I love it Elon. Make Panasonic and Samsung executives get down and grovel face down in the dirt. Put in a couple kicks for me.

Money is a tool. And Elon uses it masterfully.

Yes James,

Elon is taking on the richest individually owned Corporaton in America and their many big oil/big coal allies–The Koch Brothers.

I bet that See Through’s rabidly anti-Tesla/Elon Musk ravings is associated with one of the many shadowy political money-laundering organizations controlled by the most evil Koch Brothers.

That’s the NASA way!
Double up just in case one side happens to go awry.

If nothing happens then one site will be a JV with Panasonic, the other a JV with Samsung SDI.