Tesla Giga Factory

Tesla Giga Factory

At Some Point In Time, The Tesla Model S Will Be A Classic Like The Model T. Keeping The Model S On The Road Will Require Somewhat Frequent Battery Pack Replacements

At Some Point In Time, The Tesla Model S Will Be A Classic Like The Model T. Keeping The Model S On The Road Will Require Somewhat Frequent Battery Pack Replacements

Some say Tesla's proposed gigafactory will mainly support the battery cell requirements of Tesla Gen 3 and Tesla vehicle beyond Gen 3.

Others believe the gigafactory will largely produce cells for use in energy storage systems, including those used by Solar City and Tesla's Supercharger network.

Even a few think the Tesla gigafactory will produce cells for distribution to other automakers/laptop makers/cell phone manufacturers and so on.

There's a whole host of ideas out there regarding what the future holds for the Tesla gigafactory, but not one of those ideas floating around suggest what you're going to read here.

A guy by the name of Richard Menta may be on the right reack  Here's an abbreviated version of his take on the gigafactory

"Several year's from now there will be on the road a good number of eight-year old Tesla Model S vehicles with well over 100,000 miles on them. Many will be running perfectly, but for most their aging batteries will have lost at least some efficiency. As the cars get a little older they will lose significant efficiency and at some point those batteries will be due for replacement."

"If it costs $25,000 to replace those batteries it will crush the resale of older Tesla cars. It would also kill the residual value of those cars, critical when you lease a new Tesla."

"Companies like Panasonic, who supply Tesla batteries today, produce according to short term need and mid-term projections. If Tesla continues to outsource battery production they have to be spot on with those projections or else they will be left with either an over-supply of batteries or, worse, a critical shortage."

Menta then goes on to discuss why the giga factory could be a big money maker for Tesla in the near future:

"Battery replacement for older Teslas could be a lucrative side business if the retail price is relatively reasonable for a car that, on average, is coming off the production line around the $90K range. But if the cost of battery production is so high that the retail price offers little incentive to replace them..."

"Tesla wants to avoid battery replacement sticker shock when the eight year, 125,000 mile warranties on the original batteries start to expire."

"Tesla has already put over 25,000 Model S sedans on the road. A decade from now there will be a lot of cars that will need a battery refresh. The lower the production costs for replacement batteries, the bigger the potential payday for both Panasonic and Tesla."

Menta then asks these questions related to vehicles with aging batteries.  We think questions such as these are on the minds of all those who closely follow the electric vehicle industry

"The question going forward is this: what will the market bear to replace the batteries on a aging electric luxury car? What will a nine-year old Tesla Model S with 110,000 miles on it be worth with perfectly functioning batteries? What will it be worth if the batteries need replacement?"

In closing, we'd like to ask if you think Menta is on the right track here or if he is way off course.  Could it be that Tesla's actually thinking Roadster, Model S, Model X and eventually Gen 3 replacement batteries for the gigafactory?  It seems plausible and could be a lucrative side business for Tesla, right?  For sure the gigafactory will produce cells for new vehicles too, but could this replacement battery idea be BIG business for Tesla?

Source: MP3 Newswire