TECH 988 views
Tesla $5B Gigafactory Bombshell: 500,000 Cars By 2020
As anticipated earlier, Tesla took the wraps off its proposed battery Gigafactory today while also announcing plans to raise up to $1.6 billion in convertible-debt financing. The reason the company needs so much money is that it anticipates investing upwards of $2 billion toward the $4-5 billion it says the plant will require by 2020. By that time, the company says it should be churning out enough batteries for 500,000 Tesla vehicles annually. All those batteries together are more than the entire worldwide production of lithium-ion cells in 2013.
The remaining billions are coming from partners in the facility. Tesla didn’t announce anyone today, but with reports that Panasonic is putting up $1 billion initially it’s not entirely clear that anyone else is needed. Some investment will be upfront and some will be ongoing as capacity expands over time. The plant is expected to employ 6,500 workers and Tesla is considering sites in Arizona, Nevada, New Mexico and Texas for the 10-million square-foot facility. What’s strange is that Texas is one of a handful of states where Tesla is currently prevented from selling its cars directly to customers through its own dealerships — currently the only way it does business. (You can purchase a Tesla in Texas, you just have to do it on your own, via the website.)
When a law proposing to ban that model came up in Ohio, the company made it clear that future manufacturing would not come to any state that was getting in the way of how Tesla wanted to operate. James Chen, the company’s vice president for regulatory affairs, told the Columbus Dispatch that a possible truck manufacturing plant — something Tesla is looking at down the road — would certainly not come to Ohio if the bill to ban Tesla sales passed. That same Dispatch article quoted CEO Elon Musk saying something very similar about Texas to Automotive News in April: ”[Texas] would be a leading candidate for the truck plant” if lawmakers eased franchise restrictions.
Attempts to reach Tesla were unsuccessful, but it does seem unlikely that Texas will get the plant unless (1) the dealer law is changed or (2) some other overwhelmingly compelling incentive is provided. And given the scope of the project, that’s certainly possible. Tesla hopes to power the plant mostly with nearby solar and wind power and expects to need up to 1,000 acres for the facilities. Some interesting tidbits that are buried in the announcement:
- Though the plant will be making 35 gigawatt-hours worth of cells by 2020, it will be making 50 gigawatt-hours worth of battery packs. Panasonic currently makes a total of only about 6-7 gigawatt-hours worth of batteries elsewhere. While previous deals between the two companies have called for that to increase significantly, it’s clear that Tesla is expecting the Gigafactory to receive finished cells from other sources for conversion into packs. This means pack production will be centralized into one location, regardless of the source of the battery cells.
- Sun is becoming an asset for manufacturing if one is committed to renewable energy. The states under consideration have among the best solar resources in the country. Texas also has an especially good wind resource. The absence of California on the list might speak to the company’s goal of diversifying its manufacturing base outside of one state, or it might have been the reasonable fear the environmental reviews could have delayed the project unacceptably long.
- Battery pack costs are expected to fall significantly thanks to the plant. “By the end of the first year of volume production of our mass market vehicle, we expect the Gigafactory will have driven down the per kWh cost of our battery pack by more than 30 percent,” it said in a post. The larger battery in the Model S costs the company something on the order of $17,000, based on an estimate Musk provided more than a year ago. It seems probable the Gigafactory will allow Tesla to build the smaller 60-kilowatt battery for below $10,000 and the larger one for perhaps not much above that figure.
Process flow at the Gigafactory. Everything from materials input to recycling is included
Whoa, great weblog formatting! Just how very long have you been posting regarding? you have made writing a blog peek easy. The entire glimpse of one’s web site is actually superb, since efficiently as the content material!