This week’s Tesla Teaser is the Gigafactory. Everybody’s talking about it. Batteries are the most expensive part of an electric vehicle (EV) and this could be the key that makes Teslas affordable for the masses.
“It’s the future of the company,” said Craig Irwin, analyst with Wedbush Securities. “They need to cut the cost of the battery in half in order to make a half-million cars. This is how they are going to do it.”
- Tesla sold 22,477 cars in 2013.
- They will have to increase production from 600 to 1,000 cars a week to meet their goal of 35,000 cars this year.
- Tesla is not manufacturing enough cars to meet demand, largely because of battery supply constraints, and they want to build a new factory.
In a letter to its shareholders, the company stated, “Very shortly, we will be ready to share more information about the Tesla Gigafactory. This will allow us to achieve a major reduction in the cost of our battery packs and accelerate the pace of battery innovation. Working in partnership with our suppliers, we plan to integrate precursor material, cell, module and pack production into one facility. With this facility, we feel highly confident of being able to create a compelling and affordable electric car in approximately three years. This will also allow us to address the solar power industry’s need for a massive volume of stationary battery packs.”
CEO Elon Musk told reporters, “This is going to be a very green factory. There is going to be a lot of solar power. It’s going to have essentially zero emissions and there are no toxic elements that are going to come out of this factory and we will build in recycling capability right into the factory. It is going to be a really giant facility, like say we are doing something that’s comparable to all lithium-ion production in the world in one factory.”
Tesla is going to have to build something BIG to ramp up production. They want to sell 30-35% of those 35,000 Teslas in China. (China has surpassed the US to be the world’s biggest automotive consumer and Tesla is poised to cash in this new market.)
Depending on who is talking, the Gigafactory is going to cost somewhere between $2 billion and $10 billion.
Trip Chowdhry, managing director of equity research at Global Equities, told the Albuquerque Journal on Friday that Tesla will announce plans to build a facility somewhere in New Mexico.
A columnist in the Reno Memo wrote that “Two sources have confirmed that Tesla Motors is exploring sites in Northern Nevada” Someone who knew about Tesla’s activities said the New Mexico rumor may not be “entirely accurate” and “a second official said Tesla representatives visited Reno ‘a few months ago’ to explore sites at the Stead airport and at the Tahoe-Reno Industrial Center east of Reno.”
Tesla spokesman Patrick Jones declined to confirm the company’s interest in Nevada. “We don’t have a public comment on that subject at this time,” he said.
Tesla probably get A LOT more press that way.
Some big names are being tossed around in connection to the Gigafactory. Tesla’s current battery provider, Panasonic, will probably be involved. Maybe Sony???
That is, unless Musk is doing something totally different with Apple. The computer giant has shown considerable interest in new and advanced battery technologies. Hmmm, could that be what the two companies were meeting about?
“We had conversations with Apple,” Musk told Bloomberg TV’s Betty Liu and then proceeded to answer her questions in a way that did not confirm or deny anything.
Tesla is expected to reveal the Gigafactory’s location this week.
Then what, another teaser?
(Image at top of page: a factory tour after the Model S drive on the track. This one installs the laminated glass roof. It’s amazing how much brighter the factory looks after the floor has been epoxied white, just like they have at SpaceX… and Ironman – Flickr: Tesla Autobots Author: Steve Jurvetson , courtesy Wikipedia)