Where Will Telsa Build Its Gigafactory?

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Originally published on the ECOreport.

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

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.”

The Facts:

  • 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.

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)

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Roy L Hales

is the President of Cortes Community Radio , CKTZ 89.5 FM, where he has hosted a half hour program since 2014, and editor of the Cortes Currents (formerly the ECOreport), a website dedicated to exploring how our lifestyle choices and technologies affect the West Coast of British Columbia. He is a research junkie who has written over 2,000 articles since he was first published in 1982. Roy lives on Cortes Island, BC, Canada.

Roy L Hales has 441 posts and counting. See all posts by Roy L Hales

12 thoughts on “Where Will Telsa Build Its Gigafactory?

  • He should build it in the states, going against conventional wisdom….

    • Manufacturing at home, in America? Madness.

      Hopefully those dealer associations will win their fight to put a cutting edge, expanding American car manufacturer out of business before they create any more jobs at home.

  • Only real Lithium reserves in the US are in Nevada. Union Pacific rail runs through northern Nevada into the Bay Area and Tesla’s factory. Suspect that NM is simply a ruse and Nevada will be the target.

    • Wyoming has a lithium reserve larger than Nevada.

    • Interesting and insightful correlation. Thanks for sharing.

    • Wyoming. Plus North Carolina and California.

    • In an interview I watched with Elon, the reporter stated that someone said that there was not enough lithium or nickel to make the batteries he needed. He laughed and said that there was enough lithium and nickel in Bolivia to power the world with batteries. I believe we should look at the big picture when it comes to the location of this factory. I believe lithium and nickel will also be imported to this factory. That will be a factor when it comes to location. I can’t wait to find out where it is!

  • Charge those giga quantities of EV batteries with a solar powered EV charger equipped with high efficiency Hyper X Solar panels. Hyper X solar offers a better PTC to STC ratio “Real World” performance according to the California Energy Commission’s performance rating listings than over 100 of SunPower’s solar panel models. Hyper X solar also offers an incredible -0.27%/degree C temperature coefficient rating for awesome performance in hot/warm climates and best of all Hyper X solar systems are priced thousands less and even tens of thousands less on larger systems than a SunPower solar system.

  • “That is, unless Musk is doing something totally different with Apple. The computer giant has shown considerable interest in new and advanced battery technologies.”

    This factory will first and foremost be for advancing battery production technology. They will start it up with a trusted chemistry. Probably a slightly improved version of the one they are using now, licensed from Panasonic. Moving to newer chemistries is step 2.

    I don’t think a partnership with Apple will help either one. It would require separate production lines to produce the various, small form factors they need for their gadgets. And the amounts (in kWh) would be puny, compared to the scale of automotive battery production. These are very different markets.

    • Tesla uses large concentrations of laptop batteries doesn’t it?

      It wouldn’t be too hard to set up a li-ion production area to make batteries for Apple and get backing from the worlds largest company.

  • The Super Giga factory should be located in China, where the biggest Li deposits are. The factory building operation could be financed by overseas money (profits taxed at low rates). The shiploads of Model S’s from the US to China could take batteries back from China to the USA. The ships must return anyway. Right now, though, a “small” factory within Tesla’s way too big building would allow development/design intimately close to the Tesla factory and would suffice for the time being.
    Of course, most trade is yuan way from China to here right now, but that could change and Tesla could even consider buying ships, perhaps surplus Honda/Toyota ships when Tesla knocks their socks off?

  • The people in New Mexico are not smart enough for a factory like this, Just ask Intuit ! There is nothing in New Mexico for Tesla.

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