Will The Tesla Gigafactory Turn On Early?

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Update: If you’re not familiar with it, familiarize yourself with Hofstadter’s law.

It’s no secret — Tesla doesn’t have a history of hitting its timelines. It’s also no secret that construction projects often run behind schedule. So, it would be quite idealistic to think Tesla would finish its (first) Gigafactory on time, let alone ahead of schedule. However, a Tesla official has reportedly said that it will be done ahead of time and operations will actually begin in 2016. Wow! That would be awesome. But let’s also remember that only about $53 million of the projected $5 billion that is going into this factory seems to have been spent to date… so, we’re still at the early stages, and there’s a lot of room for things to go wrong. Nonetheless, my hopes have been raised. Here are some more deets from an EV Obsession repost.

The Tesla Gigafactory will reportedly start operations in 2016, rather than 2017 — a bit early. A Tesla official supposedly made such a statement in Japan on Friday.

gigafactory_aerialThe Gigafactory has been ahead of schedule at least since its site in Nevada was determined, but whether that would eventually translate into the Gigafactory being done ahead of schedule has always been questionable… and despite reports of the recent statement from a Tesla official, this is still very much questionable. I think almost everyone knows that construction projects often go over schedule and over budget, and there’s plenty of time for things to go wrong and Tesla to get behind schedule. Nonetheless, a statement that it will be done in 2016 sounds good!

According to Nikkei, “The plant’s launch will be accelerated to bring down production costs through economies of scale, said Kurt Kelty, who oversees battery technologies at Tesla.”

Tesla Gigafactory

Based on the limited statements from Tesla CEO and Product Architect Elon Musk and crew in the recent quarterly conference call, it didn’t seem the Tesla Model 3 would be done early, however. So, Tesla will likely need some other revenue streams to support initial production and operations. As I reported just yesterday, Elon stated on the conference call that Tesla would be unveiling a home battery storage product in a month or two. Tesla is also bidding on grid storage projects, and will be producing a large number of Model S and Model X vehicles by 2016, so hopefully it won’t run into a supply glut before the Model 3 is ready.

All in all, everything seems to be falling into place as planned.

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Zachary Shahan

Zach is tryin' to help society help itself one word at a time. He spends most of his time here on CleanTechnica as its director, chief editor, and CEO. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, Canada, and Curaçao. Zach has long-term investments in Tesla [TSLA], NIO [NIO], Xpeng [XPEV], Ford [F], ChargePoint [CHPT], Amazon [AMZN], Piedmont Lithium [PLL], Lithium Americas [LAC], Albemarle Corporation [ALB], Nouveau Monde Graphite [NMGRF], Talon Metals [TLOFF], Arclight Clean Transition Corp [ACTC], and Starbucks [SBUX]. But he does not offer (explicitly or implicitly) investment advice of any sort.

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20 thoughts on “Will The Tesla Gigafactory Turn On Early?

  • I think as long as tesla doesn’t run into a valuation problem or spending to much issues and gets the model 3 out on time( crustal), then between 2020-2023 tesla will be building between 1 and 2 more gigafactories to meet car demand( theirs and other manufacturers), residential storage demand and grid scale.
    One other crucial step for the batteries and cars will be moving to solid state li- ion batteries for greater range/ energy density, which would mean greater range from a smaller battery pack and less weight and size for battery cooling/ controls.
    Battery system cost/ size/ weight all way down.

  • There is also the possibility of “partial operation” early. It would be uneconomical to have infrastructure of that size and cost doing nothing while interest and payments are being demanded. Tesla needs to move like their hair was on fire.
    The home battery packs are child’s play for their engineers. They make a higher margin on simple battery packs than the cars. So I can see ten percent of floor space pumping out home battery packs six months from now. Lets pray that they price them sensibly rather than like the German Bosch and Sony battery packs at over $1000kwh! By the way, Sony is probably the earliest developer of the lithium “olivine” battery (back in the 90’s). They claim 8000 cycles at 100% discharge on their home battery. It is available in Germany but is about $13,000 for 10 kwh pack. Ridiculous. Those prices just can’t be justified with U.S. grid prices.

    • Musk is all about iteration. Expect 1/3rd of the plant to get finished out, then the lessons learned applied to the next 2/3rds.

  • If it can be done then Tesla will do it. There will be a lengthy ramp up so I expect them to start small and sell those batteries at a higher price.
    I also expect that Tesla will introduce upgraded battery packs for the Model S and Model X before we see a production Model 3 hit the road. That way they can sell those early batteries for a higher price point to people that can afford it. Early Battery Adopters.

  • Wondering when the building(shell) will be completed, lock up stage in construction terms?
    What year/ month for that stage?

    • With a building that size there are many paths to completion. If willing to add a temporary wall could close off 1/4, 1/3 of the building and finish its inside so they could begin. I would think they would go for the corp/biz storage first, since there is more money (demand, backup, etc) there than in home. There are a lot of schedules in a project this size. Also did the $5b include the solar panels and wind farm in the background?

  • “Tesla is also bidding on grid storage projects,” This could be pretty significant does anyone have details? The could make a large profit margin, perhaps even greater than by putting their batteries in their cars if their price per kWH is right.

    • No, seems to all be locked away behind closed doors. But maybe an insider here wants to leak some info 😀

      But JB said that they were bidding on all of them, or something along those lines.

      • By 2020 Tesla wants to produce 35GWh of batteries and assemble 50GWh of battery packs. Using 85kWh battery packs that would be enough for 588235 Model S. But since a lot of those battery packs are for the upcoming Model 3 (smaller battery), they can probably equip a lot more cars than that.
        So they should have plenty of capacity to dedicate to grid storage.

        Or maybe I’m all wrong and demand will be so strong, that they need to put all their capcity towards cars. The next few years will be interesting for sure… 🙂

  • The building shell is only part of the issue. The equipment installation is expected to take a full year as well and then 4 years to ramp up production and sales to the full 500K. A modern factory is a complex operation and they have to work out the flow and timings of everything. In anything this complex and new, there are inevitable glitches. Here is a timeline from Tesla from their document:


      • Thanks for the link. Lots of other good links on that page like “The Planning Fallacy” http://en.wikipedia.org/wiki/Planning_fallacy

        My own personal relevant story: 6 of us were working on a hardware-software project and our manager asked us for time estimates. We all estimated about a month and then tripled it before giving it to the manager. He doubled that to 6 months and gave it to the director who in turn doubled it to a year. Us worker bees were all feeling happy wondering what we were going to do with all our free time and how great it would feel to get a project in early for once. Any experienced engineer knows what happened. We barely made the year estimate – and only with 80-hour weeks and sleeping on the lab floor when we were too tired to drive home.


        Murphy was an optimist.

  • Llithium is a commodity and operations to produce it have been growing, buying a production company isn’t needed at all.

    • Their is benefit to sourcing material components outside the traditional commodity market..Mining and refining have enormous initial capital expenditures having a steady reliable sourced consumer has a lot appeal. The value of a steady customer often outweighs the benefit short profits in an open market volatile market. Direct relationships also eliminate Third,fourth and fith parties… Look at Tesla relationship with Panasonic. Panasonic is sacrificing profit per unit but in return they reliable loyal high volume customer that is growing.. Tesla and Panasonic have removed themselves from the 18650 open market and both companies are winning because of it. Mmining and or refinery companies could benefit in a similar way.

      • Well one way of getting Lithium is by way of geothermal operations, from what I have read.
        That would be a win, win win, getting the Lithium, getting base load power and be good for the planet!

        • The water that’s coming up from the Salton Sea area geothermal wells is high in lithium content. There’s a company trying to get into the business of extracting commercial levels of lithium from the geothermal plant outflows.

  • Has the chemistry been decided on for the Gigafactory batteries? Can we expect any improvement over the batteries currently being used?

  • He may single handedly save the entire biosphere, incredible, exceptional, wonderful.

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