Batteries

Published on November 4th, 2015 | by James Ayre

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Tesla Gigafactory Ahead of Schedule, Battery Assembly Beginning This Quarter

November 4th, 2015 by  

Originally published on EV Obsession.

Work on the Gigafactory is running ahead of schedule, with a production line for Powerpacks and Powerwalls even being moved from the Fremont facility to an automated assembly line at the Gigafactory early in Quarter 4, according to Tesla’s most recent shareholder letter.

This follows the beginning of Tesla Energy production at the Fremont facility in Quarter 3. The long-term plan is for all production to be shifted to the Gigafactory, as opportunities to shift production capacity come along. Plans to expand energy product capacity as a whole have been accelerated in recent times as well, following very strong demand.

Gigafactory

Owing to the recent shift to production at the Gigafactory, some Tesla Energy production and deliveries previously scheduled for Quarter 4 2015 will be delayed until Quarter 1 2016.

Here are some further details and background from the new shareholder letter:

We are seeing very strong demand for Tesla Energy products globally, and particularly in Australia, Germany, and South Africa. To respond to these opportunities, we are growing our worldwide Tesla Energy sales team and are continuing to sign new business partnerships with utilities and energy companies. There is also an exciting market opportunity for us in India with strong government alignment that we look forward to growing in 2016. Recent changes to feed-in tariff structures in Hawaii also create a large new storage market in that state.

We have also accelerated plans to begin cell production for Tesla Energy products at the Gigafactory by the end of 2016. This is several quarters ahead of our initial plan. In conjunction with development of the Gigafactory, we recently signed two conditional purchase orders for lithium hydroxide in order to promote sourcing of this commodity at lower cost and with reduced environmental impact. We are planning on establishing further supplier arrangements with the intent of having a robust, flexible and cost effective supply chain in place for our long-term needs.

Hard to say that things don’t seem to be working out well for Tesla in this regard. Even those somewhat skeptical of some of the claims by Tesla and CEO Elon Musk must admit that the Gigafactory is (as of now anyways…) looking likely to meet expectations.

→ Related: Tesla Q3 Results & Numbers

→ Related: Tesla Q4 Plans & Expectations

→ Related: Tesla Reveals New CFO & New President Of Global Sales + Service


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About the Author

's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy. You can follow his work on Google+.



  • YeahRightPal

    Sure it is. Where are those battery packs now, in mid-2016?

    • Bob_Wallace

      Tesla apparently changed plans and started assembling grid and home storage packs at the Gigafactory first. That’s been going on since some time in 2015.

      There is one report that Panasonic has started producing cells at the factory which would be ahead of schedule. Apparently the almost 400,000 Tesla 3 reservations sped things up.

  • Steve N

    This is a great strategy by Tesla. Get part of your fixed costs and capex generating income ASAP. As a business owner, I always look at ways to start the cash flowing even before the project is complete.

  • John Moore

    Sorry, just saw answer below. Ignore solar panel question.

  • John Moore

    Anybody know when the soar panels go onto the roof? And the wind turbines?

  • newnodm

    “Hard to say that things don’t seem to be working out well for Tesla in this regard. Even those somewhat skeptical of some of the claims by Tesla and CEO Elon Musk must admit that the Gigafactory is (as of now anyways…) looking likely to meet expectations”

    Really? show me a timeline where the gigafactory is a full production by the end of 2020. If they were really on schedule for the whole project, we would see more than 14% under construction. They have burned through their capital at a higher than expected rate.

    • Matt

      “We have also accelerated plans to begin cell production for Tesla Energy products at the Gigafactory by the end of 2016. This is several quarters ahead of our initial plan.” I would read that as ahead of schedule. Will that rate continue, slow, or increase; we don’t know. Not show here, but I’ve seen elsewhere (IIRC) that construction ahead of schedule. Since I have not seen the capital rate they planned for the construction, or real detail of how far ahead they are; I can’t even guess if they are above or below expected construction costs.

  • Shiggity

    Skilled Craftsmen allowed this.

    Machinists / welders / advanced machine operators. The engineers / bankers like to take all the credit, but actually getting it done is highly skilled manufacturing based labor.

    @skilled labor – Thank you for going into the trades. Any no talent joke can take capital and leverage it for profit, that isn’t hard.

    Billionaires look good BECAUSE of skilled trade labor. They’ll say to their dying breath it was the other way around though. We all know that’s bullshit.

    • Kraylin

      What on earth are you going on about? Did you have a personal setback that requires you to diminish the work of others on some random online forum? Surely we can agree that without either “talented” group these companies would not exist…

      Look inside yourself, you may not like what you see, but hopefully you will at least learn from the experience.

    • Stephen Hodson

      This message has been brought to you by the Teamsters of America. And our letter of the day, ‘B’, boys and girls!

    • Elon noted on the call how impressed they were with the workforce building the Gigafactory.

      • Carl Raymond S

        It’s been a while since we’ve seen pics from the Gigafactory. A few new shots slip out today.

        James Lipman on Instagram: “#hypermodern #Tesla …

  • MarTams

    It is way past the 4th Quarter this year. Why can’t you mention 4th Quarter of which year from the title to the statements within your article?

    • Deep Time

      Agree. I thought Q4 2015 which is already 1/3 over.

      • DaveinOlyWA

        Dec 31st is the 4th quarter and we are a ways from that. what should it be called? there is nothing in the article that implies that this is happening on the first day of the 4th quarter… sorry but I have to be missing something cause your reactions are…”something”

    • Matt

      Yes, very misleading.
      Now how about some digging. GigaFactory is to be run on RE. PV on roof and wind farm in the hills. Any information of either of those fronts? I’ve been assuming where the PV would come from, given “family” ties. But have seen zero on the wind farm.

      • MorinMoss

        That’s in the longterm plan but it’s doubtful they’re going to put up the wind turbines before the plant is running steadily close to full capacity.
        Given the ties with Solar City and the insolation in Nevada, it’s much smarter to start with PV and run off the grid when dark or cloudy.

        I suspect they may not even install any PV until the factory is complete so could be a couple of years.

        • Matt

          Yes, SC is my assumption also. I really asking if there is a timeline yet.

          • Bob_Wallace

            I’d guess they are operating on “just in time” schedules. Wouldn’t make a lot of sense to install turbines/panels long before they are needed and pay interest on them.

      • Bob_Wallace

        Wind turbines can be stood very quickly. About three days per turbine. Why would Tesla install their wind component, or their seperate off-building solar array before the factory is ready to run.

        There’s no sense in installing the roof panels until it’s close to use time. Installing the roof panels is likely a project for only a few weeks. Time to start would be when the machinery starts to arrive, I would guess.

      • The shareholder statement makes sense, they will start making cells for power products at the end of 2016.

        The article itself indicates that production will start early 4th quarter 2015, i.e. before the building is complete. That makes much less sense. It doesn’t seem likely to occupy part of the building while the rest is still being constructed.

        If this facility provides extra capacity why would power product deliveries be delayed a quarter from q4 2015 to q1 2016? Adding capacity should accelerate timelines not cause delays unless you are poor at managing your production.

        • Frank

          The way I read it, and I could be wrong, is that they were going to start putting powerwall packs together in the factory this year, and start producing cells next year. Thoughts?

          • If that were true the headline should read Gigafactory behind schedule, not ahead of schedule.

            I believe the article put 2015 when it should have said 2016 and 2016 when it should have said 2017. Then the article lines up with shareholder statement.

            Based on the shareholder statement they won’t start fabricating squat until Q4 2016. Which is slightly ahead of the initial schedule when the factory was announced.

            http://fortune.com/2014/10/28/tesla-closes-on-free-nevada-land-for-gigafactory/

            “Battery production at the gigafactory is supposed to begin in 2017 and peak battery production should be reached when the gigafactory is fully complete in 2020.”

          • I’m honestly not sure where the confusion is. this is what I see (in both letter and article):

            1) Battery pack assembly is starting this quarter (updated title to clarify), ahead of schedule.
            2) Battery cell production is expected to start in about a year, several quarters ahead of schedule.

          • Frank

            Youtube has the Q3 2015 earnings call, which covers this. I read it right.

          • Yes, that’s how I read it, in the article and the letter.

          • Bob_Wallace

            Makes sense to me. You get the factory running on small scale, get all the operations stuff ironed out with a smaller number of employees.

      • Building inspections sequence?
        Panels can’t cover up un-inspected work?

    • Bob_Wallace

      We are only one month into Q4 of 2015.

      Tesla’s fiscal year is based on the calendar year.

    • DaveinOlyWA

      is the part of the title “This Quarter” too vague for you?

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