Sometime this week, Tesla CEO Elon Musk will announce everything there is to know about the EV automaker’s Gigafactory, from location and price tag, to its heavy reliance on renewable energy sources.
Autoblog Green reports the Gigafactory will be “heavily powered” by solar and wind energy sources, with older battery packs storing the collected energy. Meanwhile, the factory will mass-produce finished battery packs from raw lithium sources, with the aim of generating 30 gigawatt-hours annually. By taking advantage of economies of scale, costs should be reduced by 30 to 40 percent in the same timeframe needed to bring the $35,000 Model E from the drawing board to the showroom floor.
As for where the $2 billion-plus factory will be built, one rumored location is Nevada. Aside from the obvious solar power available for Musk’s green aspirations, the state also houses the sole commercial brine pool lithium production facility in the United States at this time, though more could be brought in from Wyoming’s recently discovered underground lithium brine in the state’s Rock Springs Uplift formation if needed.
Finally, funding for the Gigafactory could come from a number of sources, including new stock and alliances with other companies interested in what the factory — and the future — has to offer.
Tesla’s refusal to include a gasoline backup generator in the Model S is very similar to Doctor Emmet brown building a time machine that relied solely on the availability of Plutonium. If you get stuck, just how the hell are you supposed to get a Jiggawatt???
I belive Dr. Brown lamented that you could probably buy plutonium at any corner drug store in 1985. Largely proven false, but electrical outlets are far more common, and if Mr Musk gets his way, it should be easier to find a Supercharger station than sell a bomb casing full of used pinball machine parts to some Libyans. ;)
That exact same argument can be applied to the ICE. Its just that we have built up infrastructure and expectations(refueling times) around it…just like Tesla is trying to do with electric engines.
If I were to travel back in time to the 1950’s I’d still be able to get gas. Granted it wouldn’t be 93 octane, but gas nonetheless.
I don’t have time to wait for lightning to strike the clocktower to recharge my Model S.
Travel back to 1850 and see how much your ICE will help you ;)
What was or wasn’t available 60 years ago+ is pointless as Tesla or Musk is not building a time machine nor were they selling cars 60 years ago (or even alive for that matter). It is about now and the future.
@BTR: You have to give up on the ICE backup theme; that’s what a hybrid is, and lots of people do this already. Tesla’s foundational core is pure electric propulsion. If you’re uncomfortable with this, you shouldn’t hold their stock.
Asking Tesla to incorporate an ICE is like asking an Apple device to run WinOS – not gonna happen.
As a Leaf driver, I’ve learned what other EV drivers have also learned – to plan well. This is why you never see electric cars stuck on the side of the highway. EV driving is not care-free, no matter how long the range claim is.
Until refill speeds approach the rate of gasoline fill-ups, good planning will always be a vital component of EV driving.
Nice simile, but reversed. An Apple device (the Mac) CAN run Windows–natively even, but you’ll never see OS X running natively on a non-Apple PC.
Rather, while you’re fully correct that Tesla will almost certainly never put an ICE in any of their cars, like Apple, they’ll force the others to adapt however they can just to compete.
I’ve read the Tesla reviews and they sure are impressive. Aside from them just being gorgeous, they’ve got more immediate torque than the torquiest V8, highest crash ratings of any car (pretty much ever.) Range isn’t even the bugaboo it used to be; most people don’t need more than 100-150 miles a day. Shame they keep catching on fire…
Shame they cost twice as much as a similarly equipped I.C.E vehicle.
not true.
the Tesla competes against the big motor E class and the BMW 550i, both of which start at $63k. The gonzon Tesla rolls in at the high $90K range and competes against the AMG E class and the M5, both of which are about the same price…. and slower.
so yeah, it’s more coin than a Festiva, but it’s price is market appropriate.
With a 2 to 3 month order backlog, the market has spoken regarding the price and the electric only drivetrain.
“The Tesla competes against the big motor E class and the BMW 550i, both of which start at $63k.”
The $85,000 and $100,000 model S might compete against those German cars, but a buyer would get wayyyy more out of an Impala, Genesis, CTS, XTS or 300 for a whole lot less.
If they want an Impala, Genesis, CTS, XTS or 300, I imagine they will buy one. If they want a Tesla they will buy that. I drive an older Chrysler, and I like it. But my next car will likely be a Honda. It takes all kinds. Just because you like barges, does not mean that all people do.
This is curious. Tesla is using industry-standard cells to minimize cost. Much of the margin must already be squeezed out of them. How does a $2 billion investment to insource something that’s already cheap pay off?
I think part of the reason is to recycle old battery packs to drop the price further.
That makes some sense but shouldn’t we be some years away from having copious amounts of old packs to recycle? Your observation improves the outlook but it still seems rather a stretch. Why not outsouce reconditioning/recycling? Mmm… perhaps there’s liability issues.
Since it can be paid for indirectly through the (inflated) stock price, it essentially costs the company nothing to do this.
It’s a smart play. Even if it doesn’t produce any savings, it adds a useful asset to the balance sheet and provides tangible value to the company at essentially no cost. At the very least, it makes the company more attractive as an acquisition target, which is the logical end game here.
“How does a $2 billion investment to insource something that’s already cheap pay off?”
Are you sure they’re “cheap”? Think about the batteries you replace in your laptop PC? How much does one battery pack cost–about $65? But a car–especially a BEV–needs the equivalent of hundreds, if not thousands of such battery packs. We already know that the pack for a Toyota Prius runs about $7K and Nissan has chosen to “lease” the battery packs for the Leaf due to their high replacement cost. Yet, if you look at how such batteries are made, the process isn’t really all that difficult or expensive; the makers are earning massive profits off of making those little cells.
So, how does a $2billion investment pay off? By cutting the cost of acquisition to the bare bones and kicking the traditional battery makers in the tail. There’s also the likelihood that they can custom design their cells for more capacity in a different size or shape that would make them even more efficient. Rather than relying on a company that chooses to do something their own way or wants a higher price for a custom design, you can do it yourself for less and with a well-established mine a relatively short distance away, there’s fewer and lower transport fees to worry about. All in all, that investment could pay itself off remarkably quickly not only by reducing costs, but by selling surplus production at an equitable rate.
“Cheap” because they’re a commodity item made in mass quantity. There’s typically not a lot of margin in such a thing.
Maybe there’s more IP in the cells or the manufacturing process than I suspect but Tesla went with them to save money, so “cheap” suggests itself.
“We already know that the pack for a Toyota Prius runs about $7K”
How do we know this?
If they pull this off it will really be quite impressive. It is a HUGE gamble but Tesla really has no choice.
Tesla has now come to a decision point. How can the factory be financed while still building out a recharging infrastructure, continuing to develop new product, AND OWNING ITS OWN SALES POINTS.
How long will it take to build this plant. As a NV resident, there is only one place that makes sense. I thought the Model X is due long before this plant can be completed. This sounds like a minimum of a 3 year project. $2 BILLION?
>> How can the factory be financed while still building out a recharging infrastructure,
They’re partnering with Panasonic and Sanyo on the factory. It’s not a solo venture.
TSLA’s too rich for my blood but maybe I should buy into one of the partners.
it’s good market strategy, too.
if they can get the unit price of EV batteries down 40%, then the true profit won’t come from selling Teslas, it’ll come from the rest of the OEM’s beating a path to their door waving dollar bills for battery contracts. Maybe even a few cell phone makers (hey, didn’t apple’s top corporate buyer stop by Tesla earier this year? doesn’t apple have a ‘thing’ about keeping all hard and software work in-house?)
Tesla makes cars, but for a very long time, they made the real money selling credits and doing outsource work for other car makers.
$2B is real money for a car maker, but it’s chump chage for some of our larger tech companies.
Don’t forget that Musk is a director on the board of solarcity which – yes – makes solar powered electrical systems for home and industrial applications. It pays for all installation/materials up front and is repaid by the cost of the electricity generated. They have been experimenting with storage solutions.
So here’s how this works: The new plant gets free solar installation, uses old Tesla packs for storage, the resultant findings are used by SolarCity for future projects.
Musk’s world is a wonderful world.
“Vertical” integration is great, until it gets monopoly pricing power.. Here’s hoping Musk doesn’t go that way..
A monopoly in itself is not illegal. Misusing that power to drive certain markets is. I don’t think Tesla needs to worry about THAT particular problem just yet.
This will be interesting to watch. Wholesale costs for power from a gas plant varies with gas prices but 6-10 c/kWh is in the ball park. Solar PV and wind 15-25 c (with taxpayer and ratepayer subsidies).
On the negative side, new lithium batteries are in the ball park of 50% efficiency (2 kWh in 1 kWh out), older ones are less efficient. On the plus side, batteries add some value in being able to time shift wind energy.
Tesla has been able to use the political process to get ICE auto buyers to subsidize the company. (selling ZEV credits)
What do you bet we will be subsidizing power for the factory in the form of… oh say… A grant for “Investing in the power system of the future”
If some sort of govt subsidy happens for the Gigafactory, isn’t that functionally pretty similar to the sweetheart deals that states and municipalities often throw at companies to build factories within their jurisdictions? It might not be an exact analog, but both involve public (i.e., taxpayer) support for a private undertaking.
“On the negative side, new lithium batteries are in the ball park of 50% efficiency (2 kWh in 1 kWh out),”
WTF? LiIon batteries are greater than 90% efficient.
.
.
In manufacturing or charging?
Charge efficiency.
And manufacturing is remarkably simple.
First off, these Lithium Ion batteries are NOT batteries in the truest sense; they do not generate any electricity on their own. Instead, they are high-value capacitors, able to take a charge at a high rate and then discharge through a different circuit at a controlled rate. Lithium is the metal that lets this work so efficiently compared to the old aluminum, copper and other metals used in most other capacitors.
Interesting, but completely irrelevant.
.
.
Really? To hear some speak of the supposed environmental impact of lithium battery production, you’d think they were strip-mining mountains for the stuff.
Oops, they are doing that, aren’t they–for coal, that is.
I wonder if renewables will be enough. It might be for the offices and computers but even the employee cafeteria will use far more energy and the manufacturing process requires vast amounts of electricity to make a car. For example, the solar panels on Ellens Energy Adventure at Epcot only run the ride vehicles – the air conditioning, the movies, animatronics and show effects are all run from the grid. They probably will be close to Hoover dam and Palo Verde Nuclear plants though.
Where are the engineers needed to run this plant going to come from? Who wants to work in rural Nevada?
.
.
It sure beats rural China..
I wouldn’t mind. I enjoyed Nevada when I worked there before–for the Air Force.
Well Tesla does have the world’s best hype and entertainment department. Got to have some announcement every month to keep the share price up and to show what genius is leading the charge to a brighter and better future.
Seems to be working so far.
Funny how so like an anti-Apple zealot’s comment that sounds.
Musk’s dream isn’t possible without massive government “incentives”.
I suspect he’ll get them too.
Is that really so different from foreign companies’ dreams of opening a factory in the US, with state and municipal governments falling all over each other to offer massive incentives to site the factories in their jurisdictions? Those companies aren’t experiments-in-progress the way Tesla is, but that cuts both ways. They’re typically very well capitalized already and don’t actually need the largesse that’s desperately heaved at them. We ultimately pay for all those tax breaks and sweetheart deals, too.
Personally, I think it’s reasonable for govt to do both things, but my point is that they seem pretty close to equivalent, even though one tilts more federal, the other more state and municipal.
Unlike the new VW plant in Chattanooga, which was built and paid for solely by the… oh wait. Nevermind.
Here’s a listing of all of them through 2008, according to Good Jobs First. In the words of the organizations Executive Director “the vast majority of subsidies to foreign auto plants were taxpayer gifts such as property and sales tax exemptions, income tax credits, infrastructure aid, land discounts, and training grants.”
Subsidies include:
• Honda, Marysville, Ohio, 1980, $27 million*
• Nissan, Smyrna, Tenn., 1980, $233 million**
• Toyota, Georgetown, Ky., 1985, $147 million
• Honda, Anna, Ohio, 1985, $27 million*
• Subaru, Lafayette, Ind., 1986, $94 million
• Honda, East Liberty, Ohio, 1987, $27 million*
• BMW, Spartanburg, S.C., 1992, $150 million
• Mercedes-Benz, Vance, Ala., 1993, $258 million
• Toyota, Princeton, Ind., 1995, $30 million
• Nissan, Decherd, Tenn., 1995, $200 million**
• Toyota, Buffalo, W.Va., 1996, more than $15 million
• Honda, Lincoln, Ala., 1999, $248 million
• Nissan, Canton, Miss., 2000, $295 million
• Toyota, Huntsville, Ala., 2001, $30 million
• Hyundai, Montgomery, Ala., 2002, $252 million
• Toyota, San Antonio, Texas, 2003, $133 million
• Kia, West Point, Ga., 2006, $400 million
• Honda, Greensburg, Ind., 2006, $141 million
• Toyota, Blue Springs, Miss., 2007, $300 million
• Volkswagen, Chattanooga, Tenn., 2008, $577 million
Total: more than $3.58 billion
* total of direct subsidies to all Honda facilities in Ohio
** includes about $200 million for expansions of Smyrna and Decherd plants
List does not include joint ventures with U.S. companies
This data does not include any estimate of subsidies granted to hundreds of foreign-owned auto supply companies that have located in the same areas, virtually all of which were also heavily subsidized.
About two years ago, I went to Tesla’s Canadian website.
There I was informed that the reason Teslas cost more in Canada than the US was due to Canada’s 6% import duty.
Utter falsehood. The car is made in California. The USA is part of NAFTA, so no import duty at all in Canada.
I figured if they could get away with such incompetence so blatantly, they were not an entity to be trusted, and haven’t been back to see whether they woke up.
Not interested.
Umm… I believe there’s also a notable difference between the value of the Canadian dollar to the US dollar–maybe enough to balance that 6% difference? I understand everything is more expensive up there–as compared to their US price.
http://www.cbsa-asfc.gc.ca/publications/pub/bsf5048-eng.html#s5
Example
2010 model year automobile
Purchase price
(includes invoice price and state taxes) US$50,000
Value for duty (price converted to Canadian currency at
current rate of exchange: $50,000.00 x 1.05*) CAN$52,500
Duty at 0% 0
Excise tax on air conditioner $100
Excise tax on Green Levy $1,000
$1,100 $1,100
Value for tax (value + duty + excise tax) $53,600
GST ($53,600 × 5%) $2,680
Total cost $56,280
Total duties and taxes paid to CBSA $3,780
3780/50000 = 7.56%
Presumably Teslas aren’t penalized by a Green Levy?
Perhaps they didn’t have stores in Canada two years ago, which would have required dealing with RIV to do a personal import. The 5% federal GST would be included in the duty.