Thứ Ba, 1 tháng 11, 2016

Tesla Gigafactory Investor Thread part 5

  • Apr 7, 2014
    dalalsid
    Why Google or Apple or anyone would be interested in the GF is not for consumer device batteries but for energy storage batteries for their data centers IMHO. Every tech company would like to go 100% green with self produced energy and the GF could pave the path for that.
    �
  • Apr 7, 2014
    DaveT
  • Apr 7, 2014
    dalalsid
  • Apr 7, 2014
    DaveT
    This is from Apple - Environment - Renewable Energy :

    "Our data center in Maiden, North Carolina, exemplifies our approach to environmental responsibility. It was designed from the ground up for energy efficiency, and it has earned the coveted LEED Platinum certification from the U.S. Green Building Council � to our knowledge, something no other data center of this size has achieved. In 2012, we completed construction on the nation�s largest end user�owned, onsite solar photovoltaic array on land surrounding the data center. This 100-acre, 20-megawatt (MW) facility has an annual production capacity of 42 million kWh of clean, low-carbon, renewable energy. And we built a second 20-MW solar photovoltaic facility on nearby land that became operational in October 2013. In addition, we�ve built an onsite 10-MW fuel cell installation that uses directed biogas and provides more than 83 million kWh of 24/7 baseload renewable energy annually � it�s the largest non?utility fuel cell installation operating anywhere in the country. All told, Apple will be producing enough onsite renewable energy � 167 million kWh � to power the equivalent of 13,600 homes per year. These power sources are connected to the local energy grid and not only displace other dirtier forms of electricity that otherwise would have been used, but their environmental benefits are used only by Apple and are in addition to any locally mandated renewable energy requirements."?

    So for their NC data center, it looks like solar provides 84 million kWh per year and full cells provide 83 million kWh per year. While it appears they're connected to the grid, I'm guessing that Apple probably uses a lot of the power themselves - solar during the day and fuel cells at night.
    �
  • Apr 7, 2014
    SteveG3
    I see where DaveT is coming from as to the limited benefit to Apple of GFactory involvement when you look at the iphone, macs, and ipads.

    while I wouldn't bank on this, there is another dimension to the story. according to Apple board member (and J Crew CEO), Mickey Drexler, "Steve's dream before he died was to build an icar."

    Steve Jobs Wanted to build an icar - Business Insider

    John Markoff of the New York Times was reported as saying that Jobs told him he'd wanted to take on Detroit before he died and create an icar.

    Steve Jobs Said He Wanted Apple To Eventually Make A Car - Business Insider

    this came from 5 minutes of googling, there's likely more out there about Job's interest in making a car, and maybe this is already widely known among many of you. does 2014 Apple want to build a car? who knows. but if this really was a dream of Steve Jobs, and one he shared with some of those around him, it's hard to imagine that it does not cross the minds of some at Apple today in positions of influence. these are the very people he likely shared the idea with. I'd have to imagine at times it gets discussed... given the past year of focus on Tesla, how could Tesla (I'd say the biggest tech story of 2013) not be discussed at Apple, and for whatever circle at Apple that knew this was Jobs' dream, how could "what if" about Apple not ever come up among them? seems quite likely designing and building a better car was already a dream for many of the engineers and designers at a place like Apple, without any need of factoring Jobs in. finally, seeing established automakers basically blowing off EVs, I think would only make people at Apple more motivated. in addition to the disruptive, creative, visionary Silicon Valley DNA, at some level they must have an awareness that if the incumbent automakers don't go for EVs, who other than Apple has a big enough pile of cash to startup an auto venture with a real chance of success so more EVs get out on the road? What do they have, $160 billion in cash? for what?

    well, I guess Google also has enough cash. I didn't really look into whether they've talked about making a car at this hour, but we're all aware of their interest in self-driving cars.

    for Google or Apple, just the idea that the other might make this move (or Samsung for that matter), brings more motivation to not be "outmaneuvered".

    either of these giants deciding to enter the EV space fits with Elon's fundamental goal, accelerating the advent of EVs (especially given the lack of movement of the incumbent automakers), and his short term need... partnership in the Giga Factory.

    so, sure, totally speculative, but if Apple (or Google) dreams of doing a car, Tesla definitely has something to offer. not fighting over Gigafactory #1's limited capacity, but getting in on attractive licensing of Tesla's IP, and in partnership with Tesla pushing forward battery technology with a talent rich battery joint venture, and accelerating the timeline to Gigafactory #2, 3,... FWIW, as I understand it, it would be decades before Tesla and a big player like Apple would be supplying EVs to a level that they'd be competing with each other rather than together replacing ICE marketshare with EVs.

    so while I'm not trying to say this is the most likely outcome, if Panasonic isn't working out the way Elon had hoped, he's done pretty well at turning challenges into opportunities.
    �
  • Apr 7, 2014
    DaveT
    Thanks for your thoughts, SteveG3.

    I've been an avid follower of Apple and Steve Jobs over the years and was aware of his wish to build a car (it was in his biography). Last year, I thought several times that if Steve Jobs was around he might have made an acquisition of Tesla a reality (ie., when TSLA was under $100). But I don't think their current leadership has the same boldness as Steve Jobs. Tim Cook is much more calculated and predictable IMO.

    I personally think that Google and Apple missed their opportunity with Tesla. Back in late 2012 and early 2013, I think there were two huge opportunities:

    1. Apple or Google could have bought 30% of TSLA by investing $1 billion (or maybe a bit more) to buy TSLA stock (at that time TSLA at $30 had a market cap of $3.5 billion).
    I remember back when Tesla was at $3.5 billion, I was telling my wife that Apple or Google or Berkshire Hathaway ought to buy up $1 billion of TSLA stock. Google's founders (Larry and Sergey) even owned Tesla Roadsters and Model S's (they were early Tesla investors as well). They were privy to information and knew very well the potential of Tesla. It was confusing to me why they wouldn't invest some of Google's money into Tesla to own a big part of the future of the auto industry. But when I think about it now, I don't think Google (or Apple) is very interested in actually building cars. Google is more interested in building the operating system of the future car (ie., autonomous driving operating system) and they're more than willing to work with existing auto manufacturers. Apple, on the other hand, IMO doesn't have the ambition to go into cars. Steve Jobs left them a legacy of Apple being a "mobile devices company" and I think that's where they're headed (ie., phones, tablets, wearables, etc). For Apple to build cars would be a huge transformation in their DNA/mission/focus, that it would require a huge visionary leader to pull that off. Again, I don't think Apple has that kind of leadership currently.

    2. Apple or Google could have acquired TSLA by paying $10-20 billion.
    Back when TSLA was at $3.5 billion market cap, Apple and Google had a prime opportunity to acquire Tesla. They needed to pay a generous price (ie., much higher than the $3.5 billion market cap) and they needed to convince Elon that Tesla being acquired would speed up Tesla's trajectory and bring the EV revolution quicker than if Tesla was left independent. The way Apple or Google could have argued this is quite simple. They could have told Elon that Tesla would remain an independent subsidiary but would have full access to all the capital they ever required. In other words, Larry Page or Tim Cook could have told Elon he could have access to $100+ billion over the next decade if he wanted it (ie., current AAPL or GOOG cash hoard, plus the ability for those companies to raise money in secondary offerings or debt offerings). When TSLA was at $3.5 billion market cap, if Google offered $15 billion, allowed Tesla to remain an independent subsidiary, and gave them full access to their full cash hoard and potential future offerings (i.e.., $100b +), then I think it's possible a deal could have been struck. For Elon, the motivation would not be the money (he would want a good price for his investors sake) but rather the potential to usher in the EV revolution quicker than what would be possible if Tesla was left independent. (Note: personally I'm very glad that no deal was ever struck and Tesla was not acquired because as an investor I think Tesla is going to be worth a lot more than what most people think and I think they'll have access to large amounts of capital as long as the markets value Tesla fairly.)

    Now, fast forward to today. Tesla is at a $25 billion market cap (recently was $30 billion). The chances of Apple or Google acquiring Tesla are very, very low. Tesla has found success in raising funds in the equity market and selling Tesla to have access to funds is not as appealing as before. Also, at $25-30 billion it's a tough company to acquire since the acquisition price would have to be significantly higher.

    So what are Apple and Google's options then?

    Personally I think if they were serious about building cars, they would have already made some bold moves (#1 or #2 option above) last year. At this point, their choices are limited. Personally, I don't think Apple will be building cars in the near or foreseeable future (unless their leadership changes). Google is more of a possibility, since Larry and Sergey are stronger risk-takers and tend to think outside the box (ie., moonshots). I don't think either company would be interested in licensing Tesla's IP as Apple and Google like to own their core technologies and understand the value of owning their own IP/tech.

    - - - Updated - - -

    Note, this is from Apple's mission statement | Apple business philosophy and mission statement | alvinalexander.com :

    "We believe that we need to own and control the primary technologies behind the products we make, and participate only in markets where we can make a significant contribution."

    This has been repeated many times by Tim Cook and is one of the reasons why I don't think Apple would be interested in licensing Tesla IP.
    �
  • Apr 8, 2014
    techmaven
    Yes, but they have other facilities that have additional requirements including the new headquarters. So I think that the tie up is unlikely, but certainly possible.
    �
  • Apr 8, 2014
    JRP3
    This should probably go in the Nonsense from Petersen thread but I see it as a good sign for the GF since Petersen is of course negative about it.

    http://seekingalpha.com/article/2130663-is-teslas-gigafactory-becoming-a-gigafarce

    His points for those who don't want to click:

    �
  • Apr 8, 2014
    Auzie
    My take on potential gigafactory partners:
    They must have cash, so both Google and Apple fit the requirement;
    They may be interested in energy storage business 'per se', not as a consumer of gigafactory product.

    Energy storage business has the potential to be much larger business than any electronic consumables, cars, etc. Gigafactory might be their vehicle for involvement in developing a better way of efficiently storing and retrieving energy. Google has a record of being very diversified regarding their businesses, Apple seems to be a bit less adventurous.
    �
  • Apr 12, 2014
    Benz
    In the case that Panasonic decides that they will not be a partner of Tesla Motors in the Gigafactory project, and therefore they willl not invest $1B:

    Wouldn't it be possible for Tesla Motors to just buy that particular division of Panasonic that produces the 18650 battery cells?

    Just asking.

    I would like to know what you guys think of this scenario.
    �
  • Apr 12, 2014
    JRP3
    Possible, but that doesn't give Tesla the needed extra capacity and it takes money away from building the GF. If they need IP from Panasonic and can't get it through a license or partnership then I suppose it might make sense.
    �
  • Apr 12, 2014
    Benz
    Yes indeed, that's what I meant, just to get the IP from Panasonic. This will cost a lot more money ($5B for Gigafactory + buying Panasonic battery cell division), but they then will not have to listen to anyone else, and they will not have to share any profit in the future.
    �
  • Apr 12, 2014
    blakegallagher
    I dont think this is a possibility because as I understand it Panasonic's battery division is the only thing holding the company up. Without their battery division (partnership with Tesla) The company would be in quite a bit of trouble. It seems highly likely that Panasonic will invest in the Gigafactory. They can not afford not to be.
    �
  • Apr 12, 2014
    Auzie
    Agree with the above.

    When gigafactory announcement was made not many details were released, except that it will be in US and there will be partners. Not releasing information does not mean it does not exist (too many negatives here..). I would be surprised if the announcement was made with no clear path in place for both location and partners.

    I would be surprised if Panasonic is not part of the picture in some creative way.
    �
  • Apr 12, 2014
    kenliles
  • Apr 13, 2014
    kenliles
  • Apr 14, 2014
    Auzie
  • Apr 16, 2014
    Benz
    Suppose that Panasonic decide to participate in the Gigafactory and to invest $1B, that would still not be enough, as more investment will be required (at least $4B, but $5B would be more likely). Which other company is most likely to be stepping forward as a partner of Tesla Motors, and to make an additional investment in the Gigafactory (for another $1B?)?
    �
  • Apr 16, 2014
    dalalsid
    Anyone who wants ~10GWh of Tesla packs. Could be auto companies, tech companies with green power data centers, other manufacturing companies interested in energy storage etc.
    �
  • Apr 16, 2014
    Krugerrand
    The suggestion was that Panasonic would bring others with them.
    �
  • Apr 16, 2014
    Chickenlittle
    Even if they didn't tesla would find it easy to fund 1 billion out of receipts in three years
    �
  • Apr 16, 2014
    hummingbird
    This is not news. We are clear about this: Tesla and Panasonic have a love-hate relationship.

    For now, let's not dream about Panasonic participating in the Gigafactory in the USA. Panasonic's CEO Tusuga said clearly in public that their approach was to take incremental steps to increase cell production as needed.

    Translation: 1) they intend to milk Tesla as much as possible by keeping cell supply limited, 2) understandably, they are not interested in sharing their cell IP and know-how with Tesla. Why would they want to drive down cell prices in a hurry with a giant factory located in the USA? Their interests are to protect their IP & know-how, make money and keep jobs in Japan. Keep in mind Panasonic Corporation lost 10 billions dollars in the past 10 years, by necessity they are very conservative.

    On the flip side, Panasonic and Tesla may sign another deal for 4 billion cells in 2016 for Gen 3, as they did last October for 1.8 billion cells for Model S/X.

    1.8 billion cells is good for 270,000 Model S&X (to 2017)

    4 billion cells will be good for another 300,000 Model S&X plus 500,000 Model Es.

    (note: each Model E will use 4,000+ cells. each Model S/X will use 6,500 cells on average)

    Unless something changes, Panasonic will try to hold cell prices up for as long as possible. I suspect current cell price is approximately $3.00 per cell. I suspect Panasonic will drop that price by 3% per year over the next 5 years, like this:

    $/cell ($/kWh)
    --------------------
    3.00 ($247/kWh)
    2.91 ($240/kWh)
    2.82 ($232/kWh)
    2.73 ($225/kWh)
    2.66 ($219/kWh)
    2.58 ($212/kWh)

    Model E needs battery size of 48 kWh. $220 x 48 = 10,500. Total pack price of $12,500 (10,500 + 2,000). Can Tesla make the Model E given this price?

    Elon is of course not happy with this. He does not like to be Russianed. He now has $2 billion in the bank, we wait and see what he does next.
    �
  • Apr 16, 2014
    kenliles
    good point-
    I would remark, with Elon, the Pan-boys may find themselves dry-milking if they aren't careful
    �
  • Apr 16, 2014
    hummingbird
    Unfortunately Tesla and Panasonic are currently joint at the hip. They share current cell chemistry. Tesla is stuck for now. But I suspect Elon will find a way out of this one way or another.

    I am not an expert, but I hope somehow Tesla and the Chinese government will jointly do something big. (Wild thought: acquire Panasonic to take control of its battery business and spin off the rest. Then build two Gigafactories to start, one in USA, one in China)

    The Chinese government desperately want EVs to succeed. We are close. It's very much a matter of $/kWh. One way or another, the price will come down. The only question is when? and by who? Then the EV revolution will take off big time in China because the government will mandate it. Tesla should be able to play an important role if Elon does this right.

    For sure, Elon is very much interested in getting CO2 emissions down in China ASAP.
    �
  • Apr 16, 2014
    Johan
    hummingbird: Tesla through JB Straubel have said on several occasions that the cell they are currently using in the Model S packs is not the regular NCA18650 3.4mAh cell, which I suppose Panasonic hold the full patent for, but a modified, "automotive grade", cell that is specified and designed by and for Tesla. So we do not really know that there are any Panasonic patents as of now that would prevent Tesla from manufacturing cells on their own. The 18650 cell format and the general principles of LiIon batteries absolutely not subject to patent protection by Panasonic, as we know there are other suppliers out there manufacturing cells that can, in effect, substitute the Panasonic cells. So if Panasonic were to not participate in the Gigafactory, for some of the good reasons you bring up (why drive down price, being conservative etc) then I suppose it all comes down to financials: can Tesla finance the factory themselves, or find another more willing partner. From the past we've seen that Elon is bascially as much a financial as well as technological genius and again and again he keeps coming up with creative and attractive new financing models.
    �
  • Apr 16, 2014
    pz1975
    The one part of all of this I don't understand is why Elon/Tesla would make a major announcement such as the gigafactory and go through the whole process of raising their own $2.3 billion for it if they weren't absolutely sure they already had partners lined up or at least in the final stages of discussion. I don't remember a time that the company has ever made any poor decisions since their inception even remotely close to what this would be if they could not find any/enough partners for the GF and they were left stranded. It just doesn't seem to be Elon's way to make a big announcement like that that would have the potential to greatly backfire.
    �
  • Apr 16, 2014
    Cosmacelf
    The reason they made the gigafactory announcement when they did was because the stock price had reached stratospheric heights. The gigafactory was announced in conjunction with a capital raise. They may very well have not been ready for the announcement, but the imperative of being able to raise $2B cheaply was too big to pass up.
    �
  • Apr 16, 2014
    arashlzy
    I agree, on the face of it, it seems like the announcement was premature. Why tell the world about such an audacious plan without a clearer path to roll it out? The fact that it came on the heels of the earnings report is suspect. IMO TM should have waited till they had some more concrete plans for the GF before they announced, and I think the share price is going to reflect the weight of this doubt.
    �
  • Apr 16, 2014
    pz1975
    I guess I wasn't clearer in my post. I agree that the doubt will fuel stock price lowering, but I actually feel confident that Tesla does have everything under control and the doubt is just because of lack of immediate news. In the press release, it clearly shows the timeline for partners to be all the way through 2014 so just because nothing has been announced doesn't mean things aren't going along just as planned. I have faith in Elon and Tesla, and especially for big things like this.
    �
  • Apr 16, 2014
    Jackl1956
    To build interest? It amazes how many people know that Tesla Motors is building a battery factory. Elon is marketing Tesla Motors without spending a dime.

    I'm waiting with bated breath. Are you?
    �
  • Apr 16, 2014
    GSP
    Tesla plans for the cell supplier, most likely Panasonic, to bring their material suppliers to the table as well. The companies that make the cathode materials, anode materials, separator, electrolyte, the can, etc will all invest in the gigafactory. It will be raw materials in one end, complete battery packs out the other. Just like Henry Ford showed us years ago.

    GSP
    �
  • Apr 16, 2014
    hummingbird
    Here is my version of what may have happened ... (a pure guess on my part)

    First, from the Q4 earnings release:

    "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."

    Then Elon said they will hold a conference call the following week to discuss the details of GF. Further, he indicated it was very likely Panasonic will be a partner in the GF. "but not 100%" is what he said at other meetings.

    I had some interactions with the Japanese in the past. During discussions, they will often say "yes, yes, yes" to mean "yes, I understand what you said", but they do not mean "yes, we have a deal". Americans hear "yes, yes, yes" and assume yes means they have a deal.

    The Japanese culture is to not offend you face to face. So they often say "yes, yes, yes" during conversations.

    I think this went on for several months and finally at the end Elon found out they had a misunderstanding all along. (recall the 1.8 billion cell deal was signed Oct 30, 2013)

    Panasonic was a "no show" at the end. A few days later, Panasonic CEO Tusuga finally said in public that they can only take small steps.

    Translation: We don't want to risk billions when our current relationship is fine with us. We will sell you all the cells you need at $3 each. Keep us posted on how the Model S&X are doing on a monthly basis, and we will crank up productions as necessary. We aim to keep cell supply tight to keep the price firm. Yes, $3 per cell. Yes, yes, yes.

    That's my guess of what happened.

    Elon has been Russianed many times before. He will deal with it. Let's wait and see.

    - - - Updated - - -

    This was posted before:

    From page 32 of 2012 10-K: "we have fully qualified only a limited number of suppliers for the cells used in such battery packs and have very limited flexibility in changing cell suppliers."

    From page 32 of 2013 10-K: "we have fully qualified only one supplier for the cells used in such battery packs and have very limited flexibility in changing cell suppliers."

    Current cell chemistries are jointly developed by the two companies. Tesla is stuck with Panasonic for now.
    �
  • Apr 16, 2014
    blakegallagher
    Tesla is not stuck with Panasonic. They are for the current cells they are getting but we both know if it came down to it Tesla could use another cell supplier or design their own cell. They have the know how and if their are any Panasonic patents holding them back I am sure they could change something up a bit.

    One way or another this factory will happen. I would bet my last Tesla share on that :)
    �
  • Apr 16, 2014
    uselesslogin
    I get it and maybe you are right. However, this is literally the first thing you learn about the Japanese culture if you take any global culture course at a University. Heck, I think I heard this in high school. I hear it so much I wonder if it is even true. There is no way Elon Musk and his negotiation team are not familiar with the way the Japanese communicate. I am more likely to believe this is what they said, Tesla understood them perfectly, and Tesla is trying to strong arm Panasonic into making a deal by announcing their intentions and demonstrating their ability to raise cash and go it alone. We won't know any more until we know any more.
    �
  • Apr 16, 2014
    blakegallagher

    Thanks for this. +1.
    �
  • Apr 16, 2014
    FluxCap
    That's just like, your opinion, tftf.

    829405d1378322797-29er-cf-hts-part-1-discussion-conclusions-5166465451_ded900eaf8_z.jpg
    �
  • Apr 16, 2014
    hummingbird
    How do you read the Panasonic situation FluxCap? Why the personal attack? And what's with tftf? You are imagining things.
    �
  • Apr 16, 2014
    EarlyAdopter
    Shortly before the revised deal with Panasonic was announced end of October, Tesla confirmed they were in talks with Samsung and other battery suppliers. Panasonic offers manufacturing capacity and efficiency, not battery IP. They are replaceable.

    http://www.reuters.com/article/2013/10/04/us-korea-autos-tesla-idUSBRE99306020131004

    Tesla's Palo Alto based spokeswoman, Liz Jarvis-Shean, also confirmed the two firms [Tesla and Samsung] were in discussions but noted that Tesla was in talks with other battery suppliers as well. "We continually evaluate best (battery) cells and technologies from all manufacturers," Jarvis-Shean said.
    �
  • Apr 17, 2014
    imherkimer
    Seems to me that Panasonic has really had a turnaround due to its relationship with Tesla.
    Such a profitable relationship would be hard to lose. Panasonic is in a bind either way, and the risks are high either way.
    So they are taking their time to define their participation. There have been reports that they already separated the automotive manufacturing from other aspects of the company. They may need to establish a subsidiary or other entity to fulfill the partnership with Tesla. Likely it will take good deal of effort, discussions, and time to work through all the implications and negotiations to reach the operative agreements for such a project. If the factory is in the US, this could be another consideration, since their existing logistics and operations are located in Japan. Panasonic leadership is being cautious, the stakes are high for them either way it goes. In the end, I have the sense that it will be much better for Tesla to build their own factory.
    �
  • Apr 20, 2014
    Jackl1956
    Could Simbol Materials be a potential partner????

    Log In - The New York Times

    Tesla Motors Gigafactory: Lithium may draw automaker to Salton Sea

    Simbol Materials LLC: Private Company Information - Businessweek

    Interesting articles.

    1.Is it possible that California (the Salton Sea) is still in the running for the Gigafactory?

    2. Could geothermal electrical generation be dovetailed with solar and wind?

    3. What would the efficiency paradigm of solar/wind/geothermal contribute to the Gigafactory?
    �
  • Apr 21, 2014
    Jackl1956
  • Apr 21, 2014
    JRP3
    Not sure how I feel about that. I thought part of the idea was to have some operations outside of CA for more geographic diversification. I'm also surprised that Tesla is concerned about keeping the $2500 refund since I'd bet that has almost no effect on the demand for a $72K+ vehicle.
    �
  • Apr 21, 2014
    clmason
    This thread seems like the best place for my question, but still not really the perfect fit. Sorry its a little out of scope.

    Is anyone investing in Alcoa (AA)?

    I have just recently begun researching AA and I like what I see. Other automakers are jumping on the aluminum bandwagon too. Demand will be increasing substantially solely because of this over the next decade.

    Thoughts on AA?
    �
  • Apr 21, 2014
    JRP3
  • Apr 21, 2014
    clmason
  • Apr 21, 2014
    Krugerrand
    There are other aluminum suppliers besides Alcoa.
    �
  • Apr 22, 2014
    Chickenlittle
    And there are other car makers than tesla

    over 6 months with stock and options have a 3 bagger so far with aa. Aluminum as a commodity has been damaged by glut but aa is using alloys to differentiate themselves from competition. Cars are not made from pure aluminum. Ford and gm have gone for alcoa. Their profits are coming from what they do with the aluminum not making it. Read transcript of last conference call. They have even licensed their waste water treatment to other companies. If the price of aluminum were to increase that would be gravy.

    The debt downgrade is strange since the company paying it down for a year now and with improvement in the financials they are downgrading. The most recent "loss" a paper write off of assets not involving cash. As alcoa points out the company has no need to borrow anyway for at least three years. I would see downgrade of bonds an opportunity to invest in the bonds, not my style, since they are not in trouble at all
    �
  • Apr 22, 2014
    Chickenlittle
  • Apr 22, 2014
    LakeForest
  • Apr 22, 2014
    JRP3
    So they are building two gigafactories, or two half-gigafactories?
    �
  • Apr 22, 2014
    Cattledog
    (2) 512 Mb factories?
    �
  • Apr 22, 2014
    Zaxxon
    Ha.
    �
  • Apr 22, 2014
    Cobos
    Bulldozing land can't be that expensive, and even though unorthodox doing it 2 places at once might make some sense? That way you tell state 1 that at state 2 where we are also clearing land we got this and that, if you can match that we'll just give that flat land away over in state 2. Must be a good way to drive a really hard bargain?
    And as said bulldozing land costs a few million dollars, so those with permits and best incentives first will get the deal?
    I'm just thinking out loud here, so please pick my idea apart...

    Cobos
    �
  • Apr 22, 2014
    surfside
    where are you seeing this quote? it isn't in the WSJ article...

    surfside
    �
  • Apr 22, 2014
    ItsNotAboutTheMoney
    It'd be cheaper, but you know they'd eventually wished they gone for one larger one.

    - - - Updated - - -


    Google gives me a hit on the WSJ article "Tesla CEO Pledges to Build Up Support Network in China".
    �
  • Apr 22, 2014
    Cosmacelf
    That WSJ journal article originally had a quote from Elon saying they would likely build two factories in the interest of time. Unfortunately that article got edited and the quote taken out! I hate it when newspapers do that!

    Meanwhile, Tesla buys another factory in California: Tesla Begins Manufacturing Modifications On Its New 431,000 Square Foot Facility In Lathrop, California

    Putting 2+2 together, I think Tesla has an aggressive timeline for their gigafactory, their negotiations with the states for tax breaks and locations aren't going as fast as they would like, so they are going ahead and starting initial work on gigfactory production in the new 431,000 square foot facility they just bought.
    �
  • Apr 22, 2014
    hobbes
    Yeah, they should at least note that it was edited. Seems to me that almost half of the text was edited.
    �
  • Apr 22, 2014
    tentonine
  • Apr 22, 2014
    Cosmacelf
    Here's the quote in case that article gets edited too! "We are going to proceed with at least two locations in parallel, just in case one of them encounters some issues after breaking ground," Musk said. What an odd quote though. "just in case one of them encounters some issues after breaking ground" - meaning what? It blows up?


    I loved his other quote in the article: "My instructions to the team are to spend money as fast as they can spend it without wasting it," he said. God, it must be nice to run a company that can do that!
    �
  • Apr 22, 2014
    c041v
    That is really weird, this isn't a Mars Colonial Trasnsporter, it's a factory. It's been done 1000 times before and there's many companies that specialize in that sort of construction. Heck, there's a division of my company that builds nothing but Costco's.

    It must be an allusion to the issue being political in nature. "Just because we've broken ground doesn't mean we're making batteries yet."
    �
  • Apr 22, 2014
    TSLAopt
    There are a lot of folk who want to see Tesla fail and do not want o see the Giga factories in production...many of these folks have influence over lawmakers, etc. this is a smart move by Elon just incase they choose one location then some new politicians come in influenced by big Oil money and try to shut it down...then there is still a 2nd location.
    �
  • Apr 22, 2014
    TSLA Siempre
    Agree. This is a peculiar strategy, but I'm sure the reasoning is sound. I'm thinking part of the calculus is that they will also have a head start on the second GF when the time is right, provided there are no 'issues'
    �
  • Apr 22, 2014
    DaveT
    I agree that breaking ground in 2 or more locations makes a lot of sense when so much is riding on the gigafactory and it's timeline. I would imagine that there are several stages of permits required so even after breaking ground the local authorities could hold up a permit or show red tape. After several months it'll be clear which local government is easier to work with and who will fulfill their promises.

    The negative to this strategy would be the extra costs required. But Tesla could get creative and have some kind of approach where they're getting the land for next to nothing.

    Also it's entirely possible that they start on two locations and end up choosing one but later using the second one as well for another gigafactory.
    �
  • Apr 22, 2014
    Citizen-T
    I'm going to go with the theory that one Gigafactory is not enough and he wants two in the U.S. He just doesn't want to come out and say it yet.
    �
  • Apr 22, 2014
    Krugerrand
    *This*

    O'Connell already let 'gigafactories' (plural) slip in his most recent interview.
    �
  • Apr 23, 2014
    Jackl1956
    Elon Musk Quote

    "My instructions to the team are to spend money as fast as they can spend it without wasting it,"

    This statement has left me wondering about partnership negotiations. Is it possible that major partners are joining Tesla's push forward?

    The next few weeks could prove very interesting.
    �
  • Apr 23, 2014
    chickensevil
    This factory is for CNC only, or so I have been told.

    Edit: Just in case you don't know what CNC is (since I didn't until this week... haha!) Numerical control - Wikipedia, the free encyclopedia
    �
  • Apr 23, 2014
    palmer_md
    CNC is a music factory. Here is the link


    I did a drive by yesterday hoping to see some signs of a supercharger installation at the Lathrop site. No luck, but I did see lots of activity at the old Mopar distribution center that Tesla purchased. The site has been empty for years now, but I saw a dozen or so cars in the lot and you can see all the lights on inside the warehouse. There was some light construction visible on the north side of the building. Looked like they were modifying a doorway or something (can't see very well from the west side front of the building). Not a great site for superchargers since it is too far to walk to anything. You'd be just stuck sitting in your car if they used this site, but I thought I'd look anyway. I had a friend who worked there, so its nice to see it getting back to use.
    �
  • Apr 23, 2014
    dalalsid
    One gigafactory is not enough. Production maxes out in 2020 with 500k cars. So GF2 needs to be online by 2021 i.e. construction begin in 2017/2018. Might as well get the land and state issues sorted out now.
    �
  • Apr 23, 2014
    AlMc
    I agree. In one of DaveTs Google chats this was discussed with CapOppressor, a well respected early member of the TMC investing group. He was worried that the initial Gigafactory could supply only 500k cars....not enough in his opinion. Nice to see we may have many factories planned in the near term.
    �
  • Apr 27, 2014
    hobbes
  • Apr 27, 2014
    Cattledog
    Extra capacity but also redundancy. Tesla is vulnerable right now with solely one supplier, they'd be vulnerable to some sort of industrial accident, political malfeasance, or natural disaster with only one Gigafactory (even if they were still getting a nominal supply of batteries from Panasonic's plants).
    �
  • Apr 27, 2014
    vgrinshpun
    Will ten do? According to the article that was linked on TM twitter feed Elon apparently have remarked that total of TEN GF will eventually need to be built in US: Tesla CEO Elon Musk says he eventually wants to build 10 gigafactories in the U.S., Chen said.




    Twitter / phxbizjournal: Our tech reporter gets behind
    �
  • Apr 27, 2014
    chickensevil
    10 at 500k supply is really only 5 million cars a year. That puts them on the verge of becoming a top player in the market. So I would say at least another 10 across the rest of the world in order to supply 10 million cars and then they would be hitting close to GM and Toyota. Totally reasonable numbers.

    but we need to get the first one built! Come on already! Haha
    �
  • Apr 28, 2014
    Theshadows
    Yea, I did the calculation and came up with just USA sales that would put them at $300B in sales. Toyota in FY14 did $187B globally. It kinda gives the scale of Elon's vision.
    �
  • Apr 28, 2014
    Robertj
  • Apr 28, 2014
    Chickenlittle
    �
  • Apr 28, 2014
    FluxCap
    Panasonic earnings letter is out, call is now. From the 2014 Annuals, this is Panasonic 2015 guidance:

    Also, this is from the letter:

    panasonic4-28-2014.png
    �
  • Apr 28, 2014
    Johan
    Couldn't they just have written 18650 cells for Tesla instead of "cylindrical li-ion batteries for U.S. electric vehicle manufacturers". Also I wonder who the manufacturers are? :)

    So this seems to seal the deal about Panasonic being the main partner in the Gigafactory, right?
    �
  • Apr 28, 2014
    FluxCap
    I don't know but this sure doesn't look like a company scaling back on one of its best business divisions, batteries for Teslas.

    Via techmaven, from audio on the earnings call happening right now:

    * They expect to invest about $146 USD million ($10-15billion yen) in automotive batteries in FY16.

    * They had already announced they will supply 2billion cells for Tesla Motors alone from 2014 through 2017 for Model S/X, so that's about 275,000 Model S/X cars we think.

    * Expanding and completing their Sumino battery plant in 2015 for at least 600million cells annually.

    * Talking about automotive segment "The major driver behind profit and sales this year has been Tesla"

    * They talk about Tesla�s projections and that as Tesla�s sales increase, Panasonic's sales and profit increase, which means they make operational profit on the Tesla batteries today and they lose money on PC batteries


    Now you tell me if that isn't a company that will commit significantly to the Gigafactory, just as Elon said they would.
    �
  • Apr 28, 2014
    MikeC
    I never doubted Panasonic would be a GF partner. They may be more "conservative" in Japan, but they still like making money and they're not stupid.
    �
  • Apr 28, 2014
    techmaven
    To be clear, I'm trying to suss out the announced Panasonic investments in the automotive battery segment. It will help us know how far along they are with the already announced expansion of the existing capacity in Osaka, Japan and how far along they are expect to be in the near future. Further, it might be that they have already put aside money for the gigafactory within these announced numbers, but I doubt it without further evidence. The problem with analyzing Panasonic is that they are huge and they have many businesses within segments and they report in very vague terms.
    �
  • Apr 28, 2014
    kenliles
    no I don't think I could do that.
    I'm swaging here though- I think Elon might have a go with IBM on a second plant that follows the first... my own musings
    �
  • Apr 28, 2014
    FluxCap
    And you can correct any errors in my liveblogging of your liveblogging above :).
    �
  • Apr 28, 2014
    kenliles
    thanks techmaven and flux for keeping us in the loop on this
    �
  • Apr 28, 2014
    techmaven
    Panasonic is a cash poor company as they have been decimated in a number of businesses in the past 5 years. However, I'm not all that sure that Tesla actually needs a lot of cash from Panasonic. The Panasonic investment in the gigafactory may have much less to do with cash as much as IP and consulting. Obviously, Panasonic corporate has to be very careful and you can sense it if you listen to the Q&A audio and read their IR information.

    With that said, we're talking on relative terms. The numbers that Panasonic is investing in the automotive and industrial segment is something like $1 billion in FY 2015 (this coming year). I'll have to really sort through the numbers. Again, I'm not really sure Tesla or the street is looking for a huge cash infusion from Panasonic as much as a commitment to part of the project to ensure its success. In any case, there's definitely some counting to try to suss out the Panasonic situation.
    �
  • Apr 28, 2014
    mershaw2001

    Flux, I don't see where you can go beyond speculation for panasonic and the GF. I am being cynical- I see 146 million in commitments, not 1-2 billion in GF funding or even a mention of it. To me, if they were going to not participate in the GF, they would still be increasing cell production on their own in order to meet/compete with the GF, and so the 146 M increase is in line with a hypothesis that they will not participate in the GF.

    (I do ultimately think they will participate, i just don't see any of this as evidence of them participating).
    �
  • Apr 28, 2014
    arashlzy
    I have similar thoughts as Mershaw posted, in addition....expanding the Sumino plant also indicates lack of participation in GF.

    �
  • Apr 28, 2014
    FluxCap
    Oh this is most definitely not official confirmation of Gigafactory participation, techmaven and I are just trying to read the tea leaves here, and this is a company that makes a lot of money from Tesla Motors and I see no reason why they or their shareholders would want to stop, as I said on the CapOp Google Hangout.

    I don't think we need the cash as much as we need the IP and other "in-kind" contributions. I read that $146million number and raised an eyebrow as well, but honestly they are so circumspect and vague in their reports that they leave a lot of room. For example, what costs does that $146billion entail? It may mean just raw materials for batteries, not factory capital expenditures.

    As techmaven said, Panasonic is not a cash-flush company and may be hesitant to commit on that level, but I don't believe that is primarily what we need them for.

    This is all further evidence to me that Panasonic is a stronger company with Tesla Motors as a customer and partner, and I'm betting that its shareholders and management would not be so foolish as to divest this, in their own words, lucrative and highly profitable business.
    �
  • Apr 28, 2014
    ItsNotAboutTheMoney
    No, the Suminoe exoansion is required to meet increased demand from the new contract with Tesla and other manufacturers, including Toyota. And Toyota's demand shouldn't be underestimated, since there's expected to be more use of lithium in their next generation Prius.
    �
  • Apr 28, 2014
    techmaven
    I believe the Suminoe plant is 18650's only and the vast majority of its output is for Tesla. Toyota is likely to use prismatic cells. See:

    Panasonic to increase its battery capacity
    �
  • Apr 28, 2014
    mershaw2001
  • Apr 28, 2014
    chickensevil
    I mean I know nothing is final until it is final, but it seems to me that Tesla has already said pretty strongly that cali would NOT be a site at all for the factory. It would have to be some crazy silly deal that would change their mind on this one.
    �
  • Apr 28, 2014
    Papafox
    I'm with chickenevil on this one. Elon has been clear that California won't see a big expansion such as the GF because of the tax situation there.
    �
  • Apr 28, 2014
    vgrinshpun
    Thank you Techmaven and FluxCap for the Panasonic information!

    Let's look at some numbers to put the significance of building the second phase of the Panasonic Suminoe plant in perspective.

    Firstly, this addition of the second phase at the Suminoe plant which has capacity of 300M cells is clearly on top of the existing 1.8B cells 4-year agreement. This agreement is roughly for 450M cells per year (this is approximation, as I am neglecting the ramp-up and just divide 1.8B cells by 4-year term of the agreement). Based on the profile of the Suminoe plant (Panasonic's New Lithium-Ion Battery Plant to Start Mass Production Next Month | Headquarters News | Panasonic Global), the full capacity of the first phase of this plant is 300M cells/year. That leaves additional 150M cells/year for the additional line(s) at the another plant in Osaka prefecture (Kaizuka plant).

    Assuming 7104 cells for 85kWh battery and 5014 cells for 60kW battery, as well as 80/20% split between production of 85kWh/60kWh MS yields an average of 6686 cells per car. So 450M cells/year that is included in the current agreement is enough to produce approximately 67,300 Model S and X per year. Addition of the 300M cell/year capacity of the second phase at the Suminoe plant can cover additional 44,870 MS/MX per year.

    The total 67,300 + 44,870 = 112,170 roughly coincides with the total capacity of the two production lines at the Tesla Fremont factory which I estimate at 56,500 cars each (Building out a real high volume next generation production line for the Model S and X)

    My take-away from the above:
    1. Addition of the phase two to the Suminoe plant with the 300M cells/year production is very significant 167% expansion of the current 1.8B cells/year agreement. I expect a formal announcement either at the ER call, or as a separate press release before the ER.
    2. It is clear that TM internally plan for a maximum combined MS/MX production of about 113,000 per year, perhaps by the 2016. At an overall net margin of 15% and ASP of $105K this yields EBIT of $1.78B as early as 2016.
    �
  • Apr 29, 2014
    Benz
    Would it be fair to say that the first shipment of those 18650 battery cells (produced at the Suminoe plant as from April 2014) would be arriving at the Tesla factory in Fremont before July 1st 2014?

    If Tesla Motors have about 10M more 18650 battery cells at their disposal (above the number of 18650 battery cells which they already get from Panasonic), then that would directly result in a higher production capacity of battery packs. At least 1,500 more battery packs per month.

    The number of Tesla Model Ses produced in the first half of 2014 and the number of Tesla Model Ses produced in the second half of 2014 will be very different. That difference is going to be at least 1,500 x 6 = 9,000.

    That is going to result in a much higher number of deliveries in the second half of 2014 as well. If we estimate that the number of deliveries in the first half of 2014 are about 15,000 than that would mean the the number of deliveries in the second half of 2014 are about: 15,000 + 15,000 + 9,000 = 39,000. That means that they are going to beat the guided 35,000 (in 2014) very easily.

    Am I right about that?
    �
  • Apr 29, 2014
    AlMc
    Another thing to consider, although there is no way of knowing at this point if it will happen, is will TM be offering a bigger battery pack with the introduction of the X and possible AWD S. If this happens, even if production begins late in 2014 the packs will have to be built and ready for install.
    �
  • Apr 29, 2014
    sahanim
    I dont think there is any real incentive for tesla to introduce a bigger battery pack at this time. Their competition is at least 2 years behind. They already have a viable product that people love. They'll want to focus their resources elsewhere IMO.
    �
  • Apr 29, 2014
    techmaven
    I do not see Tesla making a bigger battery pack using the existing cells. I think the only way we get a bigger pack is if there is a new cell with higher specific energy. There is still discrepancy on how close Tesla's cell is to the NCR18650A or the NCR18650B. All indications at first pointed to the NCR18650A, but we really don't know. Further, small modifications including additives and physical packaging and so forth means that any new Panasonic cell technology would still have to be adapted to Tesla's use. The next big jump for Panasonic's cells is supposed to be the silicon anode and we haven't seen that in production yet. Therefore, I don't see Tesla jumping on it in advance of seeing it in other applications. There is roughly a 9% jump in specific energy from the NCR18650A to the NCR18650B, but either Tesla's cell is already incorporating the technology in the NCR18650B or Tesla has chosen to stay away from it.

    The primary drivers at this point is likely cost then longevity with higher C-rates as opposed to energy density.
    �
  • Apr 29, 2014
    Benz
    No, I'm not, because the article is from March 25th, 2010.

    See for yourself: http://panasonic.co.jp/corp/news/official.data/data.dir/en100325-3/en100325-3.html
    �
  • Apr 29, 2014
    FluxCap
    You're welcome, and thanks for follow-up analysis vgrin! This data and our analysis, though premature, seems to corroborate my expectations nicely. Good luck to all trading and as always, be careful.
    �
  • Apr 29, 2014
    chickensevil
  • Apr 29, 2014
    Benz
    Yes, we have been told that there will be battery cell supply in higher quantity in the second half of 2014 (most likely in Q3 2014). But we don't have any battery cell supply numbers to calculate/draw a projection/expectation.
    �
  • Apr 29, 2014
    Benz
    About: * Expanding and completing their Sumino battery plant in 2015 for at least 600million cells annually.

    Where did you get that figure of "at least 600million cells annually" from?

    It's a very interesting/promising number though.
    �
  • Apr 29, 2014
    HenryF
  • Apr 29, 2014
    ggies07
    I was thinking, for Texas, what about the Ft. Worth area? There is a ton of open space by the Alliance Airport.....I would think that's close enough for people around Ft. Worth, Keller, Southlake, Euless, Colleyville, HEB area to live and drive out there to work. North Texas would be just a little closer than way down in the Austin area.
    �
  • Apr 29, 2014
    JRP3
    Higher energy density reduces the need for higher C rates, along with providing greater range. A larger pack can put out more power at the same C rate. I'd say cost and energy density are the prime drivers from here on out.
    �
  • Apr 29, 2014
    techmaven
    While that's true in abstract, the issue is how. Without a concrete basic chemistry improvement, we might get some additive or packaging or some other advances that likely to improve cycle life longevity or better tolerance to higher C-rates, but it unlikely to increase specific energy. I think significant specific energy improvements to the NCA cells would have to be telegraphed well in advance of Tesla's usage of such improvements in their cars.
    �
  • Apr 29, 2014
    Cosmacelf
    As I thought, the real reason why California isn't in the running is environmental over-regulation.
    �
  • Apr 29, 2014
    kenliles
    I think that's true. But we are 3 years away and given Elon's propensity for time collapse it's a possibility. Especially for a closely held sister chemistry. Something like the Li-Air work at IBM or some other manifestation Elon has exposure to via SpaceX. I doubt anything as radical as super capacitors. But some new chemistry that's already well tested is possible
    �
  • Apr 30, 2014
    techmaven
    I'm actually good with no change in the chemistry at all. A slight improvement in the C-rate tolerance or cycle lifespan would be great, but with zero improvement to the specific energy, Tesla still has the best performing BEV battery pack on the market for quite a while. I don't see NCM catching it yet. The key is pricing. The lower the cost per kWh, the more likely Tesla can make mass market BEVs. At $200/kWh, Tesla makes the Model S and already is straining the availability of cylindrical cells of the right chemistry. As the price of the battery pack approaches the cost of existing drivetrain components like the engine + transmission, the closer to price parity Tesla gets at the lower price points. So somewhere around $150 per kWh for the entire battery (including cells, structure, thermal management, labor, etc.) then Gen 3 is possible with zero chemistry improvements.

    I do wonder at some point if it makes sense to revisit the ultra capacitor issue and use that as part of the AWD Model S/X drivetrain if Tesla cannot increase the specific energy of the pack. It wasn't worth it the existing Performance 85 with only rear wheel drive train because it is likely traction limited.
    �
  • Apr 30, 2014
    JRP3
    There may be ways to increase density of existing chemistry through structural changes in the cells, by using nano materials for example. As with C rates, cycle life is already good enough, and as with C rates, increased energy density and lowered costs, leading to larger packs, mitigates the need for increased cycle life. In my view lower costs and larger packs will help sell more cars, longer cycle life and higher C rates will not. Or, to put it another way, Gen3 needs cheaper, lighter cells, not higher C rates and better cycle life.
    �
  • Apr 30, 2014
    kenliles
    I've had similar thoughts- that technology has such a profound potential; Given Elon's work in that area, though, I've no doubt he's all over it's development and has some back-pocket stake in it for when it's ready

    that's my thinking too JRP3- and from all the anecdotal comments from EM- that's in line with what they will do. The nano materials are really coming into an excercisable space; good thoughts
    �
  • Apr 30, 2014
    TSLAopt
    we all all seem to be assuming two sites, but notice this quote from Elon in the interview:

    �What we�re going to do is move forward with more than one state, at least two, all the way to breaking ground, just in case there�s last-minute issues,�

    It could be 3 or 4 even, probably not, but this is a possibility we should all keep in mind in our evaluation.
    �
  • Apr 30, 2014
    futureproof
    im thinking this is all about negotiation... I think some states might have thought Nevada had it in the bag with the permit applications, etc... So they might have started to write off their chances... However Elon is saying no, keep pushing on your offer, give us some expedited permitting and other things and we'll follow through on breaking ground. Hopefully this negotiation tactic will end up getting the best deal for Tesla.
    �
  • Apr 30, 2014
    30seconds
    Since tesla wants /needs multiple gigafactories in the long run there is also the benefit of having the second site selected, planned and maybe graded.
    �
  • May 1, 2014
    RobStark
    ABC News from New Mexico


    �
  • May 2, 2014
    Cattledog
    Our local paper had a front page article in the Sunday paper identifying San Antonio and Reno as the front-runners. It looks like San Antonio has made a big commitment and structured a package for $800M. With a strong engineering, manufacturing, and transportation infrastructure, green utility, wide labor pool, and possible location for Tesla's second North American factory (pick-up truck heaven), it's a good choice.

    S.A., Reno leaders for Tesla battery factory - San Antonio Express-News
    �
  • May 2, 2014
    uselesslogin
    I feel like Tesla chose S.A. on the condition that Texas allows direct sales. The next regular Texas Legislature session doesn't start until January so that is why they are starting in two states. If Texas doesn't give them direct sales they will proceed with Reno.
    �
  • May 2, 2014
    kenliles
    Or proceed with Reno regardless and stager a second in SA if the law is changed
    �
    • Người đăng: vào lúc

    Không có nhận xét nào:

    Đăng nhận xét

    Đăng ký: Đăng Nhận xét (Atom)