Sep 11, 2014
JRod0802 Oh ok. Didn't realize that. So in that case, using AudubonB's wording would mean that a car manufacturer that doesn't yet have dealerships in Nevada could make two electric cars then qualify to sell without dealerships?
Perhaps the following wording would be better:
A manufacturer is not subject to the provisions of NRS 4 482.36311 to 482.36425, inclusive, if:
(1) all of the passenger cars that the manufacturer makes are powered solely by one or more electric motors;
(2) all of the passenger cars that the manufacturer sells at retail are made by the manufacturer; and
(3) the manufacturer does not enter into a franchise for the sale of its passenger cars.
Edit: By the way, I agree with AudubonB's assessment that using the original wording of the bill, if Tesla gets into the energy storage business, dealership lawyers could try to say that Tesla no longer qualifies for this due to the fact that they don't "only manufacture passenger cars".�
Sep 11, 2014
evme 2 interesting notes so far.
1 - Tesla is working with the state on education to create curriculum for qualified jobs.
2 - The governor's office is claiming they got patriotic businesses interested in buying the tax credits at face value instead of a discount. It is not a legal guarantee but more money for Tesla.
Edit:
AB1 passed the assembly with 39 Yes. 0 No. Good sign so far in the assembly.�
Sep 11, 2014
chickensevil at point 1: From what I was gathering they are actually ALREADY working with like the community colleges on what they need in order to get people qualified straight out of college. I mean we have 3 years to get the initial people through school and trained up, so there is a lot of time here if they get things moving. But I wanted to stress that it is not "if" they are going to get kids from schools, but "how many", because they are already moving forward regardless of what is decided by the government.�
Sep 11, 2014
AudubonB I have done the quickest solution I could come up with: I wrote IR and copied essentially all in my earlier post, and suggested they alert someone at TMC in Carson City to get the bill's wording altered asap. Am not expecting a response, but let's see if the bill's final wording is changed.�
Sep 11, 2014
evme They have multiple locations that accept public comment, including in Las Vegas and I think Reno but not sure.�
Sep 11, 2014
chickensevil Please excuse the broken speech and text here as I was trying to get these down as they were coming in. since they were REALLY great questions.
Location decision why in the north?
Happened last December!!! Met in southern NV for meetings and site visits showing all qualified sites (big long list of things that they had for criteria, they send that criteria out to the whole state and then get info back, company receives info and decides on location). They did this in Southern and Northern NV for a total of about 9 potential sites and then they narrowed that down to a couple of choices which then got finalized to the site they are at today.
First decision Musk made was in Southern NV with SCTY, and it is going really well. This is a significant announcement for Northern NV. This deal provides stuff for all of NV not just north or south.
The decision to cut out the two transferable tax credits, they analized the efficiency and effectiveness of them vs this current project and bill. The state has a limited amount of resources. He did not want this deal to have an impact in the state's general fund now or in the future. Because of this, they needed to find a way to pay for this that was justified by the dollars available in more efficient and effective way.
The effectiveness of the previous tax credits is a multiple more effective between the job creation and the permanency.
about 2% for Tesla vs 30% for home office (which was permanent) vs a ratio that is somewhat higher on the film credit. Meaning they are getting about 15x more effective use of this tax credit between both programs that are getting reduced. They left enough money in the Film credit to allow that to be brought up again in the new session in 2015. They pushed the start of the home office changes back as well, which will give the legislature the option to retain those programs if they choose at a later date but they will be able to repurpose the 70M better.
Sales tax on the new vehicles sales? yes. this is not a retail sales tax abatement. This just impacts the sales of the batteries themselves... so transferring the packs from NV to CA would be considered a "sale" and this is what is being abated.�
Sep 11, 2014
chickensevil Transportation funding getting brought up now.
They are looking to fund this through state and federal funding, current projects will not be affected. Sounds like they already have money they can use for this that isn't going to be a big impact.
Railroad spurs would not be under the DOT and would not be an impact and paid for by the 60 million they are looking to put forward. It would be a private transaction that might get federal funds but there is no state involvement with this one. But there is one planned.
clarification on the tax credits... again... looking for best bang for the buck and efficiencies. Enumerator is the amount of the incentive and the Denominator is the payroll. For Tesla they made the calculation over 20 years, 6500 jobs 22+ an hour, It comes out to 2.7% ratio. Home Office tax credit, put in place in 1971, information is anecdotal, but the 32% ratio is a rough guess but is between 30-34. There is about 1400 jobs, credit is up to 26.5 mil, grow to 30 mil, it is about 19k per job, per year, and there is no sunset to this. Chopped it off at 20 years even subsidy would go forward past 20 years, and it came to the 32% ratio. Film Tax applies to 4 possibly a 5th film, 5.8 million credit, it has produced about (including the 5th) 10 million for nevada, so the ratio would come in at about 59%.
So 2.7% vs 32% vs 59% meaning that giving the money over to Tesla is by and far a better use of this money.
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Environmental concern question about lithium, cobalt, and such especially on water. Through the permitting and the monitoring process this has been determined to be clean and safe and Tesla has it's own stressed commitment to the environment.
Desire is to keep inventory low as well so there is less concern about storage and such.�
Sep 11, 2014
evme
Kind of but not really. Tesla will already hire 700 workers in 2015. 3 years means they would be only in the last hiring round
...
Year Jobs Payroll Construction Equipment Installation 2015 700 $39,817,456.00 $335,000,000.00 $592,500,000.00 $88,875,000.00 2016 1700 $96,699,536.00 $345,000,000.00 $1,382,500,000.00 $207,375,000.00 2017 4700 $267,345,776.00 $320,000,000.00 $1,382,500,000.00 $207,375,000.00 2018 6500 $369,733,520.00 $0.00 $592,500,000.00 $88,875,000.00 2019 6500 $369,733,520.00 $0.00 $100,000,000.00 $15,000,000.00 2020 6500 $369,733,520.00 $0.00 $250,000,000.00 $37,500,000.00 2021 6500 $369,733,520.00 $0.00 $250,000,000.00 $37,500,000.00 2022 6500 $369,733,520.00 $0.00 $500,000,000.00 $75,000,000.00 2023 6500 $369,733,520.00 $0.00 $500,000,000.00 $75,000,000.00 2024 6500 $369,733,520.00 $0.00 $500,000,000.00 $75,000,000.00 2025 6500 $369,733,520.00 $0.00 $500,000,000.00 $75,000,000.00 2026 6500 $369,733,520.00 $0.00 $650,000,000.00 $97,500,000.00 2027 6500 $369,733,520.00 $0.00 $750,000,000.00 $112,500,000.00 2028 6500 $369,733,520.00 $0.00 $1,000,000,000.00 $150,000,000.00 2029 6500 $369,733,520.00 $0.00 $0.00 $0.00 2030 6500 $369,733,520.00 $0.00 $0.00 $0.00 2031 6500 $369,733,520.00 $0.00 $0.00 $0.00 2032 6500 $369,733,520.00 $0.00 $0.00 $0.00 2033 6500 $369,733,520.00 $0.00 $0.00 $0.00 2034 6500 $184,866,760.00 $0.00 $0.00 $0.00 20 Year Total 6500 $6,504,465,848.00 $1,000,000,000.00 �
Sep 11, 2014
chickensevil Question regarding getting water for this, apparently there is a need to dispose of the water that comes out of the treatment plants and there has been a raise of standards in what can be dumped into the river, as such Tesla will be able to take this water, treat it themselves, use it in the manufacturing process, treat the water again, and then it will be able to be disposed of safely.
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Thank you for that chart, it has a lot of interesting information posted there.
I wasn't trying to contest what you were saying but augment it, because I see a lot of people (not you) posting about how Tesla needs to do their part to hire locally and contribute to education and such... and I just mostly wanted to stress that it isn't a matter of if they are going to do this, and what the gov needs to do to make that happen... the reason being? They have already reached out to the local community colleges and such in order to tap potential talent.
My take on that was that they would work with the college to identify current and future graduates in order to pull directly into this factory. They are definitely going to have to do a lot of training on site. I don't think anyone expects otherwise... maybe in 10 years as people cycle out of their positions and jobs open they will have "advanced battery" science degrees or some such, but I am sure that they will take anyone who has an aptitude to learn and a willingness to learn very quickly, since we don't have a lot of battery engineers out there. For the production level they are outputting these jobs are very technical... It isn't some pull a lever type job... but requires a lot of skill and intellect that a machine cannot handle.
Anyway, it was just something I wanted to get out there, in case there was any confusion, that Tesla isn't waiting for rules to be put in place requiring them to do something but is moving forward with the verbal commitment to hire local. Which, IMO, is very commendable, and makes me love Tesla all the more for it.
But, great chart, I would love to know where you got these projections from, or are they just educated guesses?�
Sep 11, 2014
evme
I understand that, just saying 3 years is not realistic. But what might work is a 2 year program. They already have people who have associate/bachelors degrees in engineering, a 2 year program getting them specialized would work in my opinion. In the first year I expect most people to come from Japan and California and then be swapped out once they train other people. Tesla can probably hit their quotas by having a larger % of construction workers from Nevada early on.
As for the chart, I posted the report a bit back. It is an economic study done by University of Phoenix at the request of the Nevada Governors office and compiled by University of Nevada.
Here is again a link:
http://s3.documentcloud.org/documents/1291115/full-tesla-summary-report-analysis-letters.pdf
To be honest we probably would need a separate thread to discuss the ratification of this, especially what the 5 billion spending in 2019 is for. But I wanted to save that dicussion until after we get the final verdict on the bill.�
Sep 11, 2014
chickensevil I think we are on the same page here, it was just my choice of wording on saying 3 years. I was talking about the broader scope of the timetable to get up and running in 2017. So I meant that pulling kids now that have recently graduated or will graduate soon (say within 1 year) to be some of the first candidates for hire, and have them start now working toward learning and being trained what to do. The 3 years, was more me saying that they are going to be ready by 2017 in order to start production, so that included that training time. If it only takes 2 years, then that is even better. But I don't think they are going to get much on floor training in the factory until 2016 since there won't be a factory to train on, but they might be able to send these people to Japan for said training? If not then we are looking at a very rapid training session of about 1 year. (This is based on Tesla's produced timeline in their released PDF)
The NV 1.3B package and all that discussion could probably be moved over to keep this thread just on the factory itself... but there is going to be a messy split if they did that. Up to the mods, I don't have a preference. I only say this, because we are actually learning a TON of details about the project (or at least I am) that are related to the factory functionality and such, but it is getting all brought up while these bills are being debated... so it won't be a clean split and there would be a bit of crosstalk.�
Sep 11, 2014
CaptainKirk We gonna rock down to Electric Avenue. Gotta love the sense of humour for the address of the gigafactory
�
Sep 11, 2014
GSP Advanced Automotive Battery Consulting has a new report on Tesla's battery focused mostly on the business impact. The full report costs $2800. Here is a link to a free extract on the AABC site:
http://www.advancedautobat.com/industry-reports/2014-Tesla-report/Extract-from-the-Tesla-battery-report.pdf
GSP
PS. It is my impression that AABC is highly respected in both the battery and automotive industries. Here is a link to AABC's home page:
Advanced Automotive Batteries - AAB - Official Site�
Sep 11, 2014
chickensevil I'm home now and tuned in again, Picked up with the beginning of public comments on SB-1. First two guys are pro-Bill, first guy wants an amendment which will mandate fair prevailing wage... I don't particularly see issue with this... but would likely need more details.
Second guy is hitting on the fact that there is no battery factory on the scale in the world like this nevermind the US, so training is a must. He is stressing that there is a tool that community colleges already have in place which will help with identifying people that are apt for these jobs. He hit on the fact that high schools in the south are actually in the 95th percentile. They are CTE schools (not sure what that is). But the problem is that while all these students are doing really well and high graduation rates, everyone is leaving the state. So this plant will actually help influence people to stay in the state once they graduate.
third guy - CEO of trucking association. Pro-Bill. He is excited because the trucking industry will be a major player in this. Their original idea for Tahoe was the idea of manufacturing and they had a study and wanted it to be the massive distribution and manufacturing... but they were thinking about small things... and here this project is which is more than anyone ever dreamed of for the Tahoe center. They were wanting to build out the roads back in 2009, and there were plans even back then, so Tesla is really helping to move this industrial center forward. They wanted this site to be the distribution and manufacturing center of the west. Looks like they might finally see that come to pass
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first negative guy -> but his concerns seem to revolve around wanting training and competing on level terms for pay (I think mostly dealing with contracting work... to avoid massive contracting from out of state) He overall doesn't seem opposed just wants certain securities put in place.
second negative guy -> his caution is about constitutionality (which I believe has been well answered already). His other caution is about picking winners and losers, which is a fair complaint. Next is the payment for highway 50 which is to be built, and he is concerned that the funding for this highway will be pulled from other necessary projects since we all know that roads are always in need of repair and expansion. He is concerned about illegal immigrants (I don't think that will be an issue...) [Mostly I don't see any of this as issues, except maybe the roads, but they have said it won't draw funding away from other projects, and picking winners and losers... which is just a general issue with our american government...]
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Neutral- First guy is with the railroads -> He is confirming from earlier that the railroad spurs will be taken care of privately, not by the state
Second guy (economist) -> GOAD document he says seems really great and well researched, but wants to caution that the output is only as good as the assumptions you make when computing your data. He says this facility is just a builder of components and not an assembly plant which tends to lead to a smaller multiplier. He says the more conservative multiplier might be better to say 1.5 for extra job creation. If this is the case, the total jobs created would come out to over 100k per job. He is stressing the issue of how little time there has been to really get a good review of this document and noone has really countered the document.
Third guy (President Urban Chamber of Commerce) - General rule they are always in favor of new jobs and economic growth. He is stressing that he really wants Tesla to ensure that they are reaching out being diversified to the Women, Disabled, and Minority groups. So he wants provisions to promote and encourage the use of these types of businesses and individuals.
And hearing is finished for public comment. Next stage!
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Thanks for this, I am reading through it now, But this slide really stands out and I want to use this in the future because it really puts it into perspective that noone is as committed to it as Tesla is and only 3 others are exploring anything serious... the rest are all compliance...
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oh, and I missed it, apparently the Assembly passed only bills AB1 and AB3... hrmmmmm What happened to AB2?
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Hmmmm status is listed as "Declared an emergency measure under the Constitution."
I have no clue what the hold up on that was... but it was apparently put off as of last night?�
Sep 11, 2014
evme I didn't catch the whole thing but they said something about it being complex and will be addressed later.
My guess, other bills have been fairly generic and they want to tackle AB2 with/after SB1.�
Sep 11, 2014
chickensevil Wow, plant could be drawing as much of a load as 300MWh of power! That's a lot of power!�
Sep 11, 2014
chickensevil and AB1 and AB3 has passed the senate as well.
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Here is hoping that the important one SB1 gets through both houses just as easily
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SB1 - Passed!
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BTW there was no major comments or pushback or debate or grandstanding or anything... everyone had their issues sorted throughout the session and the roll call went swimmingly. I think something bad would have to happen at this point for it not to pass the assembly.�
Sep 11, 2014
chickensevil So the assembly is up again, they are doing AB2 right now, and the amendment got added but not without it's share of nays. I heard about 5 or six people. This is the first opposition I have seen at all come out in a vote. Sadly it is going to be added anyway... if this is the amendment I think it is, limiting the "window" to Jan 1, 2016 for EV makers to enter the market. I am sure by then the whole thing will be overturned but we shall see.�
Sep 11, 2014
TSLAopt interesting report, but I don't think their estimates and projections are accurate...for example, on page 31 they show their estimates of EV cars sold by company and while they show Tesla selling 35k this year, they only show 50k for 2015 and 80k for 2016 on their chart (anyone who listened carefully to Q2 conference call knows it should be at least 65k for next year).
To me these significant inaccuracies show that they don't really have their numbers or projections straight with regards to Tesla...while the report brings up a lot of good aspects of analysis, the actual numbers within the analysis are not to be trusted.�
Sep 11, 2014
chickensevil Sorry, got sidetracked, AB2 is passed with the amendment. So Tesla can at the very least get their license. I don't know if they modified or revised the text further... so it is very likely the same funky wording... Oh well, once they get their license try and take it away!�
Sep 11, 2014
maoing How many bills total need to be passed? How many left now?
�
Sep 11, 2014
TSLAopt Thanks for all your summaries of what is going on there by the way, it is great to read and keep up with�
Sep 11, 2014
chickensevil Just rehashing SB1 in the assembly at this point, now would be a great time to listen in for a brief synopsis of nice little things about the factory and how awesome Tesla is
Will probably go for vote tonight.
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So AB2 (EV direct sales) needs to be passed by the Senate now, but will likely go without a problem and minimal debate.
SB1 is on the floor right now for the Assembly and is being debated and will get public comment. There is about 30 questions to be asked and such so it will still be a couple hours of back and forth before we get out of the committee and into the voting.
That is it. Once these two complete they will both be on the Governor's desk.
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You are welcome, I am mostly listening in to these for the sake of trying to identify little snippets of "insider" information we can gleam that might help with framing the factory as an investor, but figure I might as well also keep status updates going as well.
------
So the public comments look to be a rehash (verbatim) from earlier. Which means they are just formalities to make these people feel better that they protested or whatever... *yawn*�
Sep 11, 2014
anticitizen13.7 Thanks for the live updates! Any sense of whether this will be a done deal by market close tomorrow? I wonder how the market will react.�
Sep 11, 2014
chickensevil Yeah, I would say it seems likely. I really think they will be finished tonight. I don't know that I am going to be able to stay up for it all. But I think they are on the last of the public comments at this point, and of course they go on and on even though they already said all this... lol. But yeah, I think we should be good tonight. They seem quite pressed to be done with this. At least that is the feeling I am getting. And of course even if the Gov doesn't sign it tomorrow, he started all this, so I don't see why you can't consider this a done deal once the Assembly passes SB1.
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Wow, I missed this guy earlier... He is saying that Lyon County was hit the hardest of all during the recession going up to 20% unemployment and is only now down to 10%... CRAZY!
He is saying that the road changes being suggested are not anything new, Lyon County has been fighting for route 50 expansion in their county for years, and the jobs this brings to the state will directly impact Lyon County. So he wanted to stress that while he is not in favor generally of handouts and such from the government, this really is going to help lives in his area get jobs and improve their lives. Really glad he gave his testimony, because all you tend to hear is the naysayers about how this isn't helping THEIR area directly, and all it is going to do is hurt them, etc... So it is refreshing.
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Another tidbit I missed is that the auditing to keep tabs that Tesla is in line with the bill requirements (to avoid losing the benefits and having them taken back... because there are clawbacks here) is done through a third party auditor, approved by GOED (I think I have that acronym right) and paid for by Tesla. So even the auditing won't come out as an added expense to the state in this. I really think they thought of everything here to make this fair all around to NV and Tesla making sure Tesla doesn't cheat the state out of anything from the money they receive to the employees they hire and for being a "handout" this is really well written it seems.
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So the main road they are building and expanding is not actually being funded through this bill, but is instead going through the normal DOT process they are just accelerating it getting built.
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So what happens when there is a new battery technology, are they able to cover into that new technology? -> Well, I am not an expert, but Wall Street asked this question during the last conference call and they had a great answer at that time
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Something that was asked directly to Elon the other day (that the chairwoman was talking about) was that when they move in how long are they planning to stay and what is their future outlook in Nevada, and at that point he went into how they are very interested in moving the state forward with STEM education programs and are really looking to progress the state over the next 25 years. The Chairwoman said to her, when he was talking about progressing education that was all she needed to know that they were in it for the long haul since you generally don't do anything with education unless you are looking to stick around and see that pay out.�
Sep 11, 2014
FluxCap Elon Musk on Twitter: Official Gigafactory address to be: Electric Avenue, McCarran, Nevada
Love it!�
Sep 11, 2014
chickensevil BTW, so everyone knows what road they keep talking about I tried to draw over top of it so it is easier to see... it pretty much turns to dirt/nothing at the end. But this would really allow direct access up through that area.
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Here, actually even better, Picture showing 2 routes, one cutting through the mostly dirt road of about 17 Miles and the current out of the way route that is double the distance at 34 miles:
So they would be looking to expand/build that road out properly to give a good cut through that area.
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AB2 is passed, My heart sank for a minute as it was going through since they were joking around with the voting machine and like half the people hit nay at the start, I tried to get a screen grab and missed it, they had all went green by the time I got it. So 21-0 passed the senate, all that remains is SB1 getting through the assembly.
With that I am going to go turn in for the night, they are still doing questions, no clue how many they have left. It should move out of committee after that, and into a full vote, so hopefully this happens tonight. They are already past the original 7:30 end time they were shooting for by about 30 minutes now. So hopefully they don't have much more to go.�
Sep 11, 2014
danp Assembly in recess after questions, coming back for a vote on SB1 shortly.�
Sep 11, 2014
AlMc I am sure Chickenevil and danp are also watching.......Looks like a done deal. Just the politicians getting in their final 'face time'.�
Sep 11, 2014
Lump Governor signing in 30 minutes., we have a Gigafactory agreement.�
Sep 11, 2014
danp SB1 passed 39 - 0, without ceremony.
�
Sep 11, 2014
maoing Can this be a positive catalyst tomorrow or early next week? the market didn't appreciate this huge tax break deal much due to Elon's comments!�
Sep 11, 2014
AudubonB Very well done, Nevadans all! What a way to show other states* Just How To Git'er Done!!!!!
*Especially that state just to the left of Nevada......�
Sep 11, 2014
DaveT 
Live coverage: Sandoval signs record $1.3 billion deal with Tesla - Las Vegas Sun News�
Sep 12, 2014
RobStark From AAB report pretty negative on the GF and Tesla although nowhere near Seeking Alpha territory.
Pack cost much below $200/kWh is unlikely before 2020, bringing the proposed 70-kWh
pack for a 200-mile D class EV cost to (or above) $14,000, which is 40% of the proposed
Model-3 vehicle base price of $35k. Tesla could offer an entry-level version with 50kWh
(at close to $10k per pack) but such a vehicle would not quite attain 200 miles per charge
60 kWh gets Model S to 208 EPA miles. Don't see why Model 3 needs 70 kWh to reach 200 but...
Elsewhere they project GF will not get to full production until 2025.
Says rock bottom price for GF is $167/kWh from what ABB estimates is $275/kWh today and implies Samsung/LG maybe able to get below that in 3 years with large format cells because Samsung and LG told them that.
Government Credits are a Bigger Deal than is Generally Acknowledged
California ZEV credits and federal incentive programs could be more important to Tesla�s profitability than discussed publically (SIC)�
Sep 12, 2014
chickensevil Thanks guys, I knew it was coming I just couldn't stay up to see it. Wasn't expecting the governor to sign it THAT quickly so this is really great!
Going to be a slow next two years now... I think the next major thing to look for will be finalizing their deals with the smaller partners like Hitachi and SMM.�
Sep 12, 2014
chickensevil Here is the letter they sent to NV committing to their end of the deal on the education money to STEM and schools in the regions near the factory.
�
Sep 12, 2014
Yuri_G AAB also thinks the Model 3 will be $50k-$80k. Fairly pessimistic, and the hint of pessimism seems to run throughout the whole report. They also predict the next EVs from major automakers will have 120-180 mile range. We'll see if either of those predictions comes true.�
Sep 12, 2014
TSLAopt Yes, and they project Tesla to sell just 50k cars in 2015 when we all know it will be 60k at the very least but could be much higher.
you have to wonder who they make their money off of...I would imagine that other auto companies who are not committed to battery technology yet are interested in this type of report/research and would be most likely to become a battery technology consultant client of theirs (not just buying ths report)...AAB has to therefore cater this report more to to these prospects of theirs and can't make it seem like these automaker prospects are as far behind in trying to catch up as they really are or those automakers may not even bother researching further if they see the reality that they are too far away to, in practicality, catch up themselves with the technology.�
Sep 12, 2014
eepic It could be that they're even downplaying Tesla to tell traditional auto execs what they want to hear. Half a decade from now, when shareholders are grilling them on why they didn't see the EV revolution coming, they can claim that they "consulted industry experts and determined the case for the the price points to allow mass EV adoption was extremely unlikely" etc. Plausible deniability.�
Sep 12, 2014
jhm +1. So is there safety in mediocrity? Whenever I think about shorting traditional automakers, I wind up thinking, "Why bother I? I already own Tesla."�
Sep 12, 2014
Curt Renz As is the case of some Wall Street analysts who rely on the fundamental evaluation methodology they learned in college based on near term quarterly results and outlooks. When a growth stock runs away from them, they can still show their bosses that they precisely followed the conventional formulae, and claim it's the market that must be wrong.�
Sep 12, 2014
jhm Yep, I've got Prof. Damodaran's book right here for just such occasions.
It's funny how in mathematical finance you almost always calibrate you model to actual market prices, but in the case of fundamental analysis, such as Damodaran teaches, they almost never calibrate to the market. Instead, they presume their models are so good they tell the market what the price ought to be.
If you build a DCF model, you should at least derive the discount rate by calibration to the market. The implied discount rate tells you how willing the market is to trade a dollar today for future cash flows of a particular name. Then you could use such a calibrated DCF model to understand changes in market value in the similar way that Quant uses implied volatility to understand how the market values options. The implied discount measures how skeptical the market is toward a particular name, or how much the market prefers a dollar today to future cash flow. However, fundamental analysts think they can both model future cash flows and tell the market what those cash flows are worth. It is intellectual folly to thick you can know both without consulting with the market.�
Sep 12, 2014
eepic If there were a "secret" to wall street, this would be it. Armchair analysts who use textbook methodologies when in doubt, because even if you end up completely wrong you can justify your conclusion and blame it on an unlikely outcome materializing.�
Sep 13, 2014
sundaymorning Every analyst on Wall Street tries to manipulate Main Street investors by claiming to have some kind of fancy mathematical formula that can predict the true value of a company. Let me share this, if I had a secret formula like that, I wouldn't share it with anyone. I'd keep my mouth shut and let the formula do its thing. Don't forget that the loudest person in the room is usually the most insecure.�
Sep 15, 2014
FredTMC
Thanks for posting this. I'm blown away that the Gigafactory will be built in four phases and that GF will actually be in operation next year producing batteries using 700 employees. This is earth shattering news to me. Previously, I thought that GF wouldn't produce any batteries and packs until 2017.
This is four phased production approach makes sense and in retrospect I should've expected this phased production ramp.�
Sep 16, 2014
Model 3 Well, it say there will be 700 employees there next year, but will this 700 be producing batteries? Or will this be construction workers? Or maybe all they work with (in 2015) is to get the equipment in place? And/or training and preparing the production-start? But if this is not just construction workers, then the production for sure will start (in small scale) in 2016. And that is what I believe is the plan. But we can hope that the production starts late 2015�
Sep 16, 2014
hobbes Has anyone been near the GF construction site lately? Are they still moving dirt or something else by now? Maybe we should crowdfund a drone�
Sep 21, 2014
Trev Page Yeah, someone should start a Gigafactory construction thread so we can monitor progress outside of the investor thread. I have a really nice drone but I don't live in Nevada�
Sep 22, 2014
Curt Renz Sunday article from the Las Vegas Review-Journal regarding the speed of the Gigafactory development and how it attracts other businesses to locate nearby: Tesla deal sparks development rush to Reno area | Las Vegas Review-Journal�
Sep 22, 2014
hobbes Nice, factual report. Many other writers could use some of that attitude. Thanks for posting.�
Sep 22, 2014
AudubonB We came <<<<<this close>>>>>>>> to purchasing a really terrific-looking house two years ago in Fernley, NV. A good quarterback could just about hit it from the Gigafactory's roof. At present, there are not a lot of higher-end homes in the area; I'm thinking that even without taking into consideration the distortion induced by Nevada's real estate collapse, that particular home has very easily just doubled in value.
Of course, to capitalize on such a windfall, we would have had to sell it.....at any rate, water under the dam, or something like that.�
Sep 22, 2014
jhm Ok, so who wants to speculate on property near other potential GF sites?�
Sep 22, 2014
FluxCap Some great nuggets in here. Diarmuid gets awesome-er the more I learn about him.
Teslas Deal Architect on the Giga Battery Factory and the EV Market : Greentech Media
�
Sep 25, 2014
gym7rjm LG Chem to supply over 600,000 battery cells to Southern California Edison for a 32 Mwh stationary storage system.
SCE Unveils Largest Battery Energy Storage Project in North America
Looks like the competition is heating up.�
Sep 25, 2014
WarpedOne 32MWh / 85kWh = 377 MS85.
Tesla is building their cars at about 30k vehicles per year or 400 per week. 400 * 85kWh = 34 MWh.
Tesla is effectively building a bit larger system each week.�
Sep 25, 2014
JRP3 Tesla is well above a 400 vehicle per week rate by now.�
Sep 25, 2014
chickensevil Last I had heard they were up over 900 finally (well on their way to the 1k a week).�
Sep 25, 2014
WarpedOne 900 cars coresponds to about 2 "Southern California Edison stationary storage system" each week.
What competition?�
Sep 25, 2014
gym7rjm Sorry.. poor word choice. The competition isn't heating up. But just the fact that LG is entering this market is a good sign. This move provides credence to Tesla's belief that it can sell 15 GWh of battery production for stationary storage with the Gigafactory. The results from LG's test with SCE will hopefully be good for Tesla when the Gigafactory comes online.�
Oct 3, 2014
AlMc Nice article and a picture showing progress at the GF site! http://news.yahoo.com/tesla-factory-near-reno-bet-old-nevada-meet-051448841--finance.html�
Oct 3, 2014
rtz Looks like the building is up?�
Oct 3, 2014
ecarfan Well, the steel framing is going up. Got a few years of construction ahead of them, but it will happen!�
Oct 3, 2014
MikeC Some of it (from the article):
�
Oct 3, 2014
DaveT Wow, looking at the picture of the steel structure it's hard to believe that they made so much progress so fast. I hope that's really the Gigafactory.�
Oct 4, 2014
LakeForest These pictures are NOT the gigafactory. They are "A facility is being built for Battery Systems." This is made clear in this article, right below the picture of construction.
Tesla's ripple effect could touch everyone in Reno�
Oct 4, 2014
DaveT Is there another battery factory being built in that area?�
Oct 5, 2014
LakeForest Yes, it is for http://www.batterysystems.net -A significantly smaller plant.
quote from the above posted article, further verifying it is not the gigafactory.
"Cary Richardson � vice president of Miles Construction, which happens to be building a facility for a different battery company at Tahoe Reno Industrial Center"�
Oct 5, 2014
Cosmacelf Presumably they have tons and tons of concrete to pour first before the framing. And before that, lots and lots of conduit to trench and place.�
Oct 6, 2014
RubberToe Haven't been following this thread closely since the original pictures came out that the guy took showing the grading going on. But there is something that I just don't get, maybe someone here can explain it to me...
Tesla is presumably building one of the largest factories in the world to produce batteries. We know where it is. A guy climbed a hill and took pictures of it previously. There is literally billions of $$$ being invested by Tesla, it's partners, and smaller amounts by most likely everyone perusing this site. Everybody and his brother are flying drones and taking pictures and video from them. There are webcams streaming video of every big project under construction. And there are satellites that you can hire to take images of desired locations, and even a company that is planning on distributing satellite images for free of the entire Earth:
Planet Labs - Wikipedia, the free encyclopedia
Given all the above, I would expect this thread to be filled up with images of the giga-factory under construction. Why is that not the case? There is one picture from the area, and we don't even know whether it is the giga-factory or not
RT�
Oct 6, 2014
chickensevil I would guess it is because we don't have the "boots on the ground" in that area as far as TMC enthusiasts. It is the same reason why some supercharger sites are well documented even going through some of the permitting battles and some supercharger sites we don't know about until Tesla tweets it is online (or the webpage just mysteriously gets updated to reflect it).
I assume that those who have taken pictures previously, it is a bit out of their way to really get anything good out there. If I lived in the area I would try to take a daily picture to do some kind of time-lapse thing, cause I think that would be really cool to document. I will send an email to Tesla asking if they have any plans to post updates, pictures, etc on the progress because inquiring minds would like to know, but I doubt we will get anything.�
Oct 18, 2014
maoing I found an interview report with Panasonic CEO when he visited China recently. The report is in Chinese and I paste the google translate link below:
https://translate.google.com/translate?sl=auto&tl=en&js=y&prev=_t&hl=en&ie=UTF-8&u=http%3A%2F%2Fm.21jingji.com%2Farticle%2F20141018%2F41817e25acc0caf2cd667fd401a2cfbf.html&edit-text=
Some highlights pasted below. It looks Panasonic very appreciates Elon Musk and Partner relationship with Tesla. More importantly Panasonic is very confident about the Gigafactory prospect and is willing to share the "controllable" risk with TM.
1) he admitted that he very much respect for their 14-year-old younger Tesla CEO elon � Musk (Elon Musk), in particular, appreciate the prospective partners and execution
2) Because Tesla positive attitude and action forward, many car manufacturers can not catch up. If Panasonic appear Musker such personnel with excellent execution, whether young or older, I will actively support and focus on training.
3) Panasonic will jointly Tesla battery super plant construction in the United States, a huge investment, why courage and Tesla bundle? How to prevent the risk of huge investments, particularly the risk of overcapacity?
CEO: About the battery super plant project, the production of electric cars Tesla, Panasonic considered to be very valuable new products, widely recognized by society, and not all traditional manufacturers can follow up with their scarcity I believe that Tesla will have broad space for development. According to estimates of sales, even super factory full production, to achieve full load operation, it is not sufficient to fully meet the market demand.
As for risk, focused on the future sustainability of innovation Tesla launch attractive new models, especially in accordance with the existing plan, the new success on the market. Even so, it must not be unworthy, do not worry there is a risk to invest, Tesla pure electric vehicles are now very obvious advantages, even in cooperation with other car manufacturers, there is similar risk�
Oct 22, 2014
evme Tesla has made an application for the Nevada incentives and they released some details:
The application confirmed that the plant will employ 6,500 full-time employees but raised its average wage estimate to $26.16 per hour. Tesla expects to employ 300 workers during the first year of the project, growing that to 2,000 workers by the third year and 4,000 workers by the fifth year. Tesla plans to have 6,500 employees by its eighth year. Initial projections had the gigafactory being fully operational by 2017.
Staffing for the battery plant will include:
� 4,550 production associates paid $22.79 per hour
� 200 material handlers paid $22.79 per hour
� 460 equipment technicians paid $27.88 per hour
� 360 quality technicians paid $27.88 per hour
� 930 engineers and senior staff paid $41.83 per hour.
Wages paid by Tesla for the gigafactory will total $353.6 million per year at full employment The figure does not include construction employment.
Tesla also provided a more detailed breakdown of the $5 billion in capital investments it will make on the facility through 2028. The cost for the building and site infrastructure will be $1.1 billion. Machinery and equipment will account for the remaining $3.9 billion, including materials processing and product assembly.
Source:
Tesla details employment, investment plans for Gigafactory�
Oct 22, 2014
30seconds This is the second time I've seen the decision to put the factory in Nevada described as "tesla relocating" to Nevada. Anyone have some insight here?�
Oct 22, 2014
evme Because relocation sounds like you are stealing business from other states. Tesla is not relocating. Most of the employees on site will probably not even be Tesla employees but Panasonic employees.�
Oct 23, 2014
jhm This is very helpful information. The bulk of employees will be involved with daily production activities, so they will be hired as capacity comes on line. So the ramp up in head count should correspond to the ramp up in production. Of course, some allowance for training and onboarding should be made. As well some engineering and management staff will need to be brought on well in advance of capacity coming on line, maybe about 300 as seen in year 1. But basically it looks like production will ramp up roughly linearly over about 6 years from 2016 to 2022.
Thanks for posting this.�
Oct 23, 2014
Model 3 Am I reading this right if I based on this numbers conclude that the factory will "go online" and start to produce battery cells in the fall of 2016?
Guessing 1. year is about Sept. 2014 - Aug. 2015 and 3. year is about Sept. 2016 - Sept. 2017.
This gives hope that the Model 3 will be on the streets in early 2017�
Oct 23, 2014
Chickenlittle Is there a tax incentive if teslas headquarters address is Nevada?�
Oct 23, 2014
chickensevil I don't know what you were hoping for, but 100k Model 3 in 2017 would be quite good! That would put their total production at something like 250k in 2017! So 60-70k in 2015, 125k in 2016 (just model S/X), and then 150k Model S/X and 100k Model 3 in 2017! This would be better than I was reasonably estimating if true
Because I was actually only assuming about half that amount of Model 3 in the first year and not getting a great ramp up until 2018/2019. Using that assumption I would put the 2018 numbers somewhere around 200k Model 3 and 2019 numbers hitting the cap of 350k.
Final point I would make is that those estimates are likely conservative estimates. They might have them hired much quicker than that.
- - - Updated - - -
I have it on good authority that they are not moving out of Palo Alto any time soon.�
Oct 23, 2014
Model 3 Agree on the 2015 number, but I was thinking the Model S/X production would be hold at 100k in 2016 - the same rate as the line wold have at the start of 2016. From then on all development wold go on the Model 3 line(s) (and the GF). 100k S/X and 150k TM3 in 2017 (so we agree on the total here�
Oct 23, 2014
chickensevil Elon talked previously about the max capacity of Panasonic without the Gigafactory being 150k and if they pushed them really hard they could possibly see 200k cars. So I have always taken the lower of those two numbers, which is where I am seeing the 150k number since I also think 75k Model S and 75k Model X global demand is an easy conservative number for them to hit.
We also know that the Gigafactory output is 35GW but the pack output will be 50GW. The missing 15GW translates to 176k 85kW batteries. So again, if you hold back some batteries for warranty work or battery swap stations or some such then you can easily see that 150 target.
Panasonic has also stated previously about their ramp up of their Japanese factories hitting full capacity in 2016. So all of that lines up pretty cleanly with my estimate of 150k and actually allows for that number to be on the low side (in case the demand to go higher isn't there or perhaps the output of Fremont isn't there to go higher... at some point one of those two will be the issue over just getting a certain number of battery packs).�
Oct 24, 2014
Model 3 Ok, here was some bits I haven't head before. Thanks for the update
Well, I was more concerned with this then the battery supply. Will the Gen-II line(s) have this capacity? And don't forget the stationary battery packs and deliveries to others (Daimler etc). After the GF is fully operative this will be about the mentioned 15GWh. From what I have understood they are planing to produce (or is already producing) some stationary packs, so they need some cells for this too before the GF is on-line.
I'm sure there is a demand to (temporary) go higher then 100k/year, but will this demand be sustained? After the Model 3/Y hits the road? After other car makers start to produce long range EV's? Remember this is expensive cars... They may end up having a lot of unused Gen-II capacity, if this can't be reused on the Gen-III or Gen-IV lines. If it's easy to switch between Gen-II and Gen-III production on the same lines then this is not a problem�
Oct 24, 2014
evme It seems like the general contractor for Tesla is W.G. Yates.
Panasonic is hiring 24 people right now with listings of:
LIST OF TESLA GIGAFACTORY-RELATED OPENINGS
* By position, number of openings and job number
Panasonic Energy Corporation of North America
� Benefits analyst, 1, NV0352905
� General manager of business promotion, 1, NV0352919
� General manager of manufacturing, 1, NV0353097
� Production engineering manager, 1, NV0353096
� Manufacturing manager, 1, NV0352921
� Power equipment engineer, 1, NV0352950
� Facility control supervisor, 1, NV0353098
� Facility design supervisor, 1, NV0353095
� Facility maintenance supervisor, 1, NV0353099
� Finance supervisor, 1, NV0353085
� Human resources supervisor, 1, NV0352899
� Manufacturing supervisor, 13, NV0353102
Source:
Nevada JobConnect posts 28 Tesla gigafactory jobs�
Oct 25, 2014
Words of HABIT Is there a web cam that shows the on-going progress of construction of the GF? Many construction projects use this method. It would be great to see its progress visually.�
Oct 26, 2014
LakeForest Bob Tregilus, who initially broke the story about construction in Reno just posted some pictures of the progress after I asked him about it on twitter. He seems like an awesome asset to the EV and Tesla community! Thanks Bob!
https://www.facebook.com/media/set/?set=a.10152809292785982.1073741828.13684775981&type=3�
Oct 26, 2014
Zapped Looks like Yates Construction has built battery plants before
Nissan North America EV Battery Plant�
Oct 27, 2014
eepic New Nevada document with some details of the ongoing construction project http://diversifynevada.com/documents/Tesla_Abatement_Application.PDF
Below points from reddit
- Breakdown of the capital investment - Attachment "F"
- Building and Site Infrastructure - $1.1bn
- Machinery and Equipment - Building Systems - $300m
- Machinery and Equipment - Module, Pack and Battery Assembly - $2.2bn
- Machinery and Equipment - Materials Processing - $1.4bn
- Breakdown of the construction phases by manpower
- Tesla is now exclusively in phase 1 with phase 2 starting in December.
- Construction will ramp up gradually and be at full force during the spring of 2015.
- Phase 4 is planned to end by the end of 2016 and the last phase (5) will be completed throughout 2017.
Tesla Motors Gigafactory project regulatory filing with outline (40 page document) : teslamotors�
Oct 28, 2014
LakeForest Tesla officially acquired the land for the gigafactory today. Also, the article states that they have already started pouring concrete!
Tesla closes on free Nevada land for gigafactory - Fortune�
Oct 29, 2014
chickensevil Some juicy details in this one. The site is 980 acres and they are getting the option to buy another 9000 later on. That is a huge area for further expansion!!!!�
Oct 29, 2014
xhawk101 Yea why not put the next 10 gf right there�
Oct 29, 2014
RobStark water and other infrastructure?
I think the extra land would be for wind farms and other renewable energy projects.�
Oct 29, 2014
jhm That's pretty much what I expect them to do. When you think about the challenge of doubling capacity every 18 months for about 15 years, what you need are a series of Gigafactory sites where you can expand at a constant rate for 15 to 20 years.
So basically they need enough land in Sparks that they can just continue to roll out 10 to 20 GWh of capacity every year until EVs gain about 50% share of the new car market. This is also preferable to doubling the number of Gigafactory sites every 18 months. Under that model, management spends far too much time negotiating new sites. So it is better to have one site where you can keep expanding for 15 years than 5 sites that you can only expand for about 3 years each. Moreover, this is efficient from a hiring point of view. Experienced employees are more productive. As you expand for 15 year in the same location, productivity continues to increase, labor cost per GWh keeps going down. By comparison, if you have 5 smaller sites that can only expand for 3 years, as productivity increases, you have to shrink head count after reaching full capacity. This is not as attractive for the best tallent, and job preservation works against productivity gains. Basically productivity and jobs are in competition. But when there is a really long expansion jobs and productivity can both increase and there is lots of advancement opportunity to motivate the best performers.
So how does Tesla accomplish exponential growth if a single site like Sparks can only support linear growth albeit for 15 to 20 years? Basically if Tesla launches one new Gigafactory site each year for 16 years, and if each site grows linearly 250GWh capacity over a 15 year ramp up, then that would ultimately lead to 4 TWh capacity with logistic growth by 2045. That, along with some density gains along the way, would be about enough capacity for the new car market. The halfway point is reached in 2030, about 2TWh capacity plus density gains, enough to power half of the new car market. This growth is not quit exponential leading up to 2030; it is just quadratic. But that is close enough to expontial and the longer trajectory to 2045 must be sigmoidal anyway. That is, as EV market share expands beyond 50% the rate of growth must slow down. Otherwise, there would likely be excess capacity leading to a short-term glut.
I worked out this trajectory in a model awhile back, but was reluctant to share it. My concern was that it may well tip off too much of Tesla's unpublished long-term plans. Additionally there was also the personal risk that it would be misunderstood and laughed off. But for myself, I was satisfied to see that there was a manageble path Tesla could follow to supply half the new car market by 2030. Moreover, cash flow from this operation is sufficient to be self-funding given Tesla's cash on hand and other capital commitments from Panasonic. It's one thing to discribe such a model; it's another thing to publish such a model.
So I am still reluctant to publish the model. The key insight behind the model, however, is that sites like Sparks need to be large enough that they can sustain linear growth for at least 15 years. The fact that Tesla has chosen a site that gives them an option on 10x the initial land is consistent with my hypothesis that sites must be large enough for 15 years of linear growth. Further confirmation of my theory and model would be the announcement of another Gigafactory location to begin development within 24 months of the Sparks site, and this second site must also have the option for sufficient land to develop over 15 years. Actually, they should announce this within 12 months, but I can envision special reasons why they may wait longer for the second site. After that, new site announcements should arrive about 12 months apart. Of course, there are other ways this could be scaled which could throw off this prediction. But basically, I'm thinking that they've got the scale about right: each site should roll out 50GWh of capacity every 3 years and repeat this for 15 or more years. So keep my predictions in mind. They may seem crazy right now, but if I understand correctly the magnitude of this transformation of the auto industry and Tesla is truly up for the challenge, then these predictions are just based on the simplest way to accomplish this transformation. If anyone can think of a smarter way to scale to 2TWh by 2030, please let me know.�
Oct 29, 2014
RobStark They are already stretching local water resources for 35 GW.
Where will the auto factories go to manufacture an additional 5-8 Million cars?
Are they going to ship all over the world? Ever decreasing logistical advantages of building GF near Fremont? Or build that capacity somewhere in Nevada. Create cheap potable water out of thin air? Create a 2 million person Tesla City in the Nevada Desert?
Risk diversification is also important. So is politics.
Getting more incentives.
Much like the right of Tesla to sell through factory stores is now enshrined in Nevada law that could happen going forward.
A GF and Auto Factory in Texas to build pickup trucks for example.�
Oct 29, 2014
Cattledog This.�
Oct 30, 2014
mrdoubleb All your eggs in 1 basket - never a good idea. Frankly it gives me the chills every time I realize the only T factory is "thisclose" to one of the hottest fault lines. Plus you have the logistics to think about.
Elon's plans to have (at least) 1 factory in NA, EU, AP each make perfect sense. In fact, we are hearing rumours from time to time here in Hungary that tesla is in talks with neighboring Slovakia... some say it's about a future factory. Between Hungary, Slovakia and the Czech Republic we have several big car factories already for the VW group, GM and even Mercedes. Wouldn't be surprised if they were to build something in this area sooner than we think. And yes, a car factory & GF combo makes perfect sense too.�
Oct 30, 2014
jhm If you are reacting to my theory, keep in mind that the Sparks site is only 1 out of 16 global sites just as large. These 16 Gigafactories would be distributed over all inhabited continents. Europe could have 2 to 4, Asia 3 to 6, North America 3 to 5, and the remaining 3 to 8 go to South America, Africa and the Middle East.
I know this scale may seem fantastic, but what we are talking about is displacing about 75% of the global oil industry over 30 years. So this is actually fairly modest from that perspective. Much less land will be taken up with Gigafactories than are currently taken with oil fields and refining, and much less shipping will be required too.�
Oct 30, 2014
gym7rjm 7000 of the 9000 acres are for a potential wind farm. However, the left over 2000 acres could account for either a future factory, two additional gigafactories, or one of each.�
Oct 30, 2014
chickensevil In contention to the water scarcity claims, my understanding of that is Tesla is actually HELPING Nevada out since the water they are going to be taken is wastewater already, they are going to clean the water to whatever degree that they need for the factory and then clean it again before it gets dumped back into the river (or whatever). This is the green way to get your water and is basically non-impact to the environment if I am understanding this correctly. What I am saying is that the water Tesla will be receiving isn't potable as it stands already, and I don't know that when they dump it out it will be of potable quality, but it will definately be in a "cleaner" state than when they received it which makes it a net gain for the environment.
About Fremont being on a dangerous location ready to be wiped off the planet, that is a little bit too extreme don't you think? That factory has been there in some form or another going back to 1962 and there have been at least 45 earthquakes in the area with a magnitude of 4.4 or greater. That is almost one major earthquake a year. The have refurbished the site at least twice and earthquakes are pretty much no big deal to modern architecture. And mind you there were 6 earthquakes with a magnitude of 7.0 or greater. I am certain it would take some crazy 9.0 magnitude to cause real serious harm to the factory which going all the way back to the late 1700s there has only been a recording of 7.9 at the top end. If you don't think they built the factory with a potential 7.9 in mind then I don't know what to tell you.
Back to the gigafactory. It was stated in the article that 7000 of the acres was to be used for Wind farms. So that actually only leaves them an extra 2000 acres to play with. So I would look toward the potential of them adding 2 more like sized factories in the area bringing the total capacity up to around 120GW. It might become a little unrealistic at that point to add more in just because the logistics of having that many employees come into that area might not be feasible. You are talking almost 20k employees at that point for just Tesla and not counting any of the other industrial centers that already exist there. If they ramp up further at that site I would not expect it to happen soon because the infrastructure just won't be there to handle it.�
Oct 30, 2014
AudubonB Thanks for that reiteration, BadChick. Here is another way to look at it:
*try to isolate locations on the earth that are neither within X miles of a known active seismic trace; away from potentially catastrophic tsunami; outside tornado, hurricane or other atmospheric disaster zones;
*go through other BigActsOfGodZones;
*and outside conflict zones;
*and outside socioeconomically parlous situation locations;
*....
eventually, all that will be left is, umm, south-central Sweden?�
Oct 30, 2014
RobStark Nonsense.
The biggest water source for Giga Factory involves an aquifer that's a thousand feet underground, has about 30,000 acre-feet of water (9.8 billion gallons) and serves only Tahoe Reno Industrial Center. This water is pumped throughout the park to numerous tanks, which then pipe the water to individual businesses. This is something that TRIC owner,county commissioner, and all around Nevada big wig Lance Gilman secured long ago by legal and perhaps not quite legal means. This is water that is not being used for drought stricken Reno Sparks but is part of the natural resources of Northern Nevada.
A second source is water rights to the Truckee River.
A third source involves reclaimed water. The industrial park is a closed-loop system, meaning that when companies use water and it goes down the drain, this water is pumped to the center's own treatment plant, which cleans up the water and stores it in an above-ground reservoir. This water is for limited and specific purposes.
The logistics of moving those battery packs to auto factories, the logistics to feed the factories from water to rail and roads to local schools for employee children becomes unrealistic particularly when getting tax breaks. And Elon has stated those tax breaks are necessary to make the GF economically viable.�
Oct 30, 2014
chickensevil You will have to go back through archived videos (I assume their sessions are achived) to get the exact wording surrounding the discussion but this is what I had posted as I was watching the active discussions happening in Nevada while they were debating over these bills and incentives:
So I assume that is this "third source" of water to which you were referring. From what I remember from the way they were talking about it, either this would be their sole source of water or at least their primary source of water for the factory. Again, you are welcome to go back to the timestamp of when I made that comment and pull up the archives of the senate/house sessions as they were talking about these matters. But for now, I am going to trust what was stated back then regarding this water supply, since Tesla has given me no reason not to trust them.
I mean do you honestly think that given how much we know that water is a problem these days that Tesla as a "eco-friendly" company out to save the world from itself own destruction would suck away precious and limited water supplies of fresh water for their batteries? That just doesn't at all fit in line with the company's mission statement and if true, I would have a nasty letter I would be writing to them about this.�
Oct 30, 2014
GenIIIBuyer Very true. Much cheaper to generate electrons locally, or 'ship' short distances if needed than oil. I think people need to start thinking about this in terms of increasing societal efficiency, starts to make sense when viewed from that angle.�
Oct 30, 2014
AudubonB Has anyone even a WAG regarding what the Gigafactory's water consumption profile may be, or is this discussion all rotating around a PIOYAWAG? I'll let you dissect that acronym....it's not family friendly.�
Oct 30, 2014
Model 3 Close! Very close�
Oct 30, 2014
jhm Awhile back Musk was interview on Fox Business, IIRC. He was asked about how many jobs the Sparks Gigafactory would produce. His answer was 6000 to 6500 at full capacity, but that by 2020 that could grow to 10,000. I believe this response is consistent with the possibility of building out more than 50 GWh capacity. At full capacity, about 120 fulltime employees are need per GWh of annual capacity. It does not make sense after years of production productivity would decline such that 200 employees would be required per GWh. Alternatively if over 6 years capacity doubles to 100 GWh per year, then productivity increases to 100 employees per GWh, a 20% gain.
Extrapolating this experience curve out to 200 to 250 GWh, we could envision the number of employees dropping to 80 per GWh. Thus growing this site by 50 GWh every 3 years for 15 years gets to 250 GWh capacity and just 20,000 employees. Additionally note that this drives labor costs from about $10/kWh down to $6.70/kWh. Still in either case, labor is not a huge driver of cost.
Given other jobs created by these primary jobs (3 to 4 per Tesla job) and family members (1 to 2 dependents per employed person), this leads to adding maybe 80,000 to 160,000 residents to the Reno region by 2030. This is solid population growth, but it does not push millions of people into the region.�
Oct 30, 2014
chickensevil As my scientific answer I'm going to go with "not much". Everything I am seeing says the ONLY part of the process where they would possibly want/need water would be during the formation of the annode. This is because they have to heat up the lithium (and other metals) to melt them down from a powder to turn it into a solid piece when it cools. So they heat it in a furnace then cool it with water.
Outside of that you actually not only don't use any water but water would become a contaminant. When they go to assemble the cells it is VERY critical to have a "dry room" this is like a clean room except the emphasis is on making sure there is absolutely no moisture in the air.
So I am not sure what Rob is seeing that would require a large amount of water, and since they are just using the water to cool down the annode it likely doesn't even need to be very "clean" water.
- - - Updated - - -
https://www.google.com/url?sa=t&source=web&rct=j&ei=FuFSVNzUK_G1sQTep4GQDA&url=http://www.transportation.anl.gov/pdfs/B/836.PDF&ved=0CB8QFjAB&usg=AFQjCNF0-faxfdwo1is1FyfMKzBd5EPdKw&sig2=9ir_HBjP4CyRDqYbqLZi3w
Hopefully that link works it describes the process and requirements quite nicely.�
Oct 30, 2014
ecarfan Perhaps the anode components could be cooled in a refrigerated room which would be powered by local renewable energy produced by Tesla, thus reducing the need for water?�
Oct 30, 2014
jhm I thought Rob's water concern was about building a home for 2 million people, Tesla City, in the Nevada desert. But as I estimate above, I don't see the population of Tesla City getting much above 160,000 by 2030. I don't know much hydrology, but this does not strike me as being too much of a population demand on water. Maybe Rob had some other water concern in mind.
Regarding water usage, I would point out that coal and other thermal electric power source use alot of water. Solar and wind do not. It appears battery production might not use much either compared to other industrial activities. Thus, the Gigafactory may be particularly well suited to maximize economic output for minimal water input. So you could frame the question this way, given the water limitations of the Reno area, what is the best sort of industrial development for the area to get the most economic benefit for minimal water input?�
Oct 31, 2014
chickensevil Considering we use more water in the farming industry than anyone could ever think about consuming directly in their house (vice indirectly from their food) I would have to say that should not be that much of a concern. There are also quite a few lakes nearby which makes Reno/Sparks a decent area for growth, much like how vegas is pretty close to it's own water source, and why most of the rest of NV is pretty devoid of population comparatively.
Rob's comments about where they get water from were directed at the industrial park specifically, which is why I commented about not finding any real evidence of water requirements in a battery making process (unless we are talking lead acid batteries... those needed quite a bit of water)�
Nov 1, 2014
Robert.Boston Gotta love that a lot of people working at the Gigafactory will live in Sparks. Almost as good as having a Supercharger in Edison NJ.�
Nov 1, 2014
chickensevil Yeah that SC is like Nik giving the middle finger from the grave�
Nov 1, 2014
Robert.Boston OTOH, the Supercharger are ?DC, just like Edison would have wanted.�
Nov 1, 2014
JRP3 The output is, however they are powered by 3 phase AC, the way Tesla would have wanted :wink:�
Nov 1, 2014
Auzie NT likely did not have it in him whatever it takes to express oneself with such a gesture. Not that I disapprove of such expression, often it is well placed.
I think NT just wanted efficiency in transmission, not AC per se. Perhaps new homes will be DC wired in the future, if we switch to distributed grid with local power sources.�
Nov 1, 2014
chickensevil Before he came up with AC he greatly improved on Edison's DC stuff, so really we have him to thank for both forms of power�
Nov 2, 2014
Auzie Lets settle that we enjoy the fruits of a team effort :smile:
It is a shame we missed on free wireless transmission through stratosphere. :crying:�
Nov 3, 2014
austinEV Was that real? I have never read a convincing explanation for how that wasn't junk science. Then I read about the "earthquake machine" and Tesla's credibility is stretched thin, right?
I mean, I am well aware he invented a lot of real things too, but these other things seem fanciful.�
Nov 3, 2014
chickensevil During the earthquake machine timing (while he was in Colorado I believe) there was mysteriously an earthquake in Russia that wasn't anywhere on any fault lines or what have you.
And no, I don't believe it to be junk science, there are charged particles in the ionosphere. Ben Franklin proved that Lightning was electricity. I believe the concept was to pull in that same imbalance in the atmosphere that causes lightning in order to generate electricity. Then you could transmit that power wirelessly to all devices within the radius of the tower. Sadly, we lost most all of his research notes when they pulled his funding, he died alone in his apartment, then the government in their great record keeping methods "lost" a lot of Tesla's research.
(totally sorry for the continued topic derail)�
Nov 3, 2014
jhm So what Gigafactory related announcements do we expect or hope for from the upcoming CC?�
Nov 4, 2014
chickensevil Other than possibly giving a more defined timeline (or an update to the previously given timeline)... None. Just a comment about how the gigafactory is still on track for production in 2016/2017 will be likely all we will get. Anything more would be nice, but I don't know what else there is to say at this point about the subject.
Edit: Although, comments about how the buildout will affect their spending over the next year or so would be nice, since I believe most of the money Tesla is going to spend on this project is happening between now and the end of 2015.�
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