Sep 4, 2014
MartinAustin Yeah you gotta assume it's a 24hr operation... keeping those machines churning!!!
6500/3 = 2166, and the shifts can be staggered for different types of workers, so there won't be 4300 cars all trying to switch places at the same time.�
Sep 4, 2014
chickensevil You are thinking about this too deeply... it doesn't even show the train tracks cutting through the area. Which is actually where most of the deliveries will be coming from (and shipping out).
I also count 56 parking "dividers" zooming in on the image it looks like each row supports about 10 spots per side or 20 spots (just going to ignore the ends) which would be 1,120 or so parking spots so it does seem a little low for parking, but they are likely to have tons of carpooling and ride share and commuting programs in order to reduce the need for a ton of parking. Think about it, if everyone took a car load (4 people) there would be enough parking for 4,480 people. There is likely to be bus routes and such to and from this building... and given that this is very likely to be LEED Gold Certified they are probably going to require green cars and commuting in order to get a parking spot at all... otherwise you can take the bus (or company shuttle, or whatever they work out).
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I guess my point is, this is an artistic rendering and it will likely look a bit different down the road.�
Sep 4, 2014
CalDreamin Industrial plants that must operate 24/7/365 have four teams of shift workers. Shifts rotate between three teams on and one team off. I've no idea if battery factories operate that way.�
Sep 4, 2014
chickensevil News report from New Mexico... this is really sneaky news info from their governor because they really feel confident there will be a second factory and they are already wheeling and dealing for it
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Another video for New Mexico information. From Albuquerque's perspective.
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"Our incentive package was so good, Tesla asked if we can just move closer to California because proximity was a big deal"
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News report from Nevada perspective... obviously very positive angle reporting here.
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Sep 4, 2014
bollar I teleported to the future (next Tuesday) and asked Siri.
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Sep 4, 2014
chickensevil See I was going to suggest you used Shazam or some such and just played the song into your phone that way, close enough!
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So a thought occurred to me, with all this talk about a second factory, we might need a second thread to discuss all of that now, so we can speculate and post!�
Sep 4, 2014
ItsNotAboutTheMoney In Maine, Bath Iron Works employs just over 5,000 workers. You see park and rides all over the place. I suspect there'd be a lot of multi-person transportation encouraged, but I doubt you'll see any BYD electric buses,�
Sep 4, 2014
Jackl1956 A "Net Zero Energy Factory" of this scale will change manufacturing worldwide.�
Sep 4, 2014
Chrisr400cc Is there any way to watch a replay of the announcement? I got cut off right when Elon got up to talk.�
Sep 4, 2014
jhm This is what sunbelt politicians should be thinking about, how to get other businesses to come in and transform sunlight into manufacuring jobs. Arizona is particularly assbackward when it comes to solar energy. Could this be why its not getting one of the three Gigafactories?�
Sep 4, 2014
Tyl This factory and every new factory of this magnitude will need to be Platinum LEED certified to meet Elon's standards. Gold LEED certified will not be good enough!�
Sep 4, 2014
30seconds A net zero factory is also a great way to increase margins. The build out costs are capitalized and then the lower ongoing energy production costs go straight to bottom line.�
Sep 4, 2014
Cattledog If the next factory is for fixed storage, there's probably an optimal location for that so that the storage packs travel the least distance (California and Texas come to mind.) If the next plant is for cars, it seems pretty obvious that the next gigafactory will be next to the next car plant. So whatever city/state/country gets that probably gets a twofer.�
Sep 4, 2014
MuskForPresident Does anyone know where they get the $100B of economic impact over 20 years = $5B/year number from? If they have 6,500 workers making $25/hr = $50k/year that equates to $325MM in salaries paid/year.
How does that equate to $5B in economic impact?�
Sep 4, 2014
LakeForest Factory appears to have gotten upsized. 15 million square feet vs 10 million, and 50 GWH battery production versus the 35 GWH previously stated.�
Sep 4, 2014
BlueTan85 How much water will this factory require? I assume minimal. Is water at all used in any of the stages of manufacturing batteries? Just curious.�
Sep 4, 2014
jhm Excellent point. The cost will be depreciated, but over 20 years or so it won't be much per year. And it won't impact cash flow.
Another interesting angle is that Tesla will get electricity from the grid at a discount for 8 years. So let's see, you have net zero electricity needs, 100s of MWh of battery packs lying around needing to be tested, and the grid will sell you electricity at a discount. What to do? Sell power back at peak prices for a profit, perhaps. Looks like NV won't be needing those old oil fired peakers any more.
Edit: Could depreciation reduce the tax liability? If so, then the renewable power assets could have a net positive impact on cash flow, so long as the tax savings are inexcess of maintenace expense.�
Sep 4, 2014
aronth5 Would love to know what on Peterson is thinking after today's Gigafactory announcement especially when he expressed these sentiments last year. Haven't heard from him in awhile so maybe he has seen the light!
"I see no reason to believe that Panasonic will spend another $200 billion of shareholder capital to expand manufacturing capacity so that it can sell batteries at a loss in order to help Tesla reach an industry beating 25% gross margin target. When it comes to the giga-risk of a giga-factory and related raw material supply chains, Tesla will either have to pay the piper or go it alone."
http://seekingalpha.com/article/1657582-teslas-crushing-battery-supply-constraints�
Sep 4, 2014
jhm This article is quite good, http://mobile.nytimes.com/2014/09/05/business/energy-environment/nevada-a-winner-in-teslas-battery-contest.html?partner=yahoofinance&_r=0&referrer=�
Sep 4, 2014
FluxCap Honestly, as I read through the incentives, this is a huge reduction in the top line of Tesla's future expenses. I haven't modeled it, but I seriously doubt many analysts had predicted incentives this good in their cost models for the gigafactory and, in fact, for Model III production.
So exciting.�
Sep 4, 2014
ggies07
yes, thank you, expect for the fact the author still thinks it's a factory for Li-Ion batteries instead of just batteries. Elon has already said they can switch out the formula as quickly as they need to. To the author - C'MON Man!�
Sep 4, 2014
AudubonB That impact comes through the multiplier effect. Each high-quality manufacturing job should generate about three other full-time jobs - retail, service, other trade, education and so forth. These are REAL, not hypothetical impacts. So the 6,500 direct Tesla-jobs should expand to something like 25,000 total jobs created in Nevada.
By the way, service industries....especially Nevada's gambling....have a minuscule multiplier effect. Casinos' ancillary jobs created are low-quality and relatively few. The state absolutely needed a keystone manufacturing opportunity like the one Tesla offered - it absolutely will have an demonstrable and large positive effect on Nevada's economy for decades.
Well done to all.�
Sep 4, 2014
FredTMC yep. More than I thought too�
Sep 4, 2014
Clprenz More than Tesla even asked for, Analyst should see this as a big upside or about $750 million in savings�
Sep 4, 2014
jhm Another tidbit, the $5B price tag is $1B for the building and $4B for equipment. Also another $5B in scheduled equipment replacement over next 10 years.
Possible implications:
1) Tesla has enough capital in hand to build the complete factory and furnish more than 25% of the equipment. IIRC, Panasonic will kick in another $1B, or 25% of the equipment cost.
2) Tesla will burn through $500M to $1B in equipment per year. At 50GWh/yr, that is an equipment cost of $10 to $20 per kWh.
3) Labor cost at $50k/yr/head x 6500 head is $325M/yr, implying labor cost of about $6.5 per kWh.
4) Energy costs at net zero could imply $0 per kWh.
5) If material costs are under $83.5 per kWh, then total cost of materials, equipment, labor and energy is between $100 and $110 per kWh.
6) NV tax benefit is about $1.25 over 20 years, say $62.5M per year, a savings of $1.25 per kWh.
So it looks like Tesla may have a path to $110 per kWh, and Nevada tax breaks are not decisive for getting there, reducing the after tax cost by only 1%.
Moreover, Tesla and Panasonic have the capital to furnish 50% of the initial equipment. Another $2B may be required. But if Tesla is able to generate say $200 revenue per kWh then there could be about $100 per kWh net cash flow, which is about $2.5B net cash year operating at 50%. In other words, half a Gigafactory could finance it's own completion from its own cash flow within the time it takes to ramp up production. There may be no need for more capital to be raised for this factory.�
Sep 4, 2014
AlMc In addition, it sets a nice 'bar' for other states and as Clprenz indicated, should be picked up by analysts as a savings for TM/partners. Not getting the GF should ramp up the pressure on Texas...My pick for the next NA manufacturing and GF ( I still think China gets one first ) although I am hoping that good old Delaware gets one. TM...are you listening...You are incorporated here (isn't everyone!), no sales tax, east coast location with a good port, excellent business climate.(.incentives and Chancelory Court).....�
Sep 4, 2014
chickensevil Yeah no one here was expecting this major of an incentive since everyone thought Texas would have the mist money to give... And we all saw their deal. So this is crazy good on many levels. Hopefully it contributes toward Elons suggestion that they might beat the 30% cost reduction
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I like where your head is at with all of this I do, so hope this doesn't deflate your bubble too much, but they said in the last conference call that about 4 Bn would be spent getting it up and running by 2017 and then another 1Bn would be spent getting to full speed. The 5Bn in replacement costs is a new thing so I don't know what to make of that, but just throwing out that they still need 4Bn to get it rolling.
On the other hand they could use this to fund the second factory
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What about power generation? Delaware is far too north for Solar to be amazing... Useful, just not amazing... Could do off shore wave power generation, maybe? But I just don't see anywhere on the east coast being a choice right now... Unless I missed something.�
Sep 4, 2014
Jackl1956 How will Harry Reid lead the Senate on Tax Incentives for EVs? Just thinking out loud.�
Sep 4, 2014
RobStark Depends on which party is in control of the Senate next year.
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Nope, Delaware gets Fisker. :crying:�
Sep 5, 2014
AlMc Thanks for reminding me.:wink: Delaware took a bath with incentives for the 'first Fisker'. :cursing:
I actually suggested Delaware as more wishful thinking than reality.�
Sep 5, 2014
jhm Not deflated at all. It's just a question of how quickly to ramp up. $4B up front gets us the plant plus 75% of the equipment. If they could install that much equipment and hire and train enough employees to run it all within 12 month of initiate production, that would be quite remarkable. I'd be delighted. I'd also be satified if the roll out took four years, installing $1B, quarter capacity, per year. So I'm not worried whether the ramp up is two years or four. Moreover, when they are developing concurrent gigafactories, it will be the aggregate installation rate that matters most to investors. Until they have to start replacing equipment, each $1B in equipment will add capacity for about 125k cars, or 12.5 GWh per year. So the aggregate installation rate must be tied with the overall growth of the company.�
Sep 5, 2014
Robert.Boston Delaware is actively pursuing offshore wind generation. The wave regime off Delaware isn't energetic enough to make wave energy conversion there cost-effective (at least with any tech I know about).�
Sep 5, 2014
eepic A rough approximation of economic output coming from the GF in terms of finished goods coming out?
50 GWh = 50,000,000 kWh
$100/kWh x 50,000,000 = $5B�
Sep 5, 2014
Robert.Boston It'd be great to assemble evidence about the scale of Nevada's incentives relative to the scale of similar incentive packages. My off-the-cuff reaction is that this is a generous but not unprecedented package.
For example, South Carolina bid hard to get a BMW facility. This document shows that South Carolina put $115 million of incentives PLUS expansions of infrastructure and other goodies, to land a $250 - $300 million plant employing 2,000 people. There's a good story on AP recently summarizing the debate as well as the benefits of the plant.�
Sep 5, 2014
Krugerrand What did the other states offer, since it was clearly stated Nevada didn't have the biggest incentives? That alone should be telling a certain segment of the population that Tesla doesn't make decisions based solely on 'show me the money', but rather what's best for all. But that'll be ignored but a certain segment because it doesn't fit into their 'story'.�
Sep 5, 2014
Johan So guys who are we betying on will provide solar panels for the GF??? It will be a huge order. My money is on SPWR or JASO.�
Sep 5, 2014
chickensevil Surely it will be all SCTY... why would it be anyone else?�
Sep 5, 2014
RobStark Lets not get carried away. Elon said that incentives were not the most important but speed. He said Nevada's main attribute is that it has a get things done attitude. He said Nevada is a "get things done State." And that is why he would encourage other companies looking to expand to come to Nevada.�
Sep 5, 2014
ItsNotAboutTheMoney http://www.reuters.com/article/2013/11/10/us-usa-boeing-assembly-idUSBRE9A80FB20131110
I believe that WA's $8B over 27 years was biggest. They'd already given them a $3.2B break.
But, in 2014 Boeing and its subsidiaries have 81,452 employees in WA, so that's $3,637.68 per employee-year.
Tesla's $1.25B for 20 years for 6,500 employees is $9,615.38 per employee-year.
Of course, there are lots of other indirect benefits and NV certainly would stand to gain hugely just from the success of the Gigafactory, because if batteries become cheap enough, NV's renewable energy resources would increase in value and I'd expect them to see a lot of investment.�
Sep 5, 2014
Johan Panels... Do you think SCTY's manufacturing will be able to handle that order???�
Sep 5, 2014
Krugerrand And it was also stated that Nevada did not offer the most incentives. But by all means, tell me who the deal is bad for?�
Sep 5, 2014
RobStark By the time the GF needs them yes.
The GF will not be installing their solar panels before June 2016.
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I am not disputing the fact Nevada did not offer the most incentives.
New legal business are not bad for anyone. The point is Nevada was not chosen for the betterment of man but because Nevada offered a competitive incentives package and the speed with which the Nevada government can approve the incentives ,permits, and other sundries Tesla will need.�
Sep 5, 2014
Krugerrand That is narrow, superficial thinking particularly when you know the purpose for Tesla in the first place. All decisions made are specifically to reach the end goal, which will benefit all.�
Sep 5, 2014
bonnie Oh don't mind us here in California. We're trying to find our way out of all the red tape muck and mire that cost us the gigafactory deal. It's easier to just be in a bad mood about it all.�
Sep 5, 2014
RobStark This is fantastical thinking.
The end goal,which benefits all, can be reached by building the Gigafactory in Arizona,California, New Mexico, or Texas.
The reason Nevada was chosen was the speed with which State and local government can process things. That was the competitive advantage for Nevada.
Elon himself said the same thing. Elon starts speaking at about the 13:45 minute.
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Sep 5, 2014
bonnie I think the point is that reaching the end goal sooner is of benefit to mankind sooner. And that was Nevada's competitive advantage.�
Sep 5, 2014
RobStark Well, if you are going to spin things like a K Street firm any option Tesla might take is for the betterment of Tesla and therefore mankind.
Bigger profits will allow Tesla to reinvest in more Gigafactories and Auto factories sooner so seeking the highest profits possible and highest incentives possible is for the betterment of mankind.�
Sep 5, 2014
BlueTan85 Also, Sparks averages ~253 days of sunshine annually and ~5 in of snowfall annually.
How does that impact Elon's claim that the factory is energy self-sufficient?�
Sep 5, 2014
Curt Renz The project will include a wind farm. Solar energy still radiates through clouds, although at a slowed pace. Meanwhile, the factory will be producing battery packs that allow stored energy to be released when required.�
Sep 5, 2014
wk057 Musk mentions solar, geothermal, and wind. I'd assume there would be substantial battery based storage as well.�
Sep 5, 2014
chickensevil It is also stated at Net Zero Energy. This doesn't mean self sustaining... it very much still depends on the grid for any downtime periods or any lack of your own energy production. They will assuredly have stationary storage to mellow out their power curves but having enough storage to capture that much energy would be likely 200+ MW of power (just a rough guess, that is likely too low... I don't remember if they mentioned energy production needs anywhere else)
Anyway, the point would be to pull from the grid when you are too low on power and push to the grid when you over-produce, again having what batteries you can to mellow those fluctuations out so you don't pull or push as much in either direction. But being tied to the grid will also allow them to have a backup plan to keep up production should a core piece of their energy production drop off all of a sudden.�
Sep 5, 2014
Theshadows Reno is 39.50 north and Wilmington is 39.67. Stated another way it's slightly less than 12 miles further north.
Using NREL weather data Wilmington gets 4.69 hours of sunlight per day vs Reno at 5.94, both if which are awesome compared to Germany's 2.8 sun hours per day.
Deleware is an awesome candidate for solar energy.�
Sep 5, 2014
AlMc Thank you Mr. Shadows! :biggrin:�
Sep 5, 2014
chickensevil I think it is more than just latitude though. There is a reason the hottest part of this map is in the middle of the desert. Reno is in the red/orange zone whereas Delaware is in the yellow/green zone. I am not saying it wouldn't be worth it to use solar, just not as good. You are talking about 4.5kW vs probably closer to 6kW between the two areas.
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Sep 5, 2014
Theshadows I do the calculations every day. The numbers I quoted are solid and irrefutable. The colors on those maps mean nothing. What matters is the NREL data I quoted above.
You can change the feel by changing the colors of the maps. Below is the official NREL map that takes the full scale into account. When looking at this map you can see that there is a difference, however it is not nearly as large as most maps make it out to be.
If all Tesla was concerned about for the gigafactory was solar insolation then Arizona would have won hands down.
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Sep 6, 2014
Model 3 Speaking of which, here's an article (Norwegian, use google translate) on a coal mine(!) at 78 degrees north, which is testing the use of solar to reduce their consumption of fossil fuels to meet the energy demand.
So, you can see that the next solar powered GF may end up in Alaska�
Sep 6, 2014
Cattledog I agree that they will tie to the grid for back-up/start-up purposes, but wouldn't it be great if the gigafactory was also a proof of concept for stationary storage? Not a couple of megawatt-hour tester project like at the Tesla factory, but as you suggested, 200+ mWh of storage so the factory runs 99.99%+ of the time with renewables or onsite, stored energy. 200 mWh is .4% of one year's full battery production at the plant, almost a rounding error. Would be a great way to show industrial, distribution, warehouse developments of the future a clean way to energy independence. Even though it won't be here for a few years, 200 mWh of storage at $100/kWh is $20M.�
Sep 6, 2014
electrictorque I have an idea. what if we started a crowd funding to help Tesla's raise money for the gigafactory? would most longs donate $100 bucks each?�
Sep 6, 2014
AudubonB Well, if they run with Model 3's last line (post #1536, two posts up), I'll even donate $200! :-D
H*ll, I'll even donate the 1,000 acres.�
Sep 6, 2014
mershaw2001 I'd put a few hundred into it, but if they gave a decent interest rate (like 4%) or made it like stock (so there was some upside if tesla succeeded) I'd buy several thousand simply to support the company.�
Sep 6, 2014
Jerpo I think it is quite obvious they will use SCTY -- whether SCTY manufactures them or purchases the panels, they will want to use SCTY for their financing abilities so as to reduce capex of the facility...
Also I wouldn't be surprised if they rush it to pre 2017 to take advantage of the tax credits, regardless of if the GF is complete or ready for the panels, the %30 incentive is pretty large.�
Sep 6, 2014
Johan I agree on that SCTY will be the provider, but I was thinking more panel tech wise. In my mind SCTY's purchase of panel manufacturing ability was more of a long term strategy but hey, if they can produce enough of their own panels to supply the GF then all the more kudos to them.�
Sep 7, 2014
chickensevil You do realize that both maps show exactly the same thing just with a bit of a difference in the colors... not sure what you were trying to prove there. They are both generated off the same NREL data, albeit from data that caps at 2005. So unless something drastic has changed in the past 10 years it would be pretty close to accurate. Given how the NE climate has been unusually cold this summer and decently cloudy most times and the SW has been in an ongoing drought (which means less clouds in the sky to block the sun), this has likely shifted even further in the favor of solar in the SW.
BTW your map puts DE at 4.5-5.0 and the Reno Area at the 6.0-6.5. Which is exactly what I said. It is more than just sunlight that you have to take into account.
But let's be honest, proximity to Fremont was a very critical factor outside of just "optimal renewables" or I agree, they probably would have went with AZ.
Maybe when and if they put a factory on the east coast (car and battery) then DE will become a state to consider.�
Sep 7, 2014
Tyl Dirt... they are moving lots of dirt. ...but to see it up close you will have to use a drone with a GoPro! A really friendly guard lady at the security gate wouldn't let you go inside the gated area, but there are plenty of foothills in the area you can climb to see them moving dirt... lots of dirt. I wasn't into foothill climbing that day and I do not have a drone with a GoPro. Phooey! My superman flying skills are really rusty soooo... all I have are a few photos of them moving dirt ... from quite a distance away
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Sep 7, 2014
chickensevil Interestingly when you combine the other two energy types, you get a really great mixture of renewables in the SW region of the US no matter where you decide to build.
But yes, offshore wind is quite good no matter which shoreline you choose.�
Sep 8, 2014
AlMc Nice article about details of the GF deal: http://www.rgj.com/story/news/2014/09/04/nevada-strikes-billion-tax-break-deal-tesla/15096777/�
Sep 8, 2014
ecarfan I was very surprised to hear him include geothermal. I was not aware that there was a geothermal energy source in that area.�
Sep 8, 2014
chickensevil Please check out this post: Tesla Gigafactory Investor Thread - Page 155
It has the NREL data for geothermal, and Nevada is lit up like a christmas tree for geothermal.�
Sep 8, 2014
Monsoon There is geothermal everywhere... if you dig deep enough.�
Sep 8, 2014
iadbound With the way Tesla is trying to keep prying eyes away from site you would think the NSA is the one building the facility. I'm hoping that Tesla makes this into something of a model building project that is open for tours, garners the interest of industrial engineers and architects, and launches a whole host of imitators.�
Sep 8, 2014
chickensevil I think that is why the NREL map is 3km to 10km because I think 10km is the upper bound of what they feel would be feasible... this is like digging for oil wells... haha!�
Sep 8, 2014
ggies07 Elon did say at the local press conf. That it will be open for tours because you are going to want to see it. Sounds like it's going to be a BAMF of a building.�
Sep 8, 2014
chickensevil If you go listen to the video during the Nevada speech Elon seems to indicate exactly this!
It is why they are making the building appealing to the eyes, like an attraction for the future of manufacturing. Because you can bet that the tech on the outside isn't the only thing worth going to take a look at!�
Sep 8, 2014
ecarfan Yes he did say that and as soon as the factory is up and tours are available My wife and I are driving there to see it! With the Truckee SUpercharger up and running it will be an easy drive from the SF Bay Area and I'm sure there will be at least HPWC charging available at the Gigafactory, and maybe even Superchargers.�
Sep 8, 2014
iadbound I didn't listen to the announcement. Seems like I better go listen. Likewise, his comments from Tokyo also sounded like they were worth listening to.�
Sep 8, 2014
chickensevil Yes it was a really great Q&A I posted the full interview from Bloomberg over in the short term thread, it had some relevance to the gigafactory so anyone interested should check out the comments directly relating to that.
Specifically, one of the things he mentioned was that for the capacity of the factory it would be 2/3 for Tesla car production and 1/3 for stationary storage and other auto car production (like Toyota, Daimler, etc).
Also it looks like Hitachi and SMM will be very likely partners, it seems like they haven't fully committed yet but are likely to go with it since they are the current suppliers for the Panasonic cells.
Anyway the whole video is worth the 30 minutes or so that it takes.�
Sep 9, 2014
AlMc As I read this either Western Lithium Mining Company will be, or is lobbying to, supply the GF with Lithium with the start up of the new extraction factory:Western Lithium Advances Nevada Lithium Supply With Demonstration Plant Startup - Yahoo Finance�
Sep 9, 2014
RobStark All they have to do is match the quality and delivered price of Lithium from Chile.�
Sep 9, 2014
jhm So big they'll need to hyperloop employees from one end to the other.�
Sep 9, 2014
FluxCap Via reddit.com/r/teslamotors:
Exactly how HUGE will the Tesla Gigafactory be? [Fixed - OC]
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Sep 9, 2014
evme I think the document here is very interesting to review:
Economic report says Tesla to generate $1.9 billion in new taxes for state - Las Vegas Sun News
One thing I noticed through a quick skim is that the gigafactory will open in 2015 and have 700 workers there.
Also this:
The 5 billion spending in equipment after 2019, does that mean the gigafactory can actually produce more than they initially proposed by 2020?�
Sep 10, 2014
vgrinshpun Linked article no longer contains wording for the additional $5B equipment post 2019. It seem that apparent original inclusion of this statement in the article was a typo.�
Sep 10, 2014
evme
It is not in the article, it is in the attached document.
Here I extracted it from the HTML to the PDF:
http://s3.documentcloud.org/documents/1291115/full-tesla-summary-report-analysis-letters.pdf�
Sep 10, 2014
chickensevil Tesla Motors Inc Should Give Job Priority To Nevadans
I'm pretty sure this was already something Tesla was planning to do, so I don't see an issue with this, but something interesting that I would love to know where more details on this is:
Anyone who is able to find details on this please post away. I am going to search around and see what I can find.
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Well, crap, apparently the town hall meeting happened last night. Hrmmm, I wonder if anyone was able to get details on what happened for that... will keep digging.
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Nevada lawmakers to meet in special session over Tesla deal | www.ktvu.com
Local news report posted at 6AM this morning, some interesting points in here as well.
So as posted earlier there is a lot of special interest groups showing up here, it will be interesting to find out where everyone falls on the subject. It seems like the flood of emails to local representation has been overwhelmingly for the project, and they are certainly taking steps to ensure that Tesla has to put forth their share of the spending before tax breaks would kick in and they want jobs to go to Nevada first and foremost, neither of which I take issue with and I don't think the company will either. It seems like this is getting a pretty fair shake thus far, but we will see how it goes... still looking to find out if there is any way to tap into a feed on the actual debate happening as the session kicks off, like... right now.
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Well we have two bills sitting on their website thus far. From what I can tell the first bill would amend the Electric Rates to businesses which must enter a 10 year contract (up from 5) and will get a discounted electric rate for 8 years (up from 4). I the first 2 years they will get a discount rate of 30% and in years 3-6 a rate discount of 20%, and years 7-8 a discount of 10% (which should be fine for Tesla since they will be well into a net zero program by that time.
Bill text here:
http://leg.state.nv.us/Session/28th2014Special/Bills/AB/AB1.pdf
The second bill is the exemption for manufacturers of electric vehicles which amends to existing law:
Bill text here:
http://leg.state.nv.us/Session/28th2014Special/Bills/AB/AB2.pdf�
Sep 10, 2014
AlMc I have a tough time seeing a scenario where this does not pass. I have endured many 'town hall' meetings, as I am sure many of you have, and at every one there is more passion on the opposition side than the support side. The debate will not come down to 'do we want it or not'. It will come down to 'covering your but' by making sure there are safeguards in place to insure that tax breaks and infrastructure costs to the state be based on certain criteria TM meets.
Heck, even the auto dealers are in favor of it because it puts money in their pockets because of $ and people coming into their state�
Sep 10, 2014
chickensevil Also here is the proclamation for conveniening on the special session:
http://leg.state.nv.us/Session/28th2014Special/Docs/Proclamation.pdf
Here is the important text from the proclamation:
�
Sep 10, 2014
vgrinshpun Thanks for posting the PDF.
I am at loss to explain this additional $5B in equipment post 2019. My initial thought was that may be the plan is to have big enough building to fit the second phase of the GF(another 50Gw worth of batteriey production). In order to check this I tried to see if there is spare building space to add equipment for the second phase, but numbers just do not work. In the process of this exercise I just realized how stunningly efficient GF is as far as space and investment utilization. The GF is an outstanding value.
It turns out that GF is almost 3 times as efficient with space utilization as Panasonic Suminoe Plant, even though the Suminoe Plant produces cells only, while GF will produce battery components (anode, cathode, separator, electrolite, case, etc.), batteries and battery packs! Suminoe Plant is using 306,000 sq.ft. per 1GW of production capacity, while GF - only 110,000 sq.ft
The GF is also projected to be almost 2 times cheaper pre 1GW of the production capacity than the Suminoe Plant. And this is in spite of the fact that it includes power plant, on top of the battery component, battery and battery pack production as compared to Suminoe plant that has only battery production. Suminoe plant (both phases) back in 2009 was projected to cost $0.18B per 1GW of production capacity, while the GF - $0.1B.
Basis:
Suminoe Plant Production (Phase 1 + Phase 2) - 600x10[SUP]6[/SUP]cells, 7.179GW (600 * 85 / 7104 )
Suminoe Plant Floor Space - 205,000 sq. m = 2.2x10[SUP]6[/SUP]sq.ft.
GF Production - 50GW
GF Floor Space - 2.2x10[SUP]6[/SUP]sq.ft.
http://panasonic.co.jp/corp/news/official.data/data.dir/en100325-3/en100325-3.html
http://online.wsj.com/news/articles/SB10001424052970204138204576599801032591130�
Sep 10, 2014
eepic Wow great find on these articles! Just trying to understand where you got the 2x price efficiency from though? My math actually yields higher, using the plan to invest 100B yen ($1.31B USD) to have a factory with capacity for 300mm cells per year. Approximating each cell to be 1/7000th of 85 kWh (or 12.14 Wh per cell), that's 3.642 GWh capacity.
Suminoe = 1.31B/3.642GWh = $359.7mm/GWh
Gigafactory = 5B/50 GWh = $100mm/GWh
Meaning a 3.5x improvement on capex per production capacity (excluding the additional steps integrated into the Gigafactory!)�
Sep 10, 2014
vgrinshpun The WSJ article mentioned that $1.3B projected cost was for both Phase 1 (300mm cells) and Phase 2 (another 300mm).
I am wondering whether Street realizes how good of a deal this GF is... The mainstream media is obviously clueless, but might be not for long. I hope that once this deal is inked by the state, we will hear from the analysts...�
Sep 10, 2014
GenIIIBuyer I hadn't done the math yet on the stationary storage side of the Gigafactory equation. Correct me if I am wrong, but 15 GwH of capacity that they are allocating to stationary storage will bring in about $3B in sales per year.
Assuming each KwH of storage is sold for $200/kWH. That is amazing, build it already!�
Sep 10, 2014
chickensevil Since it is more appropriate for this thread, here is the link to the live feed, they are supposed to be starting any minute now....
LCB Calendar�
Sep 10, 2014
chickensevil So far everyone that has spoken has expressed complaint over the deal, I guess this is probably normal... noone for it is going to take the time to come and voice their "complaint" because they have nothing to complain about.
I have to step away from the feed for now, but when I get back I will look into it further.�
Sep 10, 2014
evme Yes, this is generally normal. 1 guy came up was for it but more in sense he wanted to pitch his services to Tesla and include small businesses. Overall though based on what we heard most of the complaints should be handled within the bills with the exception of the independent review which there is no time for.�
Sep 10, 2014
Krugerrand I'm interpreting much of it as a case of 'this is too big and scary for me, therefore I'm against it'.�
Sep 10, 2014
evme AB3 is ready:
http://leg.state.nv.us/Session/28th2014Special/Bills/AB/AB3.pdf
Summary: It just takes away the tax credits from insurance companies. Probably a later bill will grant them to Tesla.�
Sep 10, 2014
chickensevil I really do like that everything is being done through its own bill instead of throwing it all into one take it or leave it thing. If only our Federal Government would do things this way... -_-�
Sep 10, 2014
pz1975 Reno Won Teslas Gigafactory. Was It Worth It? - CityLab
Article on why the GF is bad for Nevada - very poorly written with things taken out of context from someone with an obvious agenda against incentives.�
Sep 10, 2014
anticitizen13.7 Expect the political attacks against Tesla to be relentless. Effect on stock price? Probably nothing, because the major market players really don't give a *($#! what a fringe element of Hayek followers think.�
Sep 10, 2014
Lump Assembly back in Committee of the Whole: Let the debates begin
09/10/14 - Assembly Floor Session - Sep 10th, 2014
Live coverage: Nevada lawmakers and the $1.3 billion Tesla deal
http://www.lasvegassun.com/news/2014/sep/10/live-coverage-nevada-lawmakers-and-13-billion-tesl/�
Sep 10, 2014
chickensevil They are currently presenting the EV Rate Rider bill and the changes associated with it. This one had pushback earlier (and doesn't just affect Tesla but people who are currently on the program and future companies), all it does is just extend the program to 10 years. It is also capped at 50MW across the state and 25MW per service area... so if I am understanding this correctly, this is already set aside power (meaning the "regular" users are already footing this bill) and since it is capped, "regular" users won't ever pay more than they already are... or am I missing something?
I only say this, because this, again, was specifically brought up by people complaining... seems to me like it would be a non-impact since the power has already been allocated and there is a hard cap (not per company but per region)
Edit: my bill is like 60$ per month my bill would go up a whole 1.2 cents.�
Sep 10, 2014
chickensevil They are really dwelling on this energy change thing... but the bottom line it is a .0001 cent change per kW hour per customer (including commercial). They thought about lifting the cap from 25 to higher and it would have had a real material impact on customers, the governor did NOT want to cause an impact to individuals which is why they left it capped at 25MW per service area and 50MW across the whole state.
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And now for the good part... should see if the ADA is going to fight back here or not... I don't think I will be able to stay up for this, but they are now moving to the hearings for AB2 which would allow Tesla (and any other EV maker) the ability to direct sell to their cars. Should be good
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And here it comes... Lobbyist is pushing amendment to basically make this a "Tesla Only" bill... I really hate these guys... They are trying to cap this at Jan 1, 2016
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*Applause* Assemblywoman Flores! If this is supposed to help all EV companies out and move us forward, why are we capping the date? *YES* That is the question to ask
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Well they are now on a 35 minute break, I think I am turning in for the night... Hope all goes well...�
Sep 10, 2014
chickensevil Well, I came back just to catch the end and get caught up.
A really great summary by the Nevada NPR on AB2 (EV Direct Sale Bill) and people's concerns had everything to do with the amendment.
The gist of AB3 is that the Home Office Insurance thing has only ever applied to 12 companies and it has been around for something like 43 years, and there has been no evidence that it is actually doing anything useful. At least that was what I was gathering. So they are looking to shift that funding into money for Tesla.
Anyway, they broke till 9:30 (local time) tomorrow. The important text which is coming from the Senate SB1, is about half written at this point and the Assembly Leader wanted everyone to have the night to sleep on these three bills and hopefully get a chance to look at SB1 before they come back tomorrow. So nothing voted on tonight, will be interesting to see where they go tomorrow. But overall I am glad with the progress I saw being made and it seems like they are taking their time with this to really give chance for all parties to be heard and then think about things and come to a decision. I am quite please with what I have seen and I only wish other states and governments operated as well as NV seems to be (If only they could fix their education issues, it seems like a pretty decent state)�
Sep 10, 2014
Cosmacelf Great summaries, please keep them coming if you can.�
Sep 10, 2014
evme
Even worse, that from what was mentioned the insurance tax credit, 80% went to 1 company. SB1 should be 40 pages long.
BTW I am following this ticker for latest updates:
Live coverage: Tesla special session at Nevada Legislature - Live Blog Live Blogging
Edit:
SB1 is ready! requires 50% of employees and construction workers to be Nevadans.
�
Sep 10, 2014
chickensevil Oh thanks I had missed that... But like people see the word insurance and immediately equate that to their rates are going to go through the roof now... Like the impact on cutting this bill's funding by 50% is such a minimal thing that I am sure the 22000 people that have something to gain from Tesla moving in is a larger economic impact... I think people are just scraping for excuses here to complain... It is quite sad really.
Earlier there was a woman who was baulking at them over the electricity law change saying that now that the weather is turning colder and kids are going back to school families can't afford to pay increased electric bill costs... Yes... That .0001 cents rate change is a whopper! I think they said the average home would see at most a 1$ impact to their YEARLY billing. I don't care how much money you are making... That is a rounding error. And yet the memes were flowing on twitter about everyone give Tesla $1 to pay their bill... Really?
First this law already existed they are just extending it to 10 years, second it is still capped a 25MWh of power use across all potential companies. It isn't just Tesla that benefits here and there are caps to prevent it from getting out of control.
I just get sad at all these posts by ignorant people...�
Sep 10, 2014
evme The insurance thing is a joke because the subsidy is for offices, not for the insurance. As for electric rates, they calculated it being 1.80 per year if tesla uses max which is unlikely.
Also if you didn't notice, senate feed is back
Here is bill history:
SB1
Here is text:
https://www.leg.state.nv.us/Session/28th2014Special/BDR/BDRSS28_32-0014.pdf
Edit:
Seems like biggest opposition so far has been movie tax credit. It is getting a lot of opposition from the Southern Nevada democrats.
Edit2:
I found here a breakdown of the bill:
It's not just Tesla that could be eligible: The Legislature can't author a bill for one company. So it has to set perimeters for how a company would be eligible for the 100 percent tax abatements offered to Tesla. In this case, a company would be required to invest $3.5 billion in materials and equipment over 10 years.
Half of the workers must be Nevadans, but there's an out: The bill requires half of the construction workers and half of the permanent factory workers be from Nevada. Tesla will be required to keep such things as driver's licenses and car registrations of its employees on file to prove the quota has been met. However, if Tesla can demonstrate it can't find enough qualified employees in Nevada, it can ask the economic development director for a waiver.
Transparency is key: The bill requires the economic development office to approve the abatements in a public meeting. At the announcement of the public meeting, Tesla's application will become public. Of course there's a caveat here, too. Tesla can ask the director to keep confidential any proprietary information. The director gets to make the final decision and the law seeks to bar "judicial review" of that decision.
Economic development director gets massive authority: The bill doesn't specify exactly what kind of proof Tesla must submit to demonstrate it is keeping up its end of the investment and hiring bargain in order to be eligible for the abatements. The director can decide whether the documentation provided by the company is acceptable.
You want reporting, we've got reporting: The bill requires Tesla to submit annual audits of its workforce and investment progress. The Economic Development Office is then required to file annual reports detailing the number of jobs created, the dollars invested, the wages paid and more.
Transferable tax credit program: Tesla will get a $12,500 transferable tax credit for up to 6,000 qualified employees, who work at least 30 hours a week and make an average of $22 an hour. The credit program expires in 2022. While Tesla must report when it sells a tax credit to another company and describe which revenue stream the credit will be used against (gaming, insurance premium or modified business tax) it doesn't have to make public the sales price.
Yes there are clawbacks: If Tesla doesn't live up to its end of the bargain by investing up to $3.5 billion in 10 years or hiring the number of workers it says it will in its application for the abatements, it will have to pay back its abatements with interest. Tesla must also continue to operate in the state for a time period decided by the economic development director or it must pay back its abatements.
What about that pesky Constitution? In 1956, Nevada voters approved a ballot initiative creating a 2 percent sales and use tax, which has become part of the state's roughly 7.75 percent sales tax rate. Because voters enacted the tax, the Legislature is prohibited from tampering with it. That means lawmakers can't issue a 100 percent sales tax abatement. But, the lawmakers can allow local governments to rebate that 2 percent back to qualified businesses. To do that, Senate Bill 1 allows cities or counties to create a new kind of tax incentive district, called an economic diversification district. The local government can then rebate to any qualified business in the district that 2 percent sales tax. The local government can also ask Tesla to agree to make payments to offset the cost of local government services provided to the company.
Parsing details: What's in Tesla's grand bargain bill?�
Sep 10, 2014
Curt Renz AB2 would allow pure electric car manfufacturers to sell and service directly to consumers without the requirement to do so through franchised dealerships. The dealership lobby has proposed an amendment that effectively allows this only for Tesla Motors. The bill's sponsor accepts the amendment. Tesla is not specifically mentioned, but the amendment would cut off the exemption for any manufacturer attempting to qualify after 2016 begins. No one else is likely to qualify by then, and Tesla would be grandfathered.�
Sep 11, 2014
chickensevil While I am disappointed that this amendment is there it doesn't keep everyone out entirely like other states... If I were a company like Mission R (selling electric motorbikes) I would jump on this as quick as I could to open a dealership. There are a couple other little companies out there as well if I am not mistaken... But yeah, a little over a year is not a lot of time... It is better than the cutoff date being some past date like Aug 1 or something like they have done in other states...�
Sep 11, 2014
eepic I think I'm missing a piece of the picture here, maybe someone can help me understand. Why do the tax incentives to insurance companies, film companies, etc have to be rolled back in order to accommodate Tesla?
Aren't all the major tax incentives for Tesla essentially tax breaks, meaning the state doesn't need to physically send any money to Tesla and Tesla simply has to pay less money to the state over time? The exceptions being commitments to build infrastructure and lost potential tax on the piece of land the gigafactory would have occupied if it didn't go through.�
Sep 11, 2014
Cosmacelf Yes, but they still want to offset tax breaks by taking away tax breaks given to other companies.�
Sep 11, 2014
evme Yes they are tax breaks, but these tax breaks are special because they can be transferred/sold to others. So what usually happens is say you have a transferable tax break for $100. You can sell it to another company for $90. Nevada has no way of granting cash and this is kind of their loophole. The downside is that there is resale value loss.
Now Nevada does not want to lose any tax revenue by issuing new credits. So they are moving the old ones around.�
Sep 11, 2014
chickensevil Yeah, I think this is strictly to offset the 12,500 tax credit for each of their 6500 employees which comes out to 81.25 million if I am doing the math right. So say they sell them for 50 million total, then that is 50 million in cash that Tesla now basically gets to use how they see fit.
It is just a small piece of the pie as the abatements I think are going to be the biggest piece of the incentive package.�
Sep 11, 2014
eepic Ahh that makes sense now, thanks all. I wasn't aware they could sell these tax credits�
Sep 11, 2014
chickensevil Yeah, this section from the article above explains it pretty well:
There was complaints from people that they wanted these credits to be locked in at 100% value so you could only sell them to someone for their full price... essentially meaning, they would never sell them... And Tesla can't really use them, since they are not really going to be paying any taxes during the time that these credits would be useable. So the whole point of these is that they expect Tesla to sell them off to other businesses.
But because now you are affecting the taxes of these other businesses, the state would lose that tax revenue, which is why they had to gut the tax credits from other programs currently being funded in order to balance it out.
Overall, everything I see, seems to indicate that they put a decent amount of thought into making it as little to no cost to the taxpayer upfront, and by the time the taxpayer would start to feel something, the new jobs and other such things will be well in effect that it should more than balance it out.�
Sep 11, 2014
AudubonB Blast it all!
I DESPISE sloppy writing.
On the internet, one understandably gets labeled pedantic if one tries to correct another's solipsisms. But I'm not talking about that - rather, I am referring to the wording of AB2. I was hoping that Chickensevil was paraphrasing when he wrote this some three pages back, but he wasn't.
Here is the relevant text from AB2:
...only manufactures passenger cars that are powered solely by one or more electric motors; (2) only sells at retail new or new and used passenger cars that it manufactures; and (3) does not enter into a franchise for the sale of its passenger cars. For the purposes of these provisions, the term �passenger car� is defined by existing law to mean a motor vehicle designed for carrying 10 persons or less, except a motorcycle or motor-driven cycle.
The problem is that pesky initial adverb. This wording means that the qualifying entity is one that can perform one AND ONLY ONE function: "build electric passenger cars". Not design them. Not build electric submarines. Not investigate Hyperloops.
The text even is internally self-inconsistent. An entity that "only manufactures..." CANNOT also "...only sell...".
Am I being histrionic? I am not. Lawyers make fortunes over these errors, and progress is thwarted for decades over same.
Is there respite? There is. Moving "only" three words to the right will have the text read "...manufactures passenger cars that only are powered..."�
Sep 11, 2014
chickensevil ewww, I think I see what you are getting at here, so technically with Tesla manufacturing batteries for stationary storage they would be in violation of these law... since they don't *just* make passenger cars... I get the intent here is to only allow companies whose sole focus is making electric cars to get this exception, but the wording can be twisted... Hrmmmmmm if only we had someone with contact in NV and weren't just sitting on the sidelines here. Anyone with a direct contact with Tesla that they can leverage to get them to address the meaning of this text? I would hate this to be turned against them...�
Sep 11, 2014
JRod0802 Using your wording, if I decided to start a landscaping company or a computer company or just about any company, couldn't I just manufacture and sell two electric cars and then qualify for the tax break? I would be a business that "manufactures passenger cars that only are powered by one or more electric motors". That just wouldn't be my primary focus. In fact, I would have only manufactured them for the purpose of getting the tax break.�
Sep 11, 2014
Curt Renz The law is in regard to the type of cars being sold at a dealership or company store. I don't see it as pertaining to any other company endeavors. In any event, by the time that Tesla starts making batteries designed exclusively for the stationary storage of energy, I suspect the franchised dealership issue will have been swept aside across the nation, either due to federal court rulings or popular opinion to which legislators will have bowed.
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The specific AB2 bill and the proposed amendment are in regard to the issue of franchised dealerships, not tax breaks.�
Sep 11, 2014
evme Senate feed is up
LCB Calendar
also a good life ticker here:
Live: Day 2 of Tesla special session at Nevada Capitol - Live Blog Live Blogging�
Sep 11, 2014
AudubonB - - - Updated - - -
Curt - that is how you see it. That is how a reasonable person sees it. And now I turn Mr Twain on his head:
Let us assume that I am an attorney. And let us assume I am a reasonable person. But I contradict myself.
�
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