Latest News: Technology |  Celebrity |  Movies |  Apple |  Cars |  Business |  Sports |  TV Shows |  Geek

Trending

Filed under: News | Cars & Vehicles

 

Tesla $5B Gigafactory Bombshell: 500,000 Cars By 2020

Feb 26 2014, 5:06pm CST | by

1 Updates
Tesla $5B Gigafactory Bombshell: 500,000 Cars By 2020
 
 

YouTube Videos Comments

Recommend Your Tweet as Top Tweet:

Full Story

Tesla $5B Gigafactory Bombshell: 500,000 Cars By 2020

As anticipated earlier , Tesla took the wraps off its proposed battery Gigafactory today while also announcing plans to raise up to $1.6 billion in convertible-debt financing. The reason the company needs so much money is that it anticipates investing upwards of $2 billion  toward the $4-5 billion it says the plant will require by 2020. By that time, the company says it should be churning out enough batteries for 500,000 Tesla vehicles annually. All those batteries together are more than the entire worldwide production of lithium-ion cells in 2013.

The remaining billions are coming from partners in the facility. Tesla didn’t announce anyone today, but with reports that Panasonic is putting up $1 billion  initially it’s not entirely clear that anyone else is needed. Some investment will be upfront and some will be ongoing as capacity expands over time. The plant is expected to employ 6,500 workers and Tesla is considering sites in Arizona, Nevada, New Mexico and Texas for the 10-million square-foot facility. What’s strange is that Texas is one of a handful of states where Tesla is currently prevented from selling its cars directly to customers through its own dealerships — currently the only way it does business. (You can purchase a Tesla in Texas, you just have to do it on your own, via the website.)

When a law proposing to ban that model came up in Ohio, the company made it clear that future manufacturing would not come to any state that was getting in the way of how Tesla wanted to operate. James Chen, the company’s vice president for regulatory affairs, told the  Columbus Dispatch  that a possible truck manufacturing plant — something Tesla is looking at down the road — would certainly not come to Ohio if the bill to ban Tesla sales passed. That same Dispatch article quoted CEO Elon Musk saying something very similar about Texas to Automotive News in April:  ”[Texas] would be a leading candidate for the truck plant” if lawmakers eased franchise restrictions.

Attempts to reach Tesla were unsuccessful, but it does seem unlikely that Texas will get the plant unless (1) the dealer law is changed or (2) some other overwhelmingly compelling incentive is provided. And given the scope of the project, that’s certainly possible. Tesla hopes to power the plant mostly with nearby solar and wind power and expects to need up to 1,000 acres for the facilities. Some interesting tidbits that are buried in the announcement:

  • Though the plant will be making 35 gigawatt-hours worth of cells by 2020, it will be making 50 gigawatt-hours worth of battery packs. Panasonic currently makes a total of only about 6-7 gigawatt-hours worth of batteries elsewhere. While previous deals between the two companies have called for that to increase significantly, it’s clear that Tesla is expecting the Gigafactory to receive finished cells from other sources for conversion into packs. This means pack production will be centralized into one location, regardless of the source of the battery cells.
  • Sun is becoming an asset for manufacturing if one is committed to renewable energy. The states under consideration have among the best solar resources in the country. Texas also has an especially good wind resource. The absence of California on the list might speak to the company’s goal of diversifying its manufacturing base outside of one state, or it might have been the reasonable fear the environmental reviews could have delayed the project unacceptably long.
  • Battery pack costs are expected to fall significantly thanks to the plant. “By the end of the first year of volume production of our mass market vehicle, we expect the Gigafactory will have driven down the per kWh cost of our battery pack by more than 30 percent,” it said in a post . The larger battery in the Model S costs the company something on the order of $17,000, based on an estimate Musk provided more than a year ago. It seems probable the Gigafactory will allow Tesla to build the smaller 60-kilowatt battery for below $10,000 and the larger one for perhaps not much above that figure.

Follow me on Twitter  and on Facebook . Find the rest of my Forbes posts here .

Source: Forbes

 

You Might Also Like

Updates


Sponsored Update


Advertisement


More From the Web

Shopping Deals

 
 
 

<a href="/latest_stories/all/all/31" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

 

Comments

blog comments powered by Disqus

Latest stories

Cleveland Cavaliers Trade Jarrett Jack, Eye Kevin Love
Cleveland Cavaliers Trade Jarrett Jack, Eye Kevin Love
The Cleveland Cavaliers traded Jarrett Jack, Sergey Kasarev and Tyler Zeller in deals with the Brooklyn Nets and Boston Celtics on July 9. The Cavaliers are also reportedly eyeing All-Star forward Kevin Love.
 
 
LeBron James to Meet With Pat Riley in Las Vegas
LeBron James to Meet With Pat Riley in Las Vegas
Free-agent forward LeBron James met with Miami Heat president Pat Riley in Las Vegas on July 9 to discuss his future with the team.
 
 
Alien Isolation Pre-order Gets 25% Discount + &quot;Nostromo Edition&quot; DLC
Alien Isolation Pre-order Gets 25% Discount + "Nostromo Edition"
Ellen Ripley becomes playable in the new Alien Isolation if you pre-order the game. Perfect timing with a 25% off coupon code for the PC version.
 
 
Adidas&#039; miCoach Fit Smart uses your wrist to measure health data
Adidas' miCoach Fit Smart uses your wrist to measure health data
The wristband is capable of measuring your burned calories, heart rate, distance covered, pace and more fitness stats.