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All four states want the factory in their respective borders

Tesla Motors has stirred up some competition among four Southwestern states that want the automaker to place its new Gigafactory within their respective borders. 
According to USA Today, Nevada, Arizona, New Mexico and Texas are all crossing their fingers that Tesla will bring its Gigafactory for lithium-ion batteries to their state. Tesla recently announced the four states as finalists for the factory's location.
Tesla's Gigafactory aims to create electric vehicle batteries on a mass scale, which will bring battery costs down and help the automaker deliver an affordable EV. Right now, the company offers its high-end, all-electric Model S sedan that has a starting price of $69,900 in the U.S.
Tesla said the giant factory would create 6,500 jobs, which is an attractive offer to these states. Tesla will invest around $2 billion in the plant through 2020 while investors will pay another $2-3 billion for a total $4-5 billion investment. 
All four states are good candidates because they have the climate and terrain necessary to power the plant, which will run on solar and wind. 
Nevada would be the closest option for Tesla, since its EV manufacturing plant is in Fremont, California. New Mexico would likely be favorable to Tesla as well, since the automaker previously planned to manufacture its EVs in the state before settling on the California factory. 

"Gov. Susana Martinez, state and local leaders greatly admire Tesla. We are believers in the company's vision and philosophy," says Jon Barela, secretary of the New Mexico Economic Development Department, in a statement. "This is an incredible company that is changing the world for the better. We are ecstatic that New Mexico is a finalist for this phenomenal project."
While Arizona has the sunshine Tesla needs in abundance, the state's fiscal conservatives might not be onboard with so many incentives funded by taxpayers. 
Texas is another good choice, because it already provides space for other auto plants and is close to auto manufacturing infrastructure in Mexico. But Tesla has had issues with Texas in the past that could ruin future business together. 
Last April, Tesla CEO Elon Musk showed support for House Bill 3351, which would allow distributors and manufacturers of electric vehicles (EVs) only to sell directly to customers without the use of dealerships in Texas. The state fought Tesla in an attempt to protect the position of auto dealers, which can lobby a lot harder than Tesla
However, Tesla could strike a deal with Texas where the automaker demands the anti-dealership sales model in exchange for bringing the Gigafactory to the Lone Star state. 
The giant Gigafactory will span 500 to 1,000 acres of land and have a space requirement of 10 million square feet. It aims to produce 35 GWh of cells and 50 GWh of battery packs a year. 
Tesla added that it's getting ready to produce 500,000 EVs a year in 2020, and the Gigafactory will supply those battery packs. What's more is that Tesla expects the per-kWh cost of a Tesla battery pack to be lowered by more than 30 percent once the factory is up and running for the first year. 
Construction will continue through 2015, and in 2016, equipment installation is set to begin. The year 2017 will finally see production launch, and will gun for the half million EVs produced in 2020. 

Source: USA Today

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Tesla battery
By Richard875yh5 on 3/3/2014 12:55:03 PM , Rating: 2
I find it strange that Tesla wants to spend all that money on a battery factory without even knowing how good the competition batteries will compare. For example, GM is secretly working on their batteries in Michigan and rumors are they will have much improved batteries. Now if Tesla's battery ends up inferior to GM's, that would make Tesla 5 billion dollars a bad investment. I think Tesla is full of smoke and is just running on hype.

RE: Tesla battery
By Reclaimer77 on 3/3/2014 1:05:38 PM , Rating: 2
He's doing it to increase the stock bubble that is Tesla.

The factory won't have nearly the demand hes estimating, but investors love it.

RE: Tesla battery
By Mint on 3/3/2014 3:17:31 PM , Rating: 2
Worst case scenario for Tesla is to sell packs to other automakers.

By 2020, there will be very few regular hybrids. Most will be plugin, because it's silly not putting $1-2k of batteries in there once you've already paid for a hybrid powertrain.

Hybrids sales were 500k in 2013 for just the US, and are on a solid growth trajectory.

RE: Tesla battery
By Drafter on 3/3/2014 9:50:42 PM , Rating: 2
Future price of fuel and electricity will ultimately decide this. My guess is that by 2020, Atkinson cycle engines will be at ~45% thermal efficiency and new battery tech with advanced hybrid power-trains will be able to get roughly 80mpg without the need to plug into a volatile grid where the cost of a kWh varies wildly from state-to-state, county-to-county, season-to-season, day-to-night, user-to-user.

RE: Tesla battery
By flyingpants1 on 3/4/2014 12:08:02 AM , Rating: 2
I love how people think MPG is some magical golden unicorn that you can't attain without billions in R&D. Google Aerocivic, 100mpg with a NORMAL Honda.

Dodge Intrepid ESX was ~80mpg like 20 years ago.

RE: Tesla battery
By Drafter on 3/4/2014 12:38:34 PM , Rating: 2
I love how people like you think high MPG is something more magical than a specialized power-to-weight ratio and aerodynamics that all auto-manufacturers could be using right now. But guess what, it's not. Modern cars are heavier for safety regulations and standardized consumer luxury options. That magical golden unicorn is in fact a magical golden unicorn because absolutely nobody is going to buy the two cars you referenced in your AMAZING argument.

RE: Tesla battery
By Mint on 3/5/2014 10:02:04 AM , Rating: 2
I think you misread his post.

He's saying that high MPG has been achieved before, not that it's magical. It seems you agree that Americans - especially the higher income folk buying new cars - overwhelmingly don't want tiny, underpowered cars.

The engine advances you talk about will not make much difference in MPG beyond ~10%, IMO. Plugins, OTOH, give you the quantum leap in gas usage reduction, and require little investment: Just add a bigger battery and a charger to existing hybrids.

From there, the electric motor and controller can be improved for more performance (and desirability) with almost zero effect on MPGe. That's why PHEV/EREV has so much potential in the real world.

RE: Tesla battery
By Spuke on 3/4/2014 10:10:48 AM , Rating: 2
Worst case scenario for Tesla is to sell packs to other automakers.
This won't be worse case, this is what they'll be doing. Sales of a $49k plus car will NOT reach half a million a year (if ever) by 2020 with a 2017 launch date. If they were currently breaking sales records for that type of car (or any car in that price range), I'd be a lot more optimistic.

RE: Tesla battery
By Mint on 3/5/2014 11:54:01 AM , Rating: 2
They are grabbing a big share large car sales in its price range:

And by 2020, they'll have more models. Why on earth would you assume that by then they'll still only have their 2017 model, and that it'll cost $49k?

Success is by no means guaranteed, but at least admit that there's a good chance for it. How often is the stock market that wrong? Even initial FB investors are getting the last laugh, proving my skepticism WAY wrong.

RE: Tesla battery
By flyingpants1 on 3/3/2014 4:55:54 PM , Rating: 2
You are truly incredible. He's stated many times the stock is overvalued, the stock price is a distraction for the employees and shouldn't be used as a metric for anything, and he'll be the last one to sell. But no, there has to be some fucking evil plot to raise the stock price, just because you personally don't like the guy. Amazing. What is your deal with openly lying on internet forums every day? Where is the satisfaction in it? I'll never understand.

RE: Tesla battery
By Spuke on 3/4/2014 10:12:58 AM , Rating: 2
What's truly incredible are statements like these:

Google Aerocivic, 100mpg with a NORMAL Honda.

Yeah, you're not crazy.

RE: Tesla battery
By AntiM on 3/3/2014 1:13:29 PM , Rating: 3
There's some risk involved. I don't think Elon Musk wants to wait and see what comes out of Detroit. He knows he's going to need lots of batteries. I'm sure he's already aware of whatever technology GM is working on. Will battery technology improve that much by 2017? Who knows? Probably not.

RE: Tesla battery
By Shig on 3/3/2014 1:31:40 PM , Rating: 2
The vast majority of all other automotive battery production consists of large cells. Tesla doesn't build battery packs that way.

RE: Tesla battery
By weaponzero on 3/3/2014 1:39:38 PM , Rating: 2
Your making the mistake in thinking that Tesla will release current batteries in the factory. Tesla plans to make next generation batteries there. Waiting to see what GM has in store will take years upon years. GM is almost nowhere. GM was relying on Envia systems for the batteries and Envia failed to deliver. Which means GM is back to square one.

RE: Tesla battery
By mjv.theory on 3/3/2014 6:56:14 PM , Rating: 2
I don't believe the purpose of the factory is as a technology developer of the actual battery cells. The efficiency of the cells will be fairly evolutionary. It's building the automotive battery packs on a large scale that is the trick.

RE: Tesla battery
By jimbojimbo on 3/5/2014 4:44:28 PM , Rating: 2
Hell, why doesn't every battery maker just abandon all plans of growing their battery manufacturing and wait for everybody else? Gee, then nobody would get anything done since they'll all be sitting there too busy looking at everyone else. Tesla, you're a brave company for spearheading this! Kudos to them if they succeed more than they already have.

AZ and TX are out...due to politics
By jnemesh on 3/3/2014 3:02:38 PM , Rating: 1
I sincerely doubt Tesla would put a factory in either state, considering the mindset of the politicians, including their penchant for being anti-gay and anti-minority. NV and NM probably have the best shot at the factory.

(was going to call the politicians "neanderthals", but that would have been insulting to the actual neanderthals...)

RE: AZ and TX are out...due to politics
By atechfan on 3/3/2014 4:10:50 PM , Rating: 2
What does attitude toward homosexuality have to do with the suitability of a location for manufacturing? Why do gays think everything is all about them?

RE: AZ and TX are out...due to politics
By fic2 on 3/3/2014 4:25:20 PM , Rating: 1
I doubt gay people think everything is about them but being anit-gay is about them getting less rights than the non-gay.

If Tesla put a manufacturing plant into an anti-gay state Tesla may alienate a portion of their customers - both gay and non-gay. The stereotypical anti-gay person drives a pickup so probably isn't Tesla's target market.

RE: AZ and TX are out...due to politics
By Reclaimer77 on 3/3/2014 4:56:25 PM , Rating: 2
lol only an extremist would call Arizona "anti-gay". That's just trolling.

If Tesla put a manufacturing plant into an anti-gay state Tesla may alienate a portion of their customers - both gay and non-gay.

I seriously doubt there would be any impact. The electric car is already about as gay as you can get :)

RE: AZ and TX are out...due to politics
By tanjali on 3/3/2014 5:15:10 PM , Rating: 4
Only a homophobe would say, an automobile is homosexual.

By atechfan on 3/4/2014 5:34:34 AM , Rating: 1
Only fags call people homophobes.

By Spuke on 3/4/2014 10:17:18 AM , Rating: 2
If anything cars are asexual.

Texas has a lot of nerve
By DT_Reader on 3/3/2014 12:52:12 PM , Rating: 2
They want the factory, but deny Tesla the right to sell cars in their state? The steer waste is pretty deep in Texas!

RE: Texas has a lot of nerve
By SoCalBoomer on 3/3/14, Rating: 0
RE: Texas has a lot of nerve
By Mint on 3/3/2014 2:40:37 PM , Rating: 2
Independent dealership is the key word. Tesla actually has showrooms in Texas that they want to run like an upscale, low-pressure dealership.

But because they're owned by Tesla, the law forbids them to sell, give test drives, or even discuss pricing.

RE: Texas has a lot of nerve
By tim851 on 3/3/2014 2:42:41 PM , Rating: 2
The sentence "deny Tesla the right to sell cars" is absolutely correct. They can only have their cars sold - passively.

RE: Texas has a lot of nerve
By chmilz on 3/3/2014 1:55:31 PM , Rating: 2
Well it's all but assured any construction in Texas would come with some kind of legislation allowing direct-sell. Otherwise, it's down to 3 candidates. It's all a negotiation tactic.

By fic2 on 3/3/14, Rating: 0
RE: happy
By DukeN on 3/3/2014 4:15:49 PM , Rating: 2
Oh well, some other states will be happy to get those jobs. And get that money back in all sorts of taxation/stimulus.

Or you know
By FITCamaro on 3/3/14, Rating: -1
RE: Or you know
By weaponzero on 3/3/2014 1:47:08 PM , Rating: 2
There is a reason who they are using solar and wind. Because it is cleaner and cheaper than coal and nuclear.

Reliability is not an issue really when considering what they are doing. Here is how I think they are going to play this. Batteries need to be cycled first to make sure they are working properly (QC) and then charged to 50%. What Tesla can do is charge the batteries during the day when the sun is out, and discharge the batteries towards end of the day. The discharged energy will then power the factory. This way they pretty much get free energy storage.

Making the economics of solar and wind very very good. They will be paying probably around 0.03 per kwh and have the highest reliability since all the energy generation will be in-house.

RE: Or you know
By Solandri on 3/3/2014 2:06:34 PM , Rating: 2
Making the economics of solar and wind very very good. They will be paying probably around 0.03 per kwh and have the highest reliability since all the energy generation will be in-house.

Pretty much every cost study I've seen of real-world implementations of power generation systems puts the price of wind at between $0.06-$0.12 per kWh, and solar at $0.25-$0.35 per kWh, compared to $0.045 for coal and $0.05-$0.08 for nuclear. That is, nuclear is slightly more expensive than coal, wind about 2x as expensive, and solar about 5x as expensive.

The mistake I frequently see renewable proponents making is they look at the cost during a short timeslice when conditions are favorable for the technology (sun is shining, or wind is blowing), then recite it as if it's the long-term cost. You can't do that. You have to divide the costs by the average production over a year to arrive at a realistic price. (Multiple years is better, but a single year at least accounts for seasonal variation.) The only power source which comes close to $0.03/kWh is hydro, and that's only when there's enough water behind the dam.

Storing the factory's power in batteries is even worse, as that introduces about a 30% efficiency loss (never mind the cost of the batteries). You are much better off sending the excess power to the grid during the day so that it can be used by someone else with only transmission losses (about 1%-3%). Then pulling power off the grid in the evening.

RE: Or you know
By tim851 on 3/3/2014 2:53:07 PM , Rating: 2
Storing the factory's power in batteries is even worse, as that introduces about a 30% efficiency loss (never mind the cost of the batteries).

It is a battery factory. Keep that in mind and re-read the part you answered to.

If Tesla really wanted to produce as cheap as they could, they wouldn't look at a U.S. state, would they. They'd go to South East Asia or South America or Eastern Europe.

So you can be glad they're willing to pay an honest wage to American citizens and others be glad they're willing to invest in a renewable power infrastructure.

No matter how long coal and oil and uranium will last us, at some point they'll be gone. It will surely be nice to ease the transition and work out the kinks while we still have fall backs.
You built levies when it's nice outside, not when the storm is here.

RE: Or you know
By FITCamaro on 3/3/2014 2:56:23 PM , Rating: 1
By the time nuclear fuel runs out we'll have either destroyed ourselves, perfected fusion, or the 2nd coming of Christ will have happened.

Thorium is a free fuel. It comes for free when you dig the rare earth metals out of the ground in order to make said batteries. The only reason we're not doing it is because of fear. Fear that is entirely irrational.

RE: Or you know
By Mint on 3/3/2014 3:25:38 PM , Rating: 2

There's gobs of thorium, and even uranium effectively renewable. Prices can go up 10x without making a big impact on generation costs, and at that point we can pull it out of the sea.

Sea uranium arose by dissolving out of the sea floor and underwater magma, so it's effectively limitless.

RE: Or you know
By gamerk2 on 3/3/2014 3:27:55 PM , Rating: 2
Call me when we have a place to store the fuel, we got Nuclear sites that are properly inspected [because they are NOT], and the "human factor" is removed from the equation.

RE: Or you know
By Etsp on 3/3/2014 3:57:02 PM , Rating: 3
Call me when the enviro-nuts let us start using breeder reactors so we can use up more than 90% of the waste material.

RE: Or you know
By mjv.theory on 3/3/2014 6:44:16 PM , Rating: 2
No matter how long coal and oil and uranium will last us, at some point they'll be gone.

Wrong!. The myth of limited supplies of uranium comes either from ignorance or deliberate misinformation. If we are to believe that the Sun will last only another 1-5 billion years, then it is quite reasonable to expect supplies of uranium and thorium to probably outlast the Sun. By this measure it would be accurate to say that nuclear is more sustainable that wind and solar.

RE: Or you know
By FITCamaro on 3/3/2014 2:54:34 PM , Rating: 2
Stop using logic.

RE: Or you know
By FITCamaro on 3/3/2014 2:57:29 PM , Rating: 2
The only reason there is any pollution our nuclear power is because our government makes there be. It is completely pollution free if it is done right. Far less polluting than the batteries they'll be manufacturing at the factory.

RE: Or you know
By Mint on 3/3/2014 3:02:54 PM , Rating: 2
Batteries are way more efficient than 70% round trip as you assert. It's over 90% for modern lithium ion. That's a non-issue.

The problem is that they're too expensive compared to dynamic grid generation. Gasoline costs about $0.35/kWh ($4/gal, 40mpg, 3.5 miles/kWh), and with electricity so cheap, an amortized battery can compete with that.

Grid power - especially when the sun is down - is far cheaper, and batteries need an order of magnitude cost reduction to compete. Only in isolated areas with very expensive power does solar+battery have a chance (but that could be a decent market).

BTW, solar's expense is mostly in the installation nowadays. Panels cost less than $1/watt, so 20 years at 20% CF works out to $0.05/kWh if interest is low.

RE: Or you know
By SigmundEXactos on 3/3/2014 4:21:04 PM , Rating: 3
The solar number you quote ($0.25-$0.35/kWh) seems off. I installed solar panels about a year ago (7kW system, $22,000 before any tax credits). It's almost been a year, and I've generated about 10000 kWh (another week it'll be a year and I'm at 9852, although it just started snowing, so we'll see if I make it to 10 MWh).

The panels are guaranteed to make 90% initial power @ 10 years, and 80% at 25 years, and historically they've beaten that by quite a bit (especially if I decide to clean them every 5-10 years or so). So let's assume 9000kWh over 25 years. That's $22,000 / 225000 kWh = $0.098/kWh.

Note: I bought my system without any regards to being "green", but based purely on return on investment. My electricity costs about $0.125/kWh, which means I'm making about $1250/year. My system cost me $22,000 - 30% federal tax credit = $15,400. Which means I have a 8.1% return on investment. I'm not counting any increase in home value, and assuming that any decrease in power generation is equal to future rises in electricity costs. I'm in Virginia which has no support for solar. The renewable energy credits here are worth maybe $20/year. Bleh.

While larger installations cost more, presumably they have larger economies of scale as well. I can't imagine that real estate in the desert costs that much.

RE: Or you know
By docinct on 3/4/2014 9:39:19 AM , Rating: 2
Don't forget the possible tie-in to First Solar. You don't market the factory seconds, you market factory "firsts" to customers of First Solar to store excess daylight electricity for use at night.
Signmund, what storage capacity would you need for overnight?

RE: Or you know
By Spuke on 3/4/2014 10:21:35 AM , Rating: 2
The solar number you quote ($0.25-$0.35/kWh) seems off.
He's talking about using solar in commercial power generation not home use. Different stuff.

RE: Or you know
By weaponzero on 3/3/2014 4:29:33 PM , Rating: 2
Actually, my numbers are based on data for the entire year. NREL has a calculator that calculates solar generation based on location and all conditions based on years of data.

The biggest issue with wikipedia links like you gave is the data is outdated as the data is based on 2010/2011 data. The cost of solar has dropped astronomically since then.

On top of that, one of the biggest differences here is that solar is that solar is being provided locally.

And storing solar in batteries is not an issue for the battery factory. Tesla has to charge and discharge those batteries anyways. So your not losing anything. Tesla would cycle the batteries for QC testing during the day and discharge them during the night.

So the cost of the batteries will be 0$ and the inefficiency of charging and discharging is irrelevant.

RE: Or you know
By Mint on 3/4/2014 5:20:12 AM , Rating: 2
Tesla would cycle the batteries for QC testing during the day and discharge them during the night.

That's an interesting thought. I considered Tesla using rejected cells for grid storage, but your idea is even better. 50 GWh/yr production * 7 test cycles each would be about 1 GWh of cycled electricity per day. That'll probably be enough for ~50MW of fairly steady factory power.

Of course, if the grid offers more for solar generation during the day than it charges for natural gas electricity in the evening/night, then such a scheme won't be needed anyway.

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