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The giant Gigafactory will span 500-1000 acres of land

Tesla Motors' all-electric auto business heavily relies on batteries, so it makes sense that the company has placed a lot of emphasis on that area with Supercharger stations, replaceable battery tech and road trips to relieve range anxiety for customers. Now, Tesla is finally revealing some details on its huge, upcoming battery plant.

According to Tesla, its new factory -- dubbed "Tesla Gigafactory" -- will be located in either Nevada, Arizona, New Mexico or Texas. Tesla is likely choosing among these Southwestern states because the factory will be largely powered by solar and wind power, and the Southwest has plenty of sunshine to feed the plant.

The giant Gigafactory will span 500-1000 acres of land and have a space requirement of 10 million square feet. It'll employ around 6,500 people and 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. 

This is huge for Tesla, since the cost of batteries is a large fear of potential EV customers. Tesla has been working hard to ease such fears, since this will lead to more sales in the future.


The automaker recently addressed range anxiety associated with road trips by placing Supercharger stations from Los Angeles to New York, allowing for a coast-to-coast trip free of worry. 

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. 

This year will be a busy one in the Gigafactory's timeline, as Tesla plans to select a location, start intial project design, engage in partner discussions, begin zoning and design, and finally start construction. 

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. 

Tesla has proven time and time again that being the small guy in the auto race doesn't mean coming in last. In May 2013, Tesla repaid its $465 million loan from the U.S. Department of Energy (DOE) nine years earlier than expected from the original 2022 due date. 
 
Tesla is currently rocking the auto world by fighting auto dealers around the U.S. in order to sell its Model S on its own without any middlemen. Tesla CEO Elon Musk said he'd make the fight a federal case if he had to.

For Q4 2013, Tesla reported a profit of $46 million and saw its loss decrease to $16.2 million, which is much slimmer than the $90 million loss a year earlier. 

Tesla shares rose $34.65 to close at $252.30 Tuesday, and kept rising in premarket trading early Wednesday hitting $258.60. 

Source: Tesla Motors



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RE: There arent that many rich men
By Spuke on 2/27/2014 2:52:11 PM , Rating: 2
quote:
Their 2017 car is, IMO, going to aim for the BMW 3 series in price and performance. BMW sells 400k a year of that line.
3 series starts at $32,750 for a stripped 320i. But BMW customers don't buy stripped cars (cause they can afford not to). The average price of a 3 series is $45,000 so I figure the base Model E will start right around there (it'll likely be more than in 2017 but lets keep it simple). Like I asked about the Model X (apparently I didn't get the memo), the Model E is supposed to be the affordable one yet it's $25k over the touted DT perfect price point for cars. You guys (and most of America) aren't going to be able to buy that one either. So how is Tesla going to build enough cars to make that new factory pay off when they really need more average people to buy these?


RE: There arent that many rich men
By Mint on 2/27/2014 4:27:14 PM , Rating: 2
Musk keeps saying $35k, but I think he's overly optimistic and it's $40k. So let's go with that.

Why do you think they need to target lower than that? At this point they're aiming to sell 500k/yr, not 5M/yr.

In 2013, there were 15M cars sold in the US, about the same in EU+UK, 20M in China, and 5M in Japan, etc. Even if you just look at the priciest 1/4 of the global market, they only need 3% of that to hit 500k/yr.

That figure is their 2020 target, too. There's going to be more models introduced to hit it after the 2017 car.


RE: There arent that many rich men
By Spuke on 2/27/2014 5:29:41 PM , Rating: 2
If he's says 3 series is the target, he knows how much people pay for them. I doubt seriously that he'll undercut that price. Remember, 25% margins. You're not going to get that margin by pricing low. Honestly, I expect the Model E to be advertised at just under $50k with the subsidy (like he does with the Model S). Did you notice that the low end battery pack is no longer offered? Remember the S was launched at $57,500 with the subsidy, now it's $63,570 WITH the subsidy. He's already made room pricewise in the line up for the E.


RE: There arent that many rich men
By flyingpants1 on 2/27/2014 6:53:24 PM , Rating: 2
quote:
Remember, 25% margins.


No. The third-gen car will target 15% margins. As everyone likes to point out, most cars will be sold with pricey options, which drive up margins. So, figure around 31-32k for the cost of the car.

A whole Jetta is $17k, folks. Put it on a $15k Tesla skateboard, bam, done.

quote:
You're not going to get that margin by pricing low.


They'll reach high margins by having no dealerships, no unions and the cheapest car battery packs on earth.


RE: There arent that many rich men
By Mint on 2/27/2014 8:56:49 PM , Rating: 2
It's not going to be $31k. That's too low for the upscale image that Tesla wants, and Tesla will have plenty of demand at $40k plus options as they ramp up production.

They aren't VW, either. It'll take time for them to catch up to the big automakers in cutting production costs. They can't have any quality oversights arising from shortcuts, or they'll trash the reputation they've built with the Model S.


By flyingpants1 on 3/1/2014 1:28:19 AM , Rating: 2
I think $32k is plenty to build a third-generation car. That already gives a gross margin of 9.4% at the stated price.

The skateboard cost is everything. By comparison, it's pretty trivial to build a metal box with leather seats.


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