Tesla Motors Inc broke ground on the Gigafactory in the Nevada desert two years ago. The factory will produce enough batteries to meet the company’s goal of building 500,000 cars annually by 2020. It is expected to start cell production in 2017. Commenting on the increasing size of Tesla’s Li-on cells, Global Equities Research’s Trip Chowdhry said that the Gigafactory is valued at $50 billion, Benzinga reported.
Chowdry added that “the Nevada subsidies make sense if Tesla generates revenues of $100 Billion in 20 years, which he suggests to use as a data point to value the Nevada factory.”
Tesla Gigafactory to Redesign EV Battery Production
Tesla Motors Inc will build batteries in cooperation with Panasonic and other partners at the Gigafactory. The company said that the factory “will produce batteries for significantly less cost using economies of scale, innovative manufacturing, reduction of waste, and the simple optimization of locating most manufacturing process under one roof.”
At Tesla’s 2016 annual shareholder meeting held May 31 at the Computer History Museum in Mountain View, California, Elon Musk said the “Gigafactory battery cell production will be the best in the world, by far” because current battery production technology is optimized for creating batteries for consumer electronics. The Gigafactory will help in refining the technology for building lithium-ion batteries for EVs.
Musk also reaffirmed the need for a Gigafactory in order to scale and provide batteries for its growth projections. Musk said, he has discovered that the Gigafactory could produce “3 times more batteries in the same initial planned form factor of the Gigafactory.”
Volkswagen’s $11B Battery Factory
According to news reports, Volkswagen is planning to spend as much as $11B (more than twice the cost of Tesla’s Gigafactory) on building a battery factory is Salzgitter Germany.
Handelsblatt reports that the battery factory will be located in the same location where Volkswagen builds its internal combustion engines; hence, it is not audacious to assume that Volkswagen is planning to make a shift to building EVs over ICEs in the future. Thomas Lieber, Volkswagen head of vehicle development for EVs provides the motivation behind the firm’s ambitious plans. He says, “It’s simple — the CO2 legislation in the various regions will mean every OEM is compelled to offer e-mobility.”
According to Volkswagen, it needs the huge factory because it plans to be selling 1 million electric cars by 2025. As we reported earlier, we don’t know the kind of chemistry or technology that Volkswagen wants to deploy in building its batteries; however, the plan to sell 1M EVs annually by 2025 makes it important for the firm to own its battery factory instead of relying on traditional battery firms.
Tesla Supercharger Network
Folks at Consumer Reports think that Tesla’s supercharger network might not expand fast enough to keep up with the growth and the firm could risk losing some of its customers if charging becomes too much of a hassle.
Consumer Reports notes that “Tesla Motors Inc plans to double the size of the Supercharger network by the time the more affordable, higher-volume Model 3 arrives in showrooms at the end of 2017″. However, there are doubts that the Supercharger network will keep up with the firm’s growth trajectory because “Tesla’s Supercharger network already has shown signs of strain. A handful of Supercharger stations in key locations are already experiencing waiting lines… Wait times can become excessive during peak periods such as Friday afternoons and busy travel holidays”.