Tesla Q2 Earnings: Breaks Ground on Nevada Gigafactory

Tesla Nevada Gigafactory

Musk confirms the construction pad for the Tesla Nevada Gigafactory and something similar in one to two other states. The company clarified that a final site hasn’t been chosen for the facility and it is continuing to hedge its bets with multiple locations in several states.

How much will the Tesla Nevada Gigafactory cost?

Out of the approximately $5 billion in total cost for the Gigafactory, Tesla will spend anywhere from 40 to 50%, with Panasonic picking up the rest of the 30 to 40%. States could offer up to 10%, but partners are more likely to come up with the last 10-20%. The Gigafactory will improve Tesla’s lithium chemistry and the geometry of the cell. Straubel says the company’s next generation of cathode and anode cells are 10-15% more energy dense but also 10% larger in diameter. Raising the diameter will improve the energy density per unit mass.

What the Tesla Nevada Gigafactory will do

The Tesla Nevada Gigafactory will improve on manufacturing costs by at least 30% according to Elon Musk. JB Straubel, Tesla CTO, believes there is no need for fundamental breakthroughs in chemistry or materials science, but remains interested in the eventual long-term potential for breakthroughs.

According to a statement by Tesla Motors:

In June, we broke ground just outside Reno, Nevada on a site that could potentially be the location for the Gigafactory. Consistent with our strategy to identify and break ground on multiple sites, we continue to evaluate other locations in Arizona, California, New Mexico and Texas.


The final site for the first Gigafactory will be determined in the next few months, once we have full visibility and agreement on the relevant incentives and processes for enabling the Gigafactory to be fully operational to meet the timing for Model 3.

As for the Tesla Nevada Gigafactory, the final location won’t be chosen for months. Musk reiterated that any Gigafactory project delays would be potentially destructive and would affect the launch of the Model III.

OLYMPUS DIGITAL CAMERACan Tesla Motors really produce 100,000 cars by the end of 2015, an even split between the Model S and the Model X? The company says it is committed to a manufacturing 2,000 vehicles per week by the end of next year to meet it’s annual production goals.

It’s a safe assumption that Reno, Nevada will be the home for the Gigafactory  considering its proximity to California and Tesla’s manufacturing plant.

Electric or Hydrogen, that question is moot

Musk and JB Straubel admitted the only things the hydrogen PR puff offers so far is a modest range increase and a better refuel time. However, that technology costs much more than today’s electric vehicles (EV). JB Straubel says comparing a hydrogen fuel cell car that you can’t buy to today’s EVs is pointless since better EVs are being engineered regularly.

Tesla Model S Quality

Finally, Musk talked about how some Model S suffered quality issues, something everyone should expect from a company’s first car. Tesla has been very quick to repair anything, even slightly wrong. Musk likened the company’s repair and maintenance to the efficiency of a Formula One team on the race track.

SEE: Tesla Motors shareholder letter

Via MarketWatch.

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