Tesla Gigafactory May Start Bidding War

[Hum]

Tesla Motors Inc. (TSLA)?s plan to build what co-founder Elon Musk bills as the world?s largest battery factory could not only shake up the power industry but trigger a bidding contest between states eager for the 6,500 jobs the $5 billion investment could create.

The luxury electric-car maker announced yesterday that it?s selling at least $1.6 billion of convertible notes to finance the project and exploring locations in Texas, Nevada, Arizona and New Mexico for a 10 million-square-foot facility. Tesla declined to comment on whether any negotiations had begun.

?This would rank as the most attractive industrial project out there,? said Dennis Cuneo, president of DC Strategic Advisors LLC and a former Toyota Motor Corp. executive who helped that carmaker select manufacturing sites.

Tesla has dubbed the project the ?gigafactory,? and it would make Musk a force in both U.S. manufacturing and electric power. The plant he envisions would have more capacity than any other to make lithium-ion batteries.

?This has a huge impact beyond Tesla,? said Harley Shaiken, a labor economist at the University of California, Berkeley. ?It gives enormous legitimacy to battery production and the future of the electric car because that lies in the battery. It?s high stakes, high technology.?

Tesla plans an investment of $4 billion to $5 billion by 2020 and will fund about $2 billion of the total, the Palo Alto, California-based company said in a statement. It said the convertible bond offering could grow to $1.84 billion.

more

[DocM]

Looks like he wants his raw materials to be sourced in N. Ametica....

http://m.detnews.com/autos/article?a=2014304020025&f=1213

Tesla Motors Inc., the electric vehicle maker co-founded by Elon Musk, plans to use only raw materials sourced in North America for its proposed $5 billion U.S. battery factory.

The Silicon Valley company won't look overseas for the graphite, cobalt and other materials needed for its so-called Gigafactory, said Liz Jarvis-Shean, a spokeswoman.

"It will enable us to establish a supply chain that is local and focused on minimizing environmental impact while significantly reducing battery cost," she said in an email.

The move comes amid heightened interest in curbing graphite pollution and a widespread corporate sensitivity about avoiding the use of industrial minerals from global trouble spots such as central Africa. China's government, for example, has begun to shutter mines producing graphite, a major ingredient in lithium-ion batteries, over air-quality issues, Bloomberg News reported March 14.

Tesla "is a high-profile company that is entering an age of supply-chain transparency," said Simon Moores, an analyst at Industrial Minerals Data in London.

Tesla, which manufactures the $71,070 Model S, says the "vast majority" of the graphite it uses right now comes from Japan and Europe and is synthetic, not mined. The Palo Alto, Calif.-based company prefers the synthetic variety, Jarvis-Shean said.

Natural graphite mined in China accounts for most of the material used in batteries worldwide, according to Industrial Minerals Data. China, the biggest graphite producer, is closing dozens of mines and processing plants even as global demand soars.

The Tesla purchasing strategy is unique in the battery industry, according to Sam Jaffe, an analyst at Navigant Research.

To make it work, analysts who follow the industry say Tesla may need to turn to graphite mines in Canada that have yet to be built. For cobalt, they say Tesla may have to go beyond Canadian output and look at prospective supplies in Minnesota and Idaho.

"It's very patriotic of them to do that, but it costs, and already the costs of these electric vehicles are quite high," said Edward R. Anderson, chief executive officer of Tucson, Ariz.-based TRU Group Inc., a consultant.

Tesla's plan will cut the per-kilowatt hour cost of its batteries more than 30 percent and reduce "logistics waste," Jarvis-Shean said.

The company is targeting the costs and pollution associated with transportation in the metals industry, Navigant's Jaffe said. Graphite, cobalt and other commodities often travel thousands of miles from mines to processors and then on to manufacturers and consumers.

The Gigafactory is important for commodity markets because of its sheer scale. While Tesla has yet to select a site in the western U.S. for the plant, plans that were first revealed in February envisage the production of enough rechargeable lithium-ion batteries each year by 2020 to power 500,000 Tesla vehicles. The factory would singlehandedly double world output of lithium- ion units.

Sourcing the materials on that scale in North America may disrupt commodity markets, said Stuart Burns, co-founder of Chicago-based pricing and analysis company Metal Miner.

"It really depends on how quickly Tesla ramps up their production and to what extent they are working with the supply chain already to ensure the capacity is in place," he said.

[DocM]

4k video of the Tesla battery Gigafactory under construction 15 minutes East of Reno, NV.

http://youtu.be/YSyE2RorjRI

[Draggendrop Veteran]

And he's just warming up....Leading by example...and hopefully he can "shame" other large conglomerates into "Build/Buy North America."

[DocM]

RE: the video

@elonmusk

This is not the full Gigafactory, it is just the pilot plant (1/4 size) https://t.co/gz2EmJkYtm

[chrisj1968]

4k video of the Tesla battery Gigafactory under construction 15 minutes East of Reno, NV.

http://youtu.be/YSyE2RorjRI

 

I live next door in Reno. So this Tesla thing is making a huge impact on our economy already. There's a new venue of hotels going up that aren't casino related. seems to be a new trend. I don't forsee the  casinos going away either. they ar etrying to balance the hotel situation for a business class. supposedly tesla is designing an in house battery for home use. was in the reno gazette journal last week.

[DocM]

The Tesla battery comes in two sizes; one for homes and a much larger unit for power companies to use for buffering. Both can be used singly or in arrays to increase capacity.

Tesla is also working on both more advanced lithium batteries and a metal-air battery,

http://fortune.com/2014/08/15/the-next-big-battery-disruption-isnt-coming-next-year/

[DeadEndAccount]

And he's just warming up....Leading by example...and hopefully he can "shame" other large conglomerates into "Build/Buy North America."

 

Or even just take advantage of what the US already has - rare earth minerals are in abundant supply in the US but the cost of environment compliancy make it unsustainable - maybe government intervention is required such as low interest loans.

 

When it comes to battery technology there was a 'competition' that was proposed by McCain when he ran for president but unfortunately his good ideas were overshadowed by the 'special person' he was coupled with. What is really need is something like a super battery where a small hatchback can get 1,000km off a single charge - that along with deal with the issues that many people have.

[PaulATMOS]

I'm looking forward to those batteries that can store solar power energy.

[FloatingFatMan]

I'm looking forward to those batteries that can store solar power energy.

 

Where the energy comes from is irrelevant as far as storage is concerned...

 

What's needed though is large capacity home batteries that people can charge during the cheaper rate hours from the mains (or solar etc), and then draw from during the more expensive rated hours and thus reduce their bills significantly.

[PGHammer]

And he's just warming up....Leading by example...and hopefully he can "shame" other large conglomerates into "Build/Buy North America."

It's not a question of "shaming" - it is indeed doing what the government wants.  (How much as the government - and especially Democrats - been wanting more domestic manufacturing, including mining - despite that it would severely hork off environmentalists?  The anti-coal movement has gotten a lot of those same Democrats in hot water - why do you think that Jay Rockefeller's seat went GOP last year?)

 

Given a choice between the environment and the economy, the economy wins - and should.

[FloatingFatMan]

^ Environmentalists are easy to deal with in the US. After all, you lot are generally armed, right?

[PGHammer]

^ Environmentalists are easy to deal with in the US. After all, you lot are generally armed, right?

Not all THAT easy - the enviros here are armed as well (look up the tactics of the Earth Liberation Front/EarthFirst - which is based in the far western US, but has offshoots all over).

[FloatingFatMan]

Not all THAT easy - the enviros here are armed as well (look up the tactics of the Earth Liberation Front/EarthFirst - which is based in the far western US, but has offshoots all over).

 

Now see, over here, most of our environmentalists are tree hugging hippies. All you need to deal with them is a bulldozer.