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Tesla consumes a small fraction of global lithium-ion battery production. When the overall market is much larger than the marginal consumption, the assumption

Tesla consumes a small fraction of global lithium-ion battery production. When the overall market is much larger than the marginal consumption, the assumption that offering more money increases local supply holds perfectly well. Even if you assume that Tesla is demanding 5% of the battery market which would be an outside estimate that's still well within the region where paying more will get you more.

mikeash 10y ago
Worldwide production of lithium-ion batteries in 2013 was around 35GWh. The current rate is somewhat higher, I can't quite find how much. Tesla is currently producing around 100,000 cars/year. Each car has about 80kWh of battery on average (the options right now are 75 or 90), so that's about 8GWh. If they meet their goal of 400,000 Model 3s produced in 2018, assuming 55kWh of battery for those cars, that's 22GWh, not counting what goes into continuing Model S and Model X production. I'm not sure it's as small a fraction of global production as you say. One of the statistics they like to quote about their Gigafactory is that its final production will equal the total global production by the industry when construction started in 2013.
- toomuchtodo 10y ago
  JB Straubel just mentioned at the annual Tesla shareholder meeting they're now expecting to produce 150GW of storage capacity a year at the Gigafactory, split between vehicles and energy storage based on demand for both.
  - mstachowiak 10y ago
    Just for clarification, Tesla's initial estimates for Gigafactory production was 35GW/year at the cell level and 50GW/year at the pack level (with some cells produced by other suppliers). At the shareholder meeting they speculated they could 3x those numbers with the current Gigafactory. This is at full production, which is years away.
    - witty_username 10y ago
      GWh right?
- melling 10y ago
  Tesla hasn't sold 100,000 cars in their entire history. Last year they did sell 50,000 cars. Think they'll double that this year? http://www.fool.com/investing/general/2015/11/18/how-many-vehicles-could-tesla-motors-inc-sell-in-2.aspx http://www.fool.com/investing/general/2015/11/18/how-many-ve...
  - mikeash 10y ago
    They've sold well over 100,000 cars. The current total is around 140,000. They project 80,000 or 90,000 this year, with a slow start, so I think their current rate is 100,000 if not higher.
  - deleted 10y ago
    [deleted]
  - simonh 10y ago
    Do their sales in the first 5 months of 2016 somehow not count?
    - melling 10y ago
      I was looking at the wrong data. At any rate, the point is that Tesla is trying to ramp up production very fast. Going from 50,000 to 100,000 cars sounds difficult in 12 months, while maintaining quality.
      - misnome 10y ago
        Unless they have spent the past couple of years planning and preparing to up their capacity..
      - mikeash 10y ago
        Going from 2,700 to 22,000 in 12 months sounds difficult too, as does going from 22,000 to 32,000 and from 32,000 to 50,000.
- honkhonkpants 10y ago
  That analysis is sort of ridiculous. On the numerator you're using a number much higher than the number of cars Tesla has ever produced in a year. On the denominator you're using a years-old size of a rapidly growing market for batteries.
  - mikeash 10y ago
    How much do you think the industry has grown since 2013? How much do you think it will grow by 2018? Even if each one is a doubling, Tesla's part is pretty significant.
    - honkhonkpants 10y ago
      It's tough to get hard data but a 20-30% CAGR from 2013 to the present time seems like a reasonable guess.
      - mikeash 10y ago
        Sounds reasonable to me as well. I won't claim to have great numbers, just trying to compare the rough magnitudes.
  - shawn-furyan 10y ago
    How do you think that decisions are made under uncertainty? You can't always wait until you have very solid numbers to come up with an analysis. It's not "ridiculous" to come up with an order of magnitude estimate when better information is unavailable, it's a critical step in solving new problems. A more productive criticism would have been to offer an improvement, rather than to just point to the imperfections in an attempt to estimate the future impact of a new technology. edit: added second paragraph
    - honkhonkpants 10y ago
      OK, but in 2016 we don't have to guess how many cars Tesla built in 2015. It's historical fact.
- walrus01 10y ago
  > Worldwide production of lithium-ion batteries in 2013 was around 35GWh I don't think measuring it in terms of GWh is the best way to go about it, because a huge number of lithium ion batteries manufactured are NOT the type Tesla needs to use. Their battery packs are composed of 18650 size cylindrical cells. Vast amounts of LiIon batteries manufactured today are pouch/flat type cells for laptops, tablets, mobile phones and other portable consumer electronics. I would be very curious to see a number of the total estimated quantity of high-capacity 18650 cells manufactured worldwide in one year vs. the number of 18650 cells consumed by Tesla.
  - narrator 10y ago
    This ties neatly into another common economic fallacy: That capital is homogenous. Highly productive capital equipment is specialized, and requires long lead times for its production. It cannot quickly be repurposed for other uses. Thus, it's important that demand is genuine and not the result of "stimulus" that will waste a lot of capital equipment when stimulus is withdrawn.
    - Brakenshire 10y ago
      That's why you use stimulus to fill in short periods of slack up to the baseline economic capacity, but not on top. In other words, why you apply stimulus counter-cyclically. It's a good point about stimulus spending within a particular part of the economy, though.
- ksec 10y ago
  I had to do some calculation on the numbers. Gigafactory promise roughly 150GWh when in goes full online. I was wonder how could a SINGLE electric car company consumes so much batteries? More then Phones? It turns out even with 2Billion Phones at 5Wh, a conservative estimate, we are only at 10GWh. Billion Phones!, 10GWh!, 5 times more then the World Capacity in 2013 from 1 Factory! All these numbers and scales are so mind bogglingly huge that i fail to comprehend.
  - mikeash 10y ago
    It's pretty cool how much different the scale is with electric cars versus the sorts of batteries we're used to. I frequently see people discussing range impacts based on a complete misunderstanding of the magnitudes involved. They'll ask about how much range you'd expect to lose from running a dashcam or charging a phone, or recommend turning off headlights to conserve energy. And of course I can't blame them at all. We're used to battery-powered devices where things like screen brightness are critical to battery life. But then you run the numbers, and realize that a fully-charged Tesla could run the headlights for over a month before draining the battery, or that it could charge an iPhone 20,000 times....
deleted 10y ago
[deleted]
- codemanneil 10y ago
  Don't forgot Tesla Energy powerwall/powerpack as well
jeromeflipo 10y ago
How small a fraction? Tesla is expected to produce between 80,000 and 90,000 Model S and X this year. With 80 Kwh battery pack on average (my guess), Tesla currently consumes 6.4 Gwh of Lithium-ion battery. Back in 2013, the global production was estimated to be 35 Gwh (cf. Gigafactory announcement presentation). How much has it grown in the past 3 years?
- Someone 10y ago
  Eyeballing the chart in the article, and assuming kWh/car to have remained constant: by a factor of about 6. The article also mentions 70% growth in the last year. Assuming equal growth in the other years, It would be about a factor of 5.

mikeash 10y ago

Worldwide production of lithium-ion batteries in 2013 was around 35GWh. The current rate is somewhat higher, I can't quite find how much. Tesla is currently producing around 100,000 cars/year. Each car has about 80kWh of battery on average (the options right now are 75 or 90), so that's about 8GWh. If they meet their goal of 400,000 Model 3s produced in 2018, assuming 55kWh of battery for those cars, that's 22GWh, not counting what goes into continuing Model S and Model X production. I'm not sure it's as small a fraction of global production as you say. One of the statistics they like to quote about their Gigafactory is that its final production will equal the total global production by the industry when construction started in 2013.

toomuchtodo 10y ago
JB Straubel just mentioned at the annual Tesla shareholder meeting they're now expecting to produce 150GW of storage capacity a year at the Gigafactory, split between vehicles and energy storage based on demand for both.
- mstachowiak 10y ago
  Just for clarification, Tesla's initial estimates for Gigafactory production was 35GW/year at the cell level and 50GW/year at the pack level (with some cells produced by other suppliers). At the shareholder meeting they speculated they could 3x those numbers with the current Gigafactory. This is at full production, which is years away.
  - witty_username 10y ago
    GWh right?
melling 10y ago
Tesla hasn't sold 100,000 cars in their entire history. Last year they did sell 50,000 cars. Think they'll double that this year? http://www.fool.com/investing/general/2015/11/18/how-many-vehicles-could-tesla-motors-inc-sell-in-2.aspx http://www.fool.com/investing/general/2015/11/18/how-many-ve...
- mikeash 10y ago
  They've sold well over 100,000 cars. The current total is around 140,000. They project 80,000 or 90,000 this year, with a slow start, so I think their current rate is 100,000 if not higher.
- deleted 10y ago
  [deleted]
- simonh 10y ago
  Do their sales in the first 5 months of 2016 somehow not count?
  - melling 10y ago
    I was looking at the wrong data. At any rate, the point is that Tesla is trying to ramp up production very fast. Going from 50,000 to 100,000 cars sounds difficult in 12 months, while maintaining quality.
    - misnome 10y ago
      Unless they have spent the past couple of years planning and preparing to up their capacity..
    - mikeash 10y ago
      Going from 2,700 to 22,000 in 12 months sounds difficult too, as does going from 22,000 to 32,000 and from 32,000 to 50,000.
honkhonkpants 10y ago
That analysis is sort of ridiculous. On the numerator you're using a number much higher than the number of cars Tesla has ever produced in a year. On the denominator you're using a years-old size of a rapidly growing market for batteries.
- mikeash 10y ago
  How much do you think the industry has grown since 2013? How much do you think it will grow by 2018? Even if each one is a doubling, Tesla's part is pretty significant.
  - honkhonkpants 10y ago
    It's tough to get hard data but a 20-30% CAGR from 2013 to the present time seems like a reasonable guess.
    - mikeash 10y ago
      Sounds reasonable to me as well. I won't claim to have great numbers, just trying to compare the rough magnitudes.
- shawn-furyan 10y ago
  How do you think that decisions are made under uncertainty? You can't always wait until you have very solid numbers to come up with an analysis. It's not "ridiculous" to come up with an order of magnitude estimate when better information is unavailable, it's a critical step in solving new problems. A more productive criticism would have been to offer an improvement, rather than to just point to the imperfections in an attempt to estimate the future impact of a new technology. edit: added second paragraph
  - honkhonkpants 10y ago
    OK, but in 2016 we don't have to guess how many cars Tesla built in 2015. It's historical fact.
walrus01 10y ago
> Worldwide production of lithium-ion batteries in 2013 was around 35GWh I don't think measuring it in terms of GWh is the best way to go about it, because a huge number of lithium ion batteries manufactured are NOT the type Tesla needs to use. Their battery packs are composed of 18650 size cylindrical cells. Vast amounts of LiIon batteries manufactured today are pouch/flat type cells for laptops, tablets, mobile phones and other portable consumer electronics. I would be very curious to see a number of the total estimated quantity of high-capacity 18650 cells manufactured worldwide in one year vs. the number of 18650 cells consumed by Tesla.
- narrator 10y ago
  This ties neatly into another common economic fallacy: That capital is homogenous. Highly productive capital equipment is specialized, and requires long lead times for its production. It cannot quickly be repurposed for other uses. Thus, it's important that demand is genuine and not the result of "stimulus" that will waste a lot of capital equipment when stimulus is withdrawn.
  - Brakenshire 10y ago
    That's why you use stimulus to fill in short periods of slack up to the baseline economic capacity, but not on top. In other words, why you apply stimulus counter-cyclically. It's a good point about stimulus spending within a particular part of the economy, though.
ksec 10y ago
I had to do some calculation on the numbers. Gigafactory promise roughly 150GWh when in goes full online. I was wonder how could a SINGLE electric car company consumes so much batteries? More then Phones? It turns out even with 2Billion Phones at 5Wh, a conservative estimate, we are only at 10GWh. Billion Phones!, 10GWh!, 5 times more then the World Capacity in 2013 from 1 Factory! All these numbers and scales are so mind bogglingly huge that i fail to comprehend.
- mikeash 10y ago
  It's pretty cool how much different the scale is with electric cars versus the sorts of batteries we're used to. I frequently see people discussing range impacts based on a complete misunderstanding of the magnitudes involved. They'll ask about how much range you'd expect to lose from running a dashcam or charging a phone, or recommend turning off headlights to conserve energy. And of course I can't blame them at all. We're used to battery-powered devices where things like screen brightness are critical to battery life. But then you run the numbers, and realize that a fully-charged Tesla could run the headlights for over a month before draining the battery, or that it could charge an iPhone 20,000 times....

deleted 10y ago

[deleted]

codemanneil 10y ago
Don't forgot Tesla Energy powerwall/powerpack as well

jeromeflipo 10y ago

How small a fraction? Tesla is expected to produce between 80,000 and 90,000 Model S and X this year. With 80 Kwh battery pack on average (my guess), Tesla currently consumes 6.4 Gwh of Lithium-ion battery. Back in 2013, the global production was estimated to be 35 Gwh (cf. Gigafactory announcement presentation). How much has it grown in the past 3 years?

Someone 10y ago
Eyeballing the chart in the article, and assuming kWh/car to have remained constant: by a factor of about 6. The article also mentions 70% growth in the last year. Assuming equal growth in the other years, It would be about a factor of 5.