5 ms·

The gamble on Tesla’s gigafactory in the Nevada desert

29 points by rck 12y ago

brianstorms 12y ago
"The company sold an estimated 18,750 of its Model S roadsters in 2014, at a sticker price of about $70,000." 18,750? How about more like ~33,000? And "roadsters?" Really? Used to be the Washington Post had reliable reporters. Now it's just another blog.
- agumonkey 12y ago
  And 56,782 worldwide as of Dec 2014, almost 4B USD. Musk claiming a 25% margin so ~1B. http://en.wikipedia.org/wiki/Tesla_Model_S#Sales_and_markets http://en.wikipedia.org/wiki/Tesla_Model_S#Sales_and_markets http://www.quora.com/Whats-the-gross-profit-rate-of-Tesla-Model-S http://www.quora.com/Whats-the-gross-profit-rate-of-Tesla-Mo...
  - deleted 12y ago
    [deleted]
  - agumonkey 12y ago
    Hmm some say that Tesla sells at loss http://money.cnn.com/2015/02/12/investing/tesla-apple-elon-musk/ http://money.cnn.com/2015/02/12/investing/tesla-apple-elon-m...
    - greglindahl 12y ago
      The 25% margin mentioned in the parent is a gross margin. I don't think anyone has ever said that Tesla's gross margin is negative. These terms mean something specific.
  - deleted 12y ago
    [deleted]
  - Someone 12y ago
    That 57k number is cumulative, not in 2014. The Wikipedia page gives about 32k for in 2014
    - agumonkey 12y ago
      Yep, that's what I meant. Since beginning.
- ScottBurson 12y ago
  Here's another error: Twelve years after Musk founded it, .... Tesla was founded by Martin Eberhard and Marc Tarpenning. Musk was an early investor, leading the Series A, but not a founder.[0] [0] http://en.wikipedia.org/wiki/Tesla_Motors#History http://en.wikipedia.org/wiki/Tesla_Motors#History
  - greglindahl 12y ago
    "Founder" is not a factual term. It is not unusual for it to be awarded to major, early players who show up after the incorporation papers are filed.
    - ScottBurson 12y ago
      I still think the sentence should have read, "Twelve years after Musk helped found it, ....".
CHY872 12y ago
Bizarre article. The California border is waaay closer than they stated, and although it's possible for a long term worker to live in SF and commute weekly, that would be the worst of both worlds; obscene living costs + a huge commute. The 49% they state won't be Californians, they'll be people from all around the country who agree to move to Reno. For the purposes of the Nevadan economy, this is a win-win (although it might not be as good for education, but that's what the education requirements are for).
Animats 12y ago
I still can't see how that place can profitably employ 6,500 people. That's a huge head count for a US industrial plant. As I pointed out yesterday, the largest auto assembly plant in the US, Ford's at Kansas City, has 3700 employees. The Leaf battery plant has about 250. Modern manufacturing plants which crank out identical products in high volume don't need many people. 6500 employees is the kind of number you'd get if you looked at a non-automated battery pack plant in China. Low-end battery plants in China usually have cells manufactured in automated facilities (often in Japan) which are then assembled by hand into battery packs. That may be Tesla's plan. Cell manufacturing in the Reno plant will be done by Panasonic Energy Corporation of North America. They're hiring.[2] Panasonic writes: "Panasonic Corporation will cooperate with Tesla Motors, Inc. to construct a large-scale advanced battery manufacturing facility known as the Gigafactory in the state of Nevada. Panasonic's role in the Gigafactory will be to manufacture and supply cylindrical lithium-ion cells and invest in the associated equipment, machinery, and other manufacturing tools based on the battery demand from Tesla. Tesla will take the cells and other components to assemble battery modules and packs." So it looks like the factory will make round Panasonic cells a lot like the current Ncr18650 ones[3], using Panasonic technology and employees, which will then be hand-assembled into packs by Tesla employees. That's essentially what they're doing now. Unclear why this will reduce cost per unit. [1] http://www.industry.siemens.com/topics/global/en/battery-manufacturing/process/pages/default.aspx http://www.industry.siemens.com/topics/global/en/battery-man... [2] http://panasonic.taleo.net/careersection/external/jobdetail.ftl?job=1403648&src=JB-10200 http://panasonic.taleo.net/careersection/external/jobdetail.... [3] http://www.amazon.com/Panasonic-Ncr18650a-3100mAh-Rechargeable-panasonic/dp/B00AHS5EH4 http://www.amazon.com/Panasonic-Ncr18650a-3100mAh-Rechargeab...
- nether 12y ago
  Automation is enormously expensive, human technicians are incredibly cheap, in the short term. Tesla probably doesn't have the capital yet to buy a huge array of robot arms to assemble their cars. The smaller the company, even when building cars or airplanes, the more likely you'll see everything hand-assembled.
- greglindahl 12y ago
  The Gigafactory is intended to end up producing as many batteries as the rest of the world does, when it was announced. That's what "economy of scale" means. It's fair to say that no one knows what cost savings that might produce, but it's silly to say that you can't see how that might possibly have cost savings.
pa5tabear 12y ago
Is the work-life balance working for a facility like this as bad as it is for the more design-oriented engineering at Tesla?
- plorkyeran 12y ago
  Having people work over 40 hours a week is actively disincentivized by at least two things: the workers aren't in an overtime-exempt field where extra hours are free for the employer, and they're getting tax incentives for creating new jobs, which rewards hiring more people to work fewer hours each.
topkai22 12y ago
One issue with the article is that doesn't distinguish between the statistics for Nevada as a whole, which are totally dominated by Las Vegas's size, and northern Nevada, which has a different economic makeup than sin city. As a recent transplant to Reno I've been very happy with how livable the area is. The University of Nevada -Reno is a solid research university, the town has a palpable belief in itself these days, the proximity to Tahoe makes all sorts of luxuries available, and the economy is both more diverse and better educated than this article indicates (again, Reno != Vegas.) The Tesla deal certainly seems to have spurred conversations that weren't happening a year ago, and I've personally been getting a number of headhunters calling me for local software development work in the last couple of months, which was a pleasant surprise, I was worried I had put a giant railroad spike in my career by moving. The political leadership in Reno and Northern Nevada have been playing a long game for a while to diversify and expand the economy. I considered it very serendipitous to find out how successful they've been since I moved here.
- topkai22 12y ago
  Being a 30 minute bike ride to work, 18 minutes to the slopes, and able to afford a nice SFH home in a walkable area with great schools helps my opinion too.
- marssaxman 12y ago
  I lived in Reno for a couple of years in the late '90s, working for what I believe to have been the only software company in the city at the time (MountainGate, later acquired by ADIC). It was clear even then that the city government was trying to develop Reno into something more like a California-style tech hub, but they hadn't gotten very far. It was a lonely place to live, for a young techie, though I have fond memories of all the long weekends I spent jeeping around in the desert. I would never consider moving back, but I'm glad the place has stuck to its path and started getting somewhere with it.

29 points by rck 12y ago

"The company sold an estimated 18,750 of its Model S roadsters in 2014, at a sticker price of about $70,000." 18,750? How about more like ~33,000? And "roadsters?" Really? Used to be the Washington Post had reliable reporters. Now it's just another blog.

agumonkey 12y ago
And 56,782 worldwide as of Dec 2014, almost 4B USD. Musk claiming a 25% margin so ~1B. http://en.wikipedia.org/wiki/Tesla_Model_S#Sales_and_markets http://en.wikipedia.org/wiki/Tesla_Model_S#Sales_and_markets http://www.quora.com/Whats-the-gross-profit-rate-of-Tesla-Model-S http://www.quora.com/Whats-the-gross-profit-rate-of-Tesla-Mo...
- deleted 12y ago
  [deleted]
- agumonkey 12y ago
  Hmm some say that Tesla sells at loss http://money.cnn.com/2015/02/12/investing/tesla-apple-elon-musk/ http://money.cnn.com/2015/02/12/investing/tesla-apple-elon-m...
  - greglindahl 12y ago
    The 25% margin mentioned in the parent is a gross margin. I don't think anyone has ever said that Tesla's gross margin is negative. These terms mean something specific.
- deleted 12y ago
  [deleted]
- Someone 12y ago
  That 57k number is cumulative, not in 2014. The Wikipedia page gives about 32k for in 2014
  - agumonkey 12y ago
    Yep, that's what I meant. Since beginning.
ScottBurson 12y ago
Here's another error: Twelve years after Musk founded it, .... Tesla was founded by Martin Eberhard and Marc Tarpenning. Musk was an early investor, leading the Series A, but not a founder.[0] [0] http://en.wikipedia.org/wiki/Tesla_Motors#History http://en.wikipedia.org/wiki/Tesla_Motors#History
- greglindahl 12y ago
  "Founder" is not a factual term. It is not unusual for it to be awarded to major, early players who show up after the incorporation papers are filed.
  - ScottBurson 12y ago
    I still think the sentence should have read, "Twelve years after Musk helped found it, ....".

CHY872 12y ago

Bizarre article. The California border is waaay closer than they stated, and although it's possible for a long term worker to live in SF and commute weekly, that would be the worst of both worlds; obscene living costs + a huge commute. The 49% they state won't be Californians, they'll be people from all around the country who agree to move to Reno. For the purposes of the Nevadan economy, this is a win-win (although it might not be as good for education, but that's what the education requirements are for).

Animats 12y ago

I still can't see how that place can profitably employ 6,500 people. That's a huge head count for a US industrial plant. As I pointed out yesterday, the largest auto assembly plant in the US, Ford's at Kansas City, has 3700 employees. The Leaf battery plant has about 250. Modern manufacturing plants which crank out identical products in high volume don't need many people. 6500 employees is the kind of number you'd get if you looked at a non-automated battery pack plant in China. Low-end battery plants in China usually have cells manufactured in automated facilities (often in Japan) which are then assembled by hand into battery packs. That may be Tesla's plan. Cell manufacturing in the Reno plant will be done by Panasonic Energy Corporation of North America. They're hiring.[2] Panasonic writes: "Panasonic Corporation will cooperate with Tesla Motors, Inc. to construct a large-scale advanced battery manufacturing facility known as the Gigafactory in the state of Nevada. Panasonic's role in the Gigafactory will be to manufacture and supply cylindrical lithium-ion cells and invest in the associated equipment, machinery, and other manufacturing tools based on the battery demand from Tesla. Tesla will take the cells and other components to assemble battery modules and packs." So it looks like the factory will make round Panasonic cells a lot like the current Ncr18650 ones[3], using Panasonic technology and employees, which will then be hand-assembled into packs by Tesla employees. That's essentially what they're doing now. Unclear why this will reduce cost per unit. [1] http://www.industry.siemens.com/topics/global/en/battery-manufacturing/process/pages/default.aspx http://www.industry.siemens.com/topics/global/en/battery-man... [2] http://panasonic.taleo.net/careersection/external/jobdetail.ftl?job=1403648&src=JB-10200 http://panasonic.taleo.net/careersection/external/jobdetail.... [3] http://www.amazon.com/Panasonic-Ncr18650a-3100mAh-Rechargeable-panasonic/dp/B00AHS5EH4 http://www.amazon.com/Panasonic-Ncr18650a-3100mAh-Rechargeab...

nether 12y ago
Automation is enormously expensive, human technicians are incredibly cheap, in the short term. Tesla probably doesn't have the capital yet to buy a huge array of robot arms to assemble their cars. The smaller the company, even when building cars or airplanes, the more likely you'll see everything hand-assembled.
greglindahl 12y ago
The Gigafactory is intended to end up producing as many batteries as the rest of the world does, when it was announced. That's what "economy of scale" means. It's fair to say that no one knows what cost savings that might produce, but it's silly to say that you can't see how that might possibly have cost savings.

pa5tabear 12y ago

Is the work-life balance working for a facility like this as bad as it is for the more design-oriented engineering at Tesla?

plorkyeran 12y ago
Having people work over 40 hours a week is actively disincentivized by at least two things: the workers aren't in an overtime-exempt field where extra hours are free for the employer, and they're getting tax incentives for creating new jobs, which rewards hiring more people to work fewer hours each.

topkai22 12y ago

One issue with the article is that doesn't distinguish between the statistics for Nevada as a whole, which are totally dominated by Las Vegas's size, and northern Nevada, which has a different economic makeup than sin city. As a recent transplant to Reno I've been very happy with how livable the area is. The University of Nevada -Reno is a solid research university, the town has a palpable belief in itself these days, the proximity to Tahoe makes all sorts of luxuries available, and the economy is both more diverse and better educated than this article indicates (again, Reno != Vegas.) The Tesla deal certainly seems to have spurred conversations that weren't happening a year ago, and I've personally been getting a number of headhunters calling me for local software development work in the last couple of months, which was a pleasant surprise, I was worried I had put a giant railroad spike in my career by moving. The political leadership in Reno and Northern Nevada have been playing a long game for a while to diversify and expand the economy. I considered it very serendipitous to find out how successful they've been since I moved here.

topkai22 12y ago
Being a 30 minute bike ride to work, 18 minutes to the slopes, and able to afford a nice SFH home in a walkable area with great schools helps my opinion too.
marssaxman 12y ago
I lived in Reno for a couple of years in the late '90s, working for what I believe to have been the only software company in the city at the time (MountainGate, later acquired by ADIC). It was clear even then that the city government was trying to develop Reno into something more like a California-style tech hub, but they hadn't gotten very far. It was a lonely place to live, for a young techie, though I have fond memories of all the long weekends I spent jeeping around in the desert. I would never consider moving back, but I'm glad the place has stuck to its path and started getting somewhere with it.