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If you look at their strategy, they're aiming to make profit around 2020 when the Gigafactory is at full capacity and the Model 3 is shipping at full capacity.

by jaxbot 11y ago

If you look at their strategy, they're aiming to make profit around 2020 when the Gigafactory is at full capacity and the Model 3 is shipping at full capacity. At that point, the government subsidy expires for Tesla (100,000 cars shipped by one manu) and they make full profits on their own dime. If they were really unsustainable, nobody would be investing in TSLA right now. The tax subsidy applies to all electric cars, and has made the Leaf and other cars in its class affordable for many Americans, which has pushed electric car adoption. Even in the case of Tesla, there are plenty of people who couldn't afford a Tesla if it weren't for the $7,500 tax credit. It seems silly, but it's a big chunk of money, and when you're stretching your budget to afford a nice, eco-friendly and American-produced car, the extra subsidy really helps. Tesla is opening the door for sustainable transit in the U.S., has pushed other car manufacturers to follow suit, and is creating a buttload of jobs with their domestic factory, the Gigafactory 1, their local service centers, and whatever comes next. It is frustrating to see tax money thrown at corporations, but hey, Tesla didn't take a multi-billion dollar bailout when they made poor business decisions and were going to cost America millions of jobs. Just something to put this in perspective.

drzaiusapelord 11y ago
The gigafactory concept is just domestic manufacturing. It cannot change how much Lithium there is in the ground, how hard it is to get to it in these quantities, and how expensive it is to turn into batteries, etc. Its nice that Elon has his own manufacturing, but the cost savings compared to outsourcing are probably going to be trivial. Unless he can get prices down to a 1/10th of what it costs today, he won't ever be competitive outside of the luxury market. Lets start calling a turkey a turkey here. EV's as the affordable family car is just not going to happen. When do the taxpayers say enough is enough? I think its time. Lets let Elon use his PERSONAL billions to run this turkey. If he did, we both know he'd shut down in a second. The "scales of industry" argument is fairly bunk considering their previous source was Panasonic, who knows full well how to make cheap lithium-ion. There's only so much we can do to cheapen them. We're probably very close to the minium manufacture cost. Cutting out the middle-man will save Elon, what, 5% maybe, 10% if everything goes perfectly? He needs a minimum of 60-80% to compete with ICE. Heck, the "gigafactory" is just a legal shell for panasonic to come in with their engineers and their patents and their processes under Elon's US company. Elon is just putting on his top hat and monocole and playing landlord, he is not engineering these batteries: http://www.teslamotors.com/en_AU/blog/panasonic-and-tesla-sign-agreement-gigafactory http://www.teslamotors.com/en_AU/blog/panasonic-and-tesla-si... "According to the agreement, Tesla will prepare, provide and manage the land, buildings and utilities. Panasonic will manufacture and supply cylindrical lithium-ion cells and invest in the associated equipment, machinery, and other manufacturing tools based on their mutual approval." -- tldr; Lithium-ion just isnt cost competitive (and has major wear issues). ICE is winning for a reason. We need something better to defeat ICE. edit: downvotes with zero cites, zero cost arguments against my thesis but wishful thinking? Stay classy HN.
- dangrossman 11y ago
  > EV's as the affordable family car is just not going to happen The average price of a used car last year was $15,900. For that you can buy a 2012/2013 Nissan Leaf with low miles and still have a few grand in your pocket. EVs as the affordable family car has already happened.
- lorenzhs 11y ago
  Of course the Gigafactory can change the cost of battery manufacturing. The economies of scale apply here, as the Gigafactory will (roughly) double the world's production of LiIon batteries. You continue to make these baseless claims in this thread, which makes me question the sincereness of your participation in this discussion.
  - drzaiusapelord 11y ago
    >The economies of scale apply here You honestly think mega manufacturers like Panasonic don't have the proper scale for lithium-ion? I'm not denying Elon can cut costs by uber-specializing and cutting out middle-men, but we're looking at maybe 5% or even 10% or so, not 70-80%. Which is what you need to be comparable to ICE cars. Heck, panasonic is literally making the batteries INSIDE HIS FACTORY. So don't expect big cuts: "According to the agreement, Tesla will prepare, provide and manage the land, buildings and utilities. Panasonic will manufacture and supply cylindrical lithium-ion cells and invest in the associated equipment, machinery, and other manufacturing tools based on their mutual approval." http://www.teslamotors.com/en_AU/blog/panasonic-and-tesla-sign-agreement-gigafactory http://www.teslamotors.com/en_AU/blog/panasonic-and-tesla-si...
    - lotsofmangos 11y ago
      "You honestly think mega manufacturers like Panasonic don't have the proper scale for lithium-ion?" What is the proper scale? The scale of this factory is the same size as all the other lithium battery plants in the world combined. And do you think Panasonic would be throwing money at it if it thought the numbers were that wrong? This is constantly being presented by some people as a sort of majestic con being perpetrated by Elon, which is just ridiculous when you consider the other players involved.
hnnewguy 11y ago
>has pushed other car manufacturers to follow suit, This is Tesla's biggest accomplishment, in my opinion. And we will all benefit greatly from it.

by jaxbot 11y ago

drzaiusapelord 11y ago

The gigafactory concept is just domestic manufacturing. It cannot change how much Lithium there is in the ground, how hard it is to get to it in these quantities, and how expensive it is to turn into batteries, etc. Its nice that Elon has his own manufacturing, but the cost savings compared to outsourcing are probably going to be trivial. Unless he can get prices down to a 1/10th of what it costs today, he won't ever be competitive outside of the luxury market. Lets start calling a turkey a turkey here. EV's as the affordable family car is just not going to happen. When do the taxpayers say enough is enough? I think its time. Lets let Elon use his PERSONAL billions to run this turkey. If he did, we both know he'd shut down in a second. The "scales of industry" argument is fairly bunk considering their previous source was Panasonic, who knows full well how to make cheap lithium-ion. There's only so much we can do to cheapen them. We're probably very close to the minium manufacture cost. Cutting out the middle-man will save Elon, what, 5% maybe, 10% if everything goes perfectly? He needs a minimum of 60-80% to compete with ICE. Heck, the "gigafactory" is just a legal shell for panasonic to come in with their engineers and their patents and their processes under Elon's US company. Elon is just putting on his top hat and monocole and playing landlord, he is not engineering these batteries: http://www.teslamotors.com/en_AU/blog/panasonic-and-tesla-sign-agreement-gigafactory http://www.teslamotors.com/en_AU/blog/panasonic-and-tesla-si... "According to the agreement, Tesla will prepare, provide and manage the land, buildings and utilities. Panasonic will manufacture and supply cylindrical lithium-ion cells and invest in the associated equipment, machinery, and other manufacturing tools based on their mutual approval." -- tldr; Lithium-ion just isnt cost competitive (and has major wear issues). ICE is winning for a reason. We need something better to defeat ICE. edit: downvotes with zero cites, zero cost arguments against my thesis but wishful thinking? Stay classy HN.

dangrossman 11y ago
> EV's as the affordable family car is just not going to happen The average price of a used car last year was $15,900. For that you can buy a 2012/2013 Nissan Leaf with low miles and still have a few grand in your pocket. EVs as the affordable family car has already happened.
lorenzhs 11y ago
Of course the Gigafactory can change the cost of battery manufacturing. The economies of scale apply here, as the Gigafactory will (roughly) double the world's production of LiIon batteries. You continue to make these baseless claims in this thread, which makes me question the sincereness of your participation in this discussion.
- drzaiusapelord 11y ago
  >The economies of scale apply here You honestly think mega manufacturers like Panasonic don't have the proper scale for lithium-ion? I'm not denying Elon can cut costs by uber-specializing and cutting out middle-men, but we're looking at maybe 5% or even 10% or so, not 70-80%. Which is what you need to be comparable to ICE cars. Heck, panasonic is literally making the batteries INSIDE HIS FACTORY. So don't expect big cuts: "According to the agreement, Tesla will prepare, provide and manage the land, buildings and utilities. Panasonic will manufacture and supply cylindrical lithium-ion cells and invest in the associated equipment, machinery, and other manufacturing tools based on their mutual approval." http://www.teslamotors.com/en_AU/blog/panasonic-and-tesla-sign-agreement-gigafactory http://www.teslamotors.com/en_AU/blog/panasonic-and-tesla-si...
  - lotsofmangos 11y ago
    "You honestly think mega manufacturers like Panasonic don't have the proper scale for lithium-ion?" What is the proper scale? The scale of this factory is the same size as all the other lithium battery plants in the world combined. And do you think Panasonic would be throwing money at it if it thought the numbers were that wrong? This is constantly being presented by some people as a sort of majestic con being perpetrated by Elon, which is just ridiculous when you consider the other players involved.

hnnewguy 11y ago

>has pushed other car manufacturers to follow suit, This is Tesla's biggest accomplishment, in my opinion. And we will all benefit greatly from it.