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Inside Tesla’s $5 Billion Gigafactory

Inside Tesla's $5 Billion Gigfactory

Special thanks to Lomiko Metals (TSX-V: LMR) and Global Cobalt (TSX-V: GCO) for helping us put together this infographic.

Inside Tesla’s $5B Gigafactory

With $5 billion in capital expenditures and 6,500 high tech jobs, several states continue to court Tesla Motors to build their next megaproject within their borders. The Tesla Gigfactory, slated to open doors in 2017, will set a new precedent for economies of scale in battery production.

Tesla’s new factory will produce more lithium-ion batteries under one roof than all of 2013′s global production combined. As a result, the electric car company estimates this will cut costs per kWh by 30%.

Tesla’s product strategy relies on it. The Gen III is supposed to retail for only $35,000, which is only half the cost of the more upscale Model S.

UBS notes that raw materials make up 70% of the cost of each lithium-ion battery, so sourcing and procuring these minerals will be a very important component of their overall strategy. In the infographic, we break down the potential impact this will have on these commodities. Special thanks to Simon Moores and The Gold Report, who had a great interview recently on the subject.

Graphite:

In 2013, flake graphite production was 375,000 tonnes. The Gigafactory alone would add another 126,000 tonnes (34% increase) over 2013 production. Even more significant, the increase on battery-grade graphite demand would be 154%.

Cobalt:

55% of cobalt comes from the Democratic Republic of the Congo.  Tesla says they do not source from the Congo, so this makes getting cobalt a little more difficult. 42% of cobalt demand is from batteries, making it the blue metal’s #1 use. Current Tesla batteries use about 9% cobalt by weight (NCA formulation).

Lithium:

There has been a steady supply of lithium in Chile since 1996, so this will likely be the easiest commodity to source.

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  • Jay Currie

    Great information Jeff. As a side note, don’t discount the potential of graphene based super capacitors. Either with Li-ion batteries or on their own they may provide a lighter, more energy dense solution. Plus there is every indication that they may be able to suck up the energy generated in braking.

    • tech01xpert

      Super capacitors are, unfortunately, still an order of magnitude lower in specific energy. Tesla’s NCA cells are at roughly 250-260 Wh/kg, while the best super capacitors are in the 20-30 Wh/kg range. It would be nice, but they are a still a long ways off. They’d have to quadruple specific energy to match the older battery design in the Nissan Leaf.

    • WeaponZero

      “Plus there is every indication that they may be able to suck up the energy generated in braking.”

      Hybrids and EVs already have this for YEARS. It is called regenerative braking.

  • montana83

    Where is the electricity coming from for let’s say 50 million electric cars as Obama trashes coal, oil, gas and nuclear. Wind and solar? You must be joking.
    Thorium (LFTR/MSR) is the answer but Obama’s DOE hates it, and so does the conventional nuke industry to say nothing of the solar, wind and fossil fuel industries. Disruptive technologies have enemies and energy is the single biggest business in the world. If I were Tesla I would support thorium.

    • tech01xpert

      The U.S. is producing a lot of natural gas and oil. Lots of natural gas power plants have come on line and are coming online. Nuclear power plants are continuing in operations, the issue is getting the NIMBY syndrome sorted out to build more.

      The problem for coal plants is both complying with stricter emissions standards and the fact that natural gas is far more economical at the moment. However, we should want coal plants to clean up their act – we breathe what they emit. It’s a cost of doing business and something they should have done a long time ago instead of perpetually putting it off and hoping to buy elections to make the Clean Water Act go away.

      As for solar, wind, and hydro, we should be investing in lots more of each. We are a bit tapped out for hydro though. It’s the responsible and fiscally conservative thing to do.

    • WeaponZero

      what?

      1) Obama won’t even be in office by the time we have 50 million EVs on the road. I mean you are aware his last term ends in 2016 right?

      2) Oil makes up 1% of the electric grid, aka it is not used.

      3) We have many ways to generate power from solar, natural gas, hydro, wind, nuclear, geothermal and etc.

      4) Coal use has been dropping over the years normally. With or without coal makes no difference.

      Look I am all for LFTR but don’t discount solar and wind, there is plenty of potential there when you factor in cheap energy storage that the gigafactory will produce.

  • solarisgeothermal

    Absolutely AWESOME! I cannot wait three years to get a Tesla. So happy to hear Tesla is re-inventing the automotive industry in a disruptive way. The same will happen to power Utilities and Fossil Fuels, they are in their death spiral now as solar doubles each two years. Tesla fact: no one has died in a Tesla crash.

  • WeaponZero

    Why are we so sure that they will use graphite and not silicon? New panasonic batteries use silicon over graphite for the anode.

    • esqualido

      Are you sure? Silicon is not much of a conductor

      • WeaponZero

        Yes I am sure, silicon can be both conductive and an insulator. Remember silicon is a metalloid.

  • ManAboutDallas

    When the U.S. economy implodes in the next few months, the market for obscenely-priced automobiles will implode as well, and Tesla will join Tucker in the ashbin of history.

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