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These 9 Slides Put the New Tesla Gigafactory in Perspective

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Title slide Tesla Gigafactory

This week, Tesla Motors officially unveils its massive new Gigafactory 1 at a grand opening event on July 29, 2016.

The ultimate objective of the first Gigafactory is simple, but it is not for the faint of heart. Battery costs are the most expensive component of electric vehicles, and the multi-billion dollar Gigafactory aims to add scale, vertical integration, and other efficiencies together to bring lithium-ion battery costs down.

Costs have already come down faster than most analysts have predicted, and the Gigafactory could be the final catalyst to get below the industry’s holy grail of $100 per kWh. Cheaper battery packs could make electric vehicles competitive with traditional gas-powered vehicles – and if that happens, it is a game-changer for the auto industry.

It’s important to note that the Gigafactory is fairly modular by design, and construction is not completed in full yet. That said, here is what we know about the new Tesla Gigafactory and its possible impact.

1. The Tesla Gigafactory 1 will be the largest building in the world by footprint.

Tesla Gigafactory the largest building by footprint

The Gigafactory will take up 5.8 million sq. ft of space, making it bigger than Boeing’s giant facility in Everett, WA. That’s roughly equivalent to 100 football fields.

While the Gigafactory will certainly be one of the largest factories by volume, it will be hard to compete with Boeing for first place there. Boeing’s Everett facility, which is six storeys high to accommodate the construction giant planes, has a total of 472 million cu. ft of volume.

2. The scale will make production of lithium-ion batteries way cheaper.

Tesla Gigafactory battery production

Tesla recently stated that its current battery cost is $190 per kWh for the Model S.

The Gigafactory aims to reduce battery costs by 30%. Tesla expects this to happen through vertical integration, adding economies of scale, reducing waste, optimizing processes, and tidying up the supply chain.

Tesla CEO Elon Musk has also stated that the company is changing the form factor of the batteries away from the industry standard. Lithium-ion cells used for notebook computer batteries are typically produced in an 18650 cell format (18mm x 65mm), but Tesla will produce them in a 20700 cell format (20mm x 70mm).

3. Tesla initially planned to produce 50 GWh of battery packs by 2020.

Tesla Gigafactory battery production

4. However, Tesla has now moved that target forward by two years.

Tesla Gigafactory battery production

Now, it’s anticipated that Tesla could triple battery production to meet this demand. This means it could produce up to 105 GWh of battery cells, and 150 GWh of completed battery packs. Musk says the current factory size will be sufficient for this ramp-up.

5. This will require serious amounts of raw materials.

Tesla Gigafactory raw materials

We previously showed the extraordinary amounts of materials needed to build a Tesla Model S. The batteries, which currently use an NCA cathode formulation, need lithium, graphite, cobalt, nickel, and other base metals that aren’t used as much in an internal combustion engine.

This has created a significant rush for suppliers of these raw materials. It’s also something we are covering in our five-part Battery Series, in which we are looking at lithium-ion battery demand, as well as the materials that will need to be sourced as electric cars go mainstream.

6. If Tesla hits its 2018 projection, it will be a serious milestone for EVs.

Tesla milestone for EVs

Tesla aims to sell 500,000 cars in 2018. If it hits the mark, it will be a big milestone for the electric vehicle market.

To put that number in perspective, the total amount of sales (all-time) for the three most popular EV models (Leaf, Volt, Model S) added up to only about 404,000 cars as of December 2015.

7. This would also put Tesla on par with major auto brands.

Tesla milestone for EVs

Tesla is still a small auto manufacturer – but if it meets its stated production goal of 500,000 vehicles in 2018, that will be comparable with brands like Chrysler, Land Rover, Isuzu, Volvo, and Lexus.

This still doesn’t compare to a giant like Ford, which sold 780,354 F-series pickups alone in 2015. But, it is a step in the right direction for Elon Musk’s company.

8. For every 500,000 electric cars on the road, 192 million gallons of gas is saved.

Impact on environment

That’s equal to 290 Olympic-sized swimming pools filled with gasoline, or 21,333 tanker trucks.

Even taking into account coal power and pollution, driving a Tesla is already far better for the environment in most states.

9. Other Giga-facts

Other Giga-Facts

The Gigafactory will be 100% powered by renewable energy. It’ll have solar panels covering the roof, while also drawing power from wind and geothermal.

It will employ 6,500 people, and it will have a state-of-the-art recycling system to make use of old battery packs.

Elon Musk says the “exit rate” of lithium-ion cells from the Gigafactory will literally be faster than bullets from a machine gun.

BONUS SLIDE:

Elon Musk's Master Plan for Tesla

Last week, Elon Musk unveiled the “master plan” behind Tesla.

The Tesla Gigafactory will ultimately help to make these ambitions possible.

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Automation

Ranked: The Autonomous Vehicle Readiness of 20 Countries

This interactive visual shows the countries best prepared for the shift to autonomous vehicles, as well as the associated societal and economic impacts.

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For the past decade, manufacturers and governments all over the world have been preparing for the adoption of self-driving cars—with the promise of transformative economic development.

As autonomous vehicles become more of a looming certainty, what will be the wider impacts of this monumental transition?

Which Countries are Ready?

Today’s interactive visual from Aquinov Mathappan ranks countries on their preparedness to adopt self-driving cars, while also exploring the range of challenges they will face in achieving complete automation.

The Five Levels of Automation

The graphic above uses the Autonomous Vehicles Readiness Index, which details the five levels of automation. Level 0 vehicles place the responsibility for all menial tasks with the driver, including steering, braking, and acceleration. In contrast, level 5 vehicles demand nothing of the driver and can operate entirely without their presence.

Today, most cars sit between levels 1 and 3, typically with few or limited automated functions. There are some exceptions to the rule, such as certain Tesla models and Google’s Waymo. Both feature a full range of self-driving capabilities—enabling the car to steer, accelerate and brake on behalf of the driver.

The Journey to Personal Driving Freedom

There are three main challenges that come with achieving a fully-automated level 5 status:

  1. Data Storage
    Effectively storing data and translating it into actionable insights is difficult when 4TB of raw data is generated every day—the equivalent of the data generated by 3,000 internet users in 24 hours.
  2. Data Transportation
    Autonomous vehicles need to communicate with each other and transport data with the use of consistently high-speed internet, highlighting the need for large-scale adoption of 5G.
  3. Verifying Deep Neural Networks
    The safety of these vehicles will be dictated by their ability to distinguish between a vehicle and a person, but they currently rely on algorithms which are not yet fully understood.

Which Countries are Leading the Charge?

The 20 countries were selected for the report based on economic size, and their automation progress was ranked using four key metrics: technology and innovation, infrastructure, policy and legislation, and consumer acceptance.

The United States leads the way on technology and innovation, with 163 company headquarters, and more than 50% of cities currently preparing their streets for self-driving vehicles. The Netherlands and Singapore rank in the top three for infrastructure, legislation, and consumer acceptance. Singapore is currently testing a fleet of autonomous buses created by Volvo, which will join the existing public transit fleet in 2022.

India, Mexico, and Russia lag behind on all fronts—despite enthusiasm for self-driving cars, these countries require legislative changes and improvements in the existing quality of roads. Mexico also lacks industrial activity and clear regulations around autonomous vehicles, but close proximity to the U.S. has already garnered interest from companies like Intel for manufacturing autonomous vehicles south of the border.

How Autonomous Vehicles Impact the Economy

Once successfully adopted, autonomous vehicles will save the U.S. economy $1.3 trillion per year, which will come from a variety of sources including:

  • $563 billion: Reduction in accidents
  • $422 billion: Productivity gains
  • $158 billion: Decline in fuel costs
  • $138 billion: Fuel savings from congestion avoidance
  • $11 billion: Improved traffic flow and reduction of energy use
    • With the adoption of autonomous vehicles projected to reduce private car ownership in the U.S. to 43% by 2030, it’s disrupting many other industries in the process.

      • Insurance
        Transportation will be safer, potentially reducing the number of accidents over time. Insurance companies are already rolling out usage-based insurance policies (UBIs), which charge customers based on how many miles they drive and how safe their driving habits are.
      • Travel
        Long distance traveling in autonomous vehicles provides a painless alternative to train and air travel. The vehicles are designed for comfort, making it possible to sleep overnight easily—which could also impact the hotel industry significantly.
      • Real Estate
        An increase in effortless travel could lead to increased urban sprawl, as people prioritize the convenience of proximity to city centers less and less.
        • Defining the parameters for this emerging industry will present significant and unpredictable challenges. Once the initial barriers are eliminated and the technology matures, the world could see a new renaissance of mobility, and the disruption of dozens of other industries as a result.

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Automotive

Palladium: The Secret Weapon in Fighting Pollution

The world is in critical need of palladium. It’s a crucial metal in reducing emissions from gas-powered vehicles, and our secret weapon for cleaner air.

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Despite the growing hype around electric vehicles, conventional gas-powered vehicles are expected to be on the road well into the future.

As a result, exhaust systems will continue to be a critical tool in reducing harmful air pollution.

The Power of Palladium

Today’s infographic comes to us from North American Palladium, and it demonstrates the unique properties of the precious metal, and how it’s used in catalytic converters around the world.

In fact, palladium enables car manufacturers to meet stricter emission standards, making it a secret weapon for fighting pollution going forward.

Palladium: The Secret Weapon in Fighting Pollution

The world is in critical need of palladium today.

It’s the crucial metal in reducing harmful emissions from gas powered vehicles—as environmental standards tighten, cars are using more and more palladium, straining global supplies.

What is Palladium?

Palladium is one of six platinum group metals which share similar chemical, physical, and structural features. Palladium has many uses, but the majority of global consumption comes from the autocatalyst industry.

In 2018, total gross demand for the metal was 10,121 million ounces (Moz), of which 8,655 Moz went to autocatalysts. These were the leading regions by demand:

  • North America: 2,041 Moz
  • Europe: 1,883 Moz
  • China: 2,117 Moz
  • Japan: 859 Moz
  • Rest of the World: 1,755 Moz

Catalytic Converters: Palladium vs. Platinum

The combustion of gasoline creates three primary pollutants: hydrocarbons, nitrogen oxides, and carbon monoxide. Catalytic converters work to alter these poisonous and often dangerous chemicals into safer compounds.

In order to control emissions, countries around the world have come up with strict emissions standards that auto manufacturers must meet, but these are far from the reality of how much pollutants are emitted by drivers every day.

Since no one drives in a straight line or in perfect conditions, stricter emissions testing is coming into effect. Known as Real Driving Emissions (RDE), these tests reveal that palladium performs much better than platinum in a typical driving situation.

In addition, the revelation of the Volkswagen emission scandal (known as Dieselgate) further undermines platinum use in vehicles. As a result, diesel engines are being phased out in favor of gas-powered vehicles that use palladium.

Where does Palladium Come From?

If the world is using all this palladium, where is it coming from?

Approximately, 90% of the world’s palladium production comes as a byproduct of mining other metals, with the remaining 10% coming from primary production.

In 2018, there was a total of 6.88 million ounces of mine supply primarily coming from Russia and South Africa. Conflicts in these jurisdictions present significant risks to the global supply chain. There are few North American jurisdictions, such as Ontario and Montana, which present an opportunity for more stable primary production of palladium.

Long Road to Extinction

The current price of palladium is driven by fundamental supply and demand issues, not investor speculation. Between 2012 and 2018, an accumulated deficit of five million ounces has placed pressures on readily available supplies of above-ground palladium.

Vehicles with internal combustion engines (ICE) will continue to dominate the roads well into the future. According to Bloomberg New Energy Finance, it will not be until 2040 that ICE vehicles will dip below 50% of new car sales market, in favor of plug-in and hybrid vehicles. Stricter emissions standards will further bolster palladium demand.

The world needs stable and steady supplies of palladium today, and well into the future.

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