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.
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 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.
4. However, Tesla has now moved that target forward by two years.
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.
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 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 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.
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
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.
Last week, Elon Musk unveiled the “master plan” behind Tesla.
The Tesla Gigafactory will ultimately help to make these ambitions possible.
Animation: U.S. Electric Vehicle Sales (2010-19)
This stunning animation visualizes the last nine years of U.S. electric vehicle sales. We also look at who will lead the race in the coming years.
It’s challenging to get ahead, but it’s even harder to stay ahead.
For companies looking to create a sustainable competitive advantage in a fast-moving, capital intensive, and nascent sector like manufacturing electric vehicles, this is a simple reality that must be accounted for.
Every milestone achieved is met with the onset of new and more sophisticated competitors – and as the industry grows, the stakes grow higher and the market gets further de-risked. Then, the real 800-lb gorillas start to climb their way in, making competition even more fierce.
Visualizing U.S. EV Sales
Today’s animation uses data from InsideEVs to show almost nine years of U.S. sales in the electric vehicle market, sorted by model of car.
It paints a picture of a rapidly evolving market with many new competitors sweeping in to try and claim a stake. You can see the leads of early successes eroded away, the increasing value of scale, and consumer preferences, all rolled into one nifty animation.
The Tesla Roadster starts with a very early lead, but is soon replaced by the Nissan Leaf and Chevrolet Volt, which are the most sold models in the U.S. from 2011-2016.
Closer to the end, the Tesla Model S rises fast to eventually surpass the Leaf by the end of 2017. Finally, the scale of the rollout of the Tesla Model 3 is put into real perspective, as it quickly jumps past all other models in the span of roughly one year.
The Gorilla Search
While Tesla’s rise has been well-documented, it’s also unclear how long the company can maintain an EV leadership position in the North American market.
As carmakers double-down on EVs as their future foundations, many well-capitalized competitors are entering the fray with serious and ambitious plans to make a dent in the market.
In the previous animation, you can already see there are multiple models from BMW, Volkswagen, Honda, Fiat, Ford, Toyota, Nissan, and Chevrolet that have accumulated over 10,000 sales – and as these manufacturers continue to pour capital in the sector, they are likely posturing to try and find how to create the next mass market EV.
Of these, Volkswagen seems to be the most bullish on a global transition to EVs, and the company is expecting to have 50 fully electric models by 2025 while investing $40 billion into new EV technologies (such as batteries) along the way.
The Chinese Bigfoot?
However, the 800-lb gorilla could come from the other side of the Pacific as well.
Source: The Driven
Chinese company BYD – which is backed by Warren Buffett – is currently the largest EV manufacturer in the world, selling 250,000 EVs in 2018.
The Chinese carmaker quietly manufacturers buses in the U.S. already, and it has also announced future plans to sell its cars in the U.S. as well.
How will such an animation of cumulative U.S. EV sales look in the future? In such a rapidly evolving space, it seems it could go any which way.
How Much Oil is in an Electric Vehicle?
It is counterintuitive, but electric vehicles are not possible without oil – these petrochemicals bring down the weight of cars to make EVs possible.
How Much Oil is in an Electric Vehicle?
When most people think about oil and natural gas, the first thing that comes to mind is the gas in the tank of their car. But there is actually much more to oil’s role, than meets the eye…
Oil, along with natural gas, has hundreds of different uses in a modern vehicle through petrochemicals.
Today’s infographic comes to us from American Fuel & Petrochemicals Manufacturers, and covers why oil is a critical material in making the EV revolution possible.
It turns out the many everyday materials we rely on from synthetic rubber to plastics to lubricants all come from petrochemicals.
The use of various polymers and plastics has several advantages for manufacturers and consumers:
- Easy to Shape
- Flame Retardant
Today, plastics can make up to 50% of a vehicle’s volume but only 10% of its weight. These plastics can be as strong as steel, but light enough to save on fuel and still maintain structural integrity.
This was not always the case, as oil’s use has evolved and grown over time.
Not Your Granddaddy’s Caddy
Plastics were not always a critical material in auto manufacturing industry, but over time plastics such as polypropylene and polyurethane became indispensable in the production of cars.
Rolls Royce was one of the first car manufacturers to boast about the use of plastics in its car interior. Over time, plastics have evolved into a critical material for reducing the overall weight of vehicles, allowing for more power and conveniences.
Rolls Royce uses phenol formaldehyde resin in its car interiors
Henry Ford experiments with an “all-plastic” car
About 20 lbs. of plastics is used in the average car
Manufacturers begin using plastic for interior decorations
Headlights, bumpers, fenders and tailgates become plastic
Engineered polymers first appear in semi-structural parts of the vehicle
The average car uses over 1000 plastic parts
Electric Dreams: Petrochemicals for EV Innovation
Plastics and other materials made using petrochemicals make vehicles more efficient by reducing a vehicle’s weight, and this comes at a very reasonable cost.
For every 10% in weight reduction, the fuel economy of a car improves roughly 5% to 7%. EV’s need to achieve weight reductions because the battery packs that power them can weigh over 1000 lbs, requiring more power.
Today, plastics and polymers are used for hundreds of individual parts in an electric vehicle.
Oil and the EV Future
Oil is most known as a source of fuel, but petrochemicals also have many other useful physical properties.
In fact, petrochemicals will play a critical role in the mass adoption of electric vehicles by reducing their weight and improving their ranges and efficiency. In According to IHS Chemical, the average car will use 775 lbs of plastic by 2020.
Although it seems counterintuitive, petrochemicals derived from oil and natural gas make the major advancements by today’s EVs possible – and the continued use of petrochemicals will mean that both EVS and traditional vehicles will become even lighter, faster, and more efficient.
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