Energy

Inside Tesla’s $5 Billion Gigafactory

Published

9 years ago

July 22, 2014

Jeff Desjardins

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.

Where are Clean Energy Technologies Manufactured?

As the market for low-emission solutions expands, China dominates the production of clean energy technologies and their components.

Published

2 days ago

March 28, 2023

Selin Oğuz

Visualizing Where Clean Energy Technologies Are Manufactured

This was originally posted on Elements. Sign up to the free mailing list to get beautiful visualizations on natural resource megatrends in your email every week.

When looking at where clean energy technologies and their components are made, one thing is very clear: China dominates the industry.

The country, along with the rest of the Asia Pacific region, accounts for approximately 75% of global manufacturing capacity across seven clean energy technologies.

Based on the IEA’s 2023 Energy Technology Perspectives report, the visualization above breaks down global manufacturing capacity by region for mass-manufactured clean energy technologies, including onshore and offshore wind, solar photovoltaic (PV) systems, electric vehicles (EVs), fuel cell trucks, heat pumps, and electrolyzers.

The State of Global Manufacturing Capacity

Manufacturing capacity refers to the maximum amount of goods or products a facility can produce within a specific period. It is determined by several factors, including:

The size of the manufacturing facility
The number of machines or production lines available
The skill level of the workforce
The availability of raw materials

According to the IEA, the global manufacturing capacity for clean energy technologies may periodically exceed short-term production needs. Currently, this is true especially for EV batteries, fuel cell trucks, and electrolyzers. For example, while only 900 fuel cell trucks were sold globally in 2021, the aggregate self-reported capacity by manufacturers was 14,000 trucks.

With that said, there still needs to be a significant increase in manufacturing capacity in the coming decades if demand aligns with the IEA’s 2050 net-zero emissions scenario. Such developments require investments in new equipment and technology, developing the clean energy workforce, access to raw and refined materials, and optimizing production processes to improve efficiency.

What Gives China the Advantage?

Of the above clean energy technologies and their components, China averages 65% of global manufacturing capacity. For certain components, like solar PV wafers, this percentage is as high as 96%.

Here’s a breakdown of China’s manufacturing capacity per clean energy technology.

Technology	China’s share of global manufacturing capacity, 2021
Wind (Offshore)	70%
Wind (Onshore)	59%
Solar PV Systems	85%
Electric Vehicles	71%
Fuel Cell Trucks	47%
Heat Pumps	39%
Electrolyzers	41%

So, what gives China this advantage in the clean energy technology sector? According to the IEA report, the answer lies in a combination of factors:

Low manufacturing costs
A dominance in clean energy metal processing, namely cobalt, lithium, and rare earth metals
Sustained policy support and investment

The mixture of these factors has allowed China to capture a significant share of the global market for clean technologies while driving down the cost of clean energy worldwide.

As the market for low-emission solutions expands, China’s dominance in the sector will likely continue in the coming years and have notable implications for the global energy and emission landscape.