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Why Tesla Really Needs a Gigafactory
Hodejo1 (1252120) writes "Tesla has already put over 25,000 cars on the road with more to come and, presumably, most will still be running well past the 8-year battery warranty. What would happen if it is time to replace the battery pack on an old Model S or X and the cost is $25K? Simple, it would destroy the resale value of said cars, which would negatively affect the lease value of new Tesla automobiles. That's a big part of the real reason why Tesla is building its own battery factory. They not only need to ensure enough supply for new cars, but they have to dramatically bring down the price of the replacement batteries low enough so owners of otherwise perfectly running old Teslas don't just junk them. The Tesla Roadster was not a mass produced vehicle, so the cost of replacing its battery is $40K. The economies of scale of a gigafactory alone will drop battery costs dramatically. Heavy research could drop it further over the next decade or so."
Expanding to related industries to lower internal costs is known as vertical integration and has been making industrialists rich for over a century.
Dear Tesla, Do we really need another unnecessary buzzword? Does 'gigafactory' mean 10^9 (or even 2^30) individual factories? Is that what you mean by economies of scale? If so then that's pretty cool and you can have your new word. Or do you just mean a really big factory? Because if so then making up a new word to make it sound cool is just lame, don't do it. That is all.
I would take a guess that they will make deals with other companies to sell batteries, hell tesla could in theory sell the car side of things to someone and simply focus on the batteries. I dont see them giving up on the cars, but a shif tin focus on batteries might be best for the industry on a whole
have you seen my sig? there are many others like it but none that are the same
An electric car is pretty much a write off the moment you drive one off the lot.
I suggest you try searching for used Model S prices, before just offering your reasoned-out guess as fact. Year-old vehicles are going for incredibly close to retail. So much so that it doesn't make sense to sell back to Tesla at their Best Resale Value Guarantee, which assures that the depreciation is going to be less than equivalent BMW, Audi, Mercedes, Lexus or Jaguar vehicles.
Warning: Opinions known to be heavily biased.
GM and the other car makers do not make money on cars. These stats predate the collapse, but GM wasn't make any money manufacturing cars. GM was making money on financing. As such, GM didn't go broke until the banking crisis hit. Similarly, the auto dealers don't make money selling cars. They make money in add-ons and services (including repairs.) For instance, many dealers charge $200 dollars to transfer your ownership, over and above the charges at the DMV. These extra charges add up. I'm pretty sure the repair parts operation at a modern OEM makes far more than the original cars.
To cut down costs of replacing those batteries under warranty.
As long as the car isnt stored in a garage for weekend usage. "standard" usage will reach about 2/4 years before the degrade in mileage and performance warrants a replacement.
As a bonus, cut costs to customers outside of those warranties.
This is just Tesla's way of saving some money, 8 years life expectancy on a battery is high risk and they know it.
Their factory will only "drop battery costs dramatically" if it runs at full capacity. Its capacity is about 500,000 cars per year, while Telsa has only sold 25,000 cars in total.
I'm in the market for a Tesla. If it takes D batteries, I'm all set. I can get those at Costco for cheap.
If Slashdot were chemistry it would look like this:Cadaverine
Everyone I know gave me tons of shit about leasing a new car. I still think a lease was the right decision.
Others may disagree, but in my opinion until battery prices come down (or the technology has a mega-improvement), electric cars are more of a service than an asset.
My Leaf is amazing. It's like driving a spaceship ... completely silent, smooth as silk, no transmission, acceleration like there's a rocket strapped to your ass ... damn near zero maintenance, and it costs about 1/10th per-mile to drive as opposed to my gas-guzzling "Canyonero" SUV.
IN FACT, the amount of money I USED to spend in a month, just buying gas for my old car, is $80 less than the monthly lease payment on the Leaf (and of course, I knew this going in, which is why I did it).
The battery is by far the most expensive single part of the car. In fact, when you look at it, you're really sort of buying a very expensive battery with some car-shaped accessories. The fact that the battery WILL fail as a matter of scientific certainty, and that we can even know more or less exactly when that will happen, makes me not want to own one of these.
With gas cars, you buy them doing calculations about repair cost and resale value that simply do not apply to the situation with electric cars. It's damn unlikely (unless I get in a wreck) that ANY repairs will ever be needed on my Leaf other than the big one ... the battery will eventually go, and at that point I might as well buy a new car.
Which is why leasing electric cars is the way to go, until the battery technology has a massive improvement, or the cost comes way down ... or some car company figures this out and makes interchangeable batteries with a leasing program for the battery. I'll happily own the car if I don't have to own the battery too!
Your savings will amount to the supplier's profit margin; effectively you're cutting out the middle-man by becoming the middle-man.
On the other hand, you could lose an amount approximately equal to the value of actually knowing what you're doing.
There's a reason most bakers don't grow their own wheat and mill their own flour.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Your savings will amount to the supplier's profit margin
You also avoid transaction costs, and guarantee availability.
There's a reason most bakers don't grow their own wheat and mill their own flour.
Wheat and flour and widely available commodities. Car batteries are not (yet) commodities, and are often sole sourced. If all the wheat in the world was grown by a single giant ag-corp, then it might make sense for a baker to grown his own.
In five years or so, when the owners of the first generation of hybrids face that battery upgrade, they might start selling quite cheaply.
Huh? The first generation of hybrids were the original Priuses, which are 17 years old. And user reports are that many of them are still running on original batteries. Replacement if needed is of the order of $2000.
I'm not entirely convinced "economy of scale" even applies much to Lithium Ion batteries. Their cost these days is largely related to mining and processing the materials that go into them.
Two things. One is that things are always cheaper the more you buy. So those mined materials come cheaper if you have a big manufacturing facility.
Second is that actually most of the raw materials for the batteries will come from recycling old batteries. At the moment Tesla only does a minimal reprocessing themselves, then send old batteries off to 3rd parties to recycle. And those materials don;t come back.
The new factory will recycle as much as possible of the batteries into new batteries. Of the order of 90%.
Lithium mining is not an ecological disaster. Lithium is mined the same way salt (any many other household chemicals such as boron, sodium carbonate, etc.) is "mined" from salt water. Elemental lithium does not exist in nature, it exists primarily as lithium-chloride dissolved in water that leeched the lithium-chloride from rocks containing that salt. Lithium mining is a process of finding water with lithium chloride, pumping it in to a retention pond, and letting the sun evaporate the water.
Lithium *can* be mined by going after the rocks that contain the lithium-chloride, pulverizing them, then dissolving and extracting the lithium, but that's not economically feasible. Lithium is produced this way, but only as a by-product from hard rock operations that are going after other minerals.
"The zero to sixty time is 9.9 seconds, making it one of the worst accelerating cars sold today."
Only test car drivers and street racers do 0-60. I also own (lease) a Leaf and everything the poster says is true. Its a great car.
30 minutes? After driving for a couple of hours, I'm ready to take a 30 minute break and stretch my legs...
Hydrogen? Seriously? 45 years ago, when I was little, they were saying Hydrogen was only 30 years away, and would roll out demo cars to prove it. I think they just said the same thing last week.
I used to think the same thing, until I actually looked at the engineering realities regarding hydrogen. It's the lightest and smallest element on the Periodic Table, so it will migrate through steel, making it brittle as it goes. The only way to make hydrogen in the industrial quantities needed is with steam reforming of petroleum based hydrocarbons (check Wikipedia if you don't believe me). Then there is the energy density and storage nightmare of hydrogen which isn't even nearly as good as current gen car batteries.
And that is just to replace the current fuel in an internal combustion engine (not so efficient) with a lower density fuel (even worse efficiency). Now a fuel cell, where the fuel is converted directly into electricity is promising, except that to produce the amount of power needed to drive a vehicle would require an oxidation rate right up there with a controlled explosion trying to go uncontrolled.
And you still haven't gotten away from using petroleum, or the wars,corruption and crime involved in dealing with it. So, hydrogen isn't really looking too good now, is it?
I would think that just changing the power generation method for a hybrid from an IC engine to a micro-turbine generator, with it's higher efficiency, flex fuel capability, fewer and more reliable parts, would provide the fast recharge capability that you say you want. In fact, some companies are starting to do this already. Neil Young's LincVolt was such a conversion, by H Line Conversions in Wichita, KS.
But I think that, except for niche applications, the end of life for the internal combustion engine is in sight. It has to be over-sized and over-built for performance use, and can't compare (favorably) to microturbines for power generation. They are expensive, complicated, dirty, and require an expensive and violently fought over fuel.
When you want something built, come see me. If you want correct grammar and spelling, get a F*ing liberal arts student.
As soon as I posted I figured somebody would bring that up. I'm sure there are photographers out there that apply home-made collodion to glass plates themselves and people who raise their own sheep to make jerseys from.
Relevance to the discussion, and to anyone other than hipsters? Zero.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Hydrogen's fine. To stop it leaking and floating off you just need to attach it to some carbon. Chains of 8 atoms are good, give or take a few.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Elon almost lost everything on Tesla. He leveraged everything and was saved at the last minute by Toyota and Daimler. It was the same with Space X. They were one launch away from failure. Elon sank everything he had into both companies.
This post is encrypted twice with ROT-13. Documenting or attempting to crack this encryption is illegal.
That's such a scary thought, but probably not far from being reality.
Get a grip. Wheat is grown commercially in more than 80 countries, by nearly 100 million farmers. That is about as far from being a monopoly as is possible.