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Tesla's future rides on a massive battery plant
CNN Money ^ | 22 Feb 2014 | Chris Isidore

Posted on 02/22/2014 10:02:29 AM PST by mandaladon

So far the story of Tesla Motors has been about exciting electric luxury cars and an even higher performing stock. Next week it will reveal plans for a much less sexy innovation that is more important to the company's future than either of those things: A huge new lithium battery factory dubbed the "Gigafactory" by Tesla founder Elon Musk. The plant is the key Tesla needs in order to produce an "affordable" long-range electric car in substantial enough numbers to join the ranks of the major automakers. "It's the future of the company," said Craig Irwin, analyst with Wedbush Securities. "They need to cut the cost of the battery in half in order to make a half-million cars. This is how they are going to do it." The size of the plant will be massive. Musk predicted in November that it would have a capacity equal to all factories making lithium ion batteries around the globe. That includes lithium batteries going into Teslas as well as laptops, tablets and smart phones. Panasonic (PCRFF), currently Tesla's primary battery supplier, is likely to be a partner in the plant. Tesla (TSLA) has repeatedly said that it would already be selling more cars, and growing even faster, if it wasn't constrained by the limited supply of batteries. Tesla's goal has always been to sell a mass-market car priced in the $30,000 to $40,000 range that can travel long distances on only an electric charge. The Model S, Tesla's current car, can go more than 200 miles between charges but has a starting price of $69,000. Musk said the new plant will allow the company to meet its goal of releasing the mass-market car within three years.

(Excerpt) Read more at money.cnn.com ...


TOPICS: Extended News; News/Current Events; Technical
KEYWORDS: efv; energy; tesla
They are looking at the Southwest for the location of the factory...probably a Red state.
1 posted on 02/22/2014 10:02:29 AM PST by mandaladon
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To: mandaladon

long-range electric car and all unicorns live in utopia.


2 posted on 02/22/2014 10:06:32 AM PST by Vaduz
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To: mandaladon

So how much money is that “red state” going to give them?


3 posted on 02/22/2014 10:07:19 AM PST by cripplecreek (REMEMBER THE RIVER RAISIN!)
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To: Vaduz

Are taxpayers funding any of this (directly or indirectly)?


4 posted on 02/22/2014 10:07:33 AM PST by hal ogen (First Amendment or Reeducation Camp?)
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To: mandaladon

I’ll be amazed if the EPA allows a plant that processes massive amounts of a toxi metal anywhere under the regime. But then again, electric cars are favored by American Marxists, so it will probably be allowed.


5 posted on 02/22/2014 10:08:29 AM PST by Hardastarboard (The question of our age is whether a majority of Americans can and will vote us all into slavery.)
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To: mandaladon

Very ironic because in the 19th century during the so-called “War of The Currents” people like Edison pushed for DC power (related to batteries) and Nicola Tesla pushed for AC power (which is what basically won).


6 posted on 02/22/2014 10:09:59 AM PST by ClearCase_guy
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To: Hardastarboard

Heck, I was thinking we all should go and PROTEST the building of THIS plant.....


7 posted on 02/22/2014 10:12:47 AM PST by goodnesswins (R.I.P. Doherty, Smith, Stevens, Woods.)
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To: mandaladon

You have to wonder if the environmental costs of electric cars aren’t worse than the gasoline engine. Even if you recycle these batteries there have to be results that will eventually unnerve the enviro-wackos.


8 posted on 02/22/2014 10:14:20 AM PST by JimSEA
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To: hal ogen

Count on it in one form or another not sure the amount feds will slip to them.


9 posted on 02/22/2014 10:14:28 AM PST by Vaduz
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To: hal ogen

We’ve already paid. Just search Tesla Motors + A123 systems.

A123 systems is the company that taxpayers paid to keep open for some 2 years in Michigan despite the fact that they didn’t produce even 1 single solitary battery.

That was a double whammy for me since bit that and federal taxes paid into it.


10 posted on 02/22/2014 10:15:33 AM PST by cripplecreek (REMEMBER THE RIVER RAISIN!)
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To: cripplecreek

That being the case...the eco-dementeds should be arrested and imprisoned for financial fraud.


11 posted on 02/22/2014 10:17:43 AM PST by hal ogen (First Amendment or Reeducation Camp?)
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To: Vaduz

Until they massively upgrade the power grid, at huge expense and time, it is only a pipe dream.

Refitting and redesigning the power grid will take decades and hundreds of billions of dollars and no one has started budgeting for it or building new power plants. To the contrary they are fighting any expansion.

BTW, wind and solar will not cut it.


12 posted on 02/22/2014 10:19:18 AM PST by dhs12345
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To: hal ogen

Its a shell game. Move to one state and soak up as much money as possible. Then declare bankruptcy, sell at a bargain and reopen somewhere else.


13 posted on 02/22/2014 10:23:24 AM PST by cripplecreek (REMEMBER THE RIVER RAISIN!)
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To: dhs12345

Current thinking is solar and wind would get a huge boost from deployment of tens of millions of EVs. Everybody would charge them up during the day with solar and wind juice. At night, your car batteries would feed power into the grid.

Of course, these analyses tend to not ask the question “Why is my car dead this morning?”


14 posted on 02/22/2014 10:29:20 AM PST by ProtectOurFreedom
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To: mandaladon; null and void

Ping


15 posted on 02/22/2014 10:42:09 AM PST by Vendome (Don't take life so seriously-you won't live through it anyway-Enjoy Yourself ala Louis Prima)
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To: ProtectOurFreedom

A year or so back we had a day with planned intermittent power outages. The electric company said they were testing communications between electric cars and the grid for things like payment for electricity, alerting drivers to impending battery drain, LOJACK type services etc.

I don’t know about you but I damn sure don’t want a car keeping tabs on me.


16 posted on 02/22/2014 10:45:05 AM PST by cripplecreek (REMEMBER THE RIVER RAISIN!)
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To: hal ogen

Tesla qualified for the Obama tax rebate for electrical cars, about $9,000. But that was such a small portion of the overall Tesla price ($110,000) that it probably did more to sustain competitors than to help Tesla. IOW, Tesla probably would have been better off without the Obama administration’s interference, which, unlike GM, was never part of its business plan.


17 posted on 02/22/2014 10:49:42 AM PST by dangus
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To: hal ogen

Tesla qualified for the Obama tax rebate for electrical cars, about $9,000. But that was such a small portion of the overall Tesla price ($110,000) that it probably did more to sustain competitors than to help Tesla. IOW, Tesla probably would have been better off without the Obama administration’s interference, which, unlike GM, was never part of its business plan.


18 posted on 02/22/2014 10:49:57 AM PST by dangus
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To: cripplecreek

A123 was partners with Fisker, not Tesla.


19 posted on 02/22/2014 10:54:05 AM PST by dangus
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To: Vaduz

The long-range electric car is already a fact. Tesla already could be highly profitable with its current sales of super-high-end luxury cars. The would-be profits are being used to invest in a business plan 40 times larger, however.


20 posted on 02/22/2014 10:59:04 AM PST by dangus
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To: cripplecreek

Wait’ll every new car comes with a blackbox and THEY know everything about your whereabouts. That day isn’t far away.

Just like in the TV show “Jericho,” cars from the 60s will become VERY valuable.


21 posted on 02/22/2014 11:05:04 AM PST by ProtectOurFreedom
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To: ProtectOurFreedom

Exactly.

But these sources are transient and unpredictable. And you need a lot more power than you will get from a windmill or solar panels on your car. A car is a rather heavy thing. Especially if you want it to be safe.

You need a way to store the energy which might mean some form of hydroelectric facility. But that would be a fight from the EPA.


22 posted on 02/22/2014 11:25:32 AM PST by dhs12345
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To: mandaladon

They should be looking at manufacturing long extension cords.


23 posted on 02/22/2014 11:45:31 AM PST by depressed in 06 (America conceived in liberty, dies in slavery.)
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To: ProtectOurFreedom

When that happens, I will start using a dirt bike or moped.


24 posted on 02/22/2014 11:58:07 AM PST by 3Fingas (Sons and Daughters for Freedom and Rededication to the Principles of the U.S. Constitution)
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To: ProtectOurFreedom

When that happens, I will start using a dirt bike or moped.


25 posted on 02/22/2014 11:58:09 AM PST by 3Fingas (Sons and Daughters for Freedom and Rededication to the Principles of the U.S. Constitution)
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To: dangus

Nice try but anybody can search for themselves.


26 posted on 02/22/2014 12:15:28 PM PST by cripplecreek (REMEMBER THE RIVER RAISIN!)
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To: cripplecreek

Yes... and find a Seeking Alpha article which apparently thinks that Obama flew backwards in time six years to create Tesla. That’s how god-d@mned ignorant the authors of Seeking Alpha are.

If you look up A123 anywhere else, you’ll find that A123 was business partners with Th!nk, Fisker (two electric-car companies), General Electric, and through the United States Advanced Battery Consortium, Ford, GM and Crystler, as well as Shanghai Automotive Investment Corp. In other words, about every other electric car designer in America EXCEPT Tesla.


27 posted on 02/22/2014 2:11:11 PM PST by dangus
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To: dangus

Do you pimp the E-cat scam too? LOL


28 posted on 02/22/2014 2:22:32 PM PST by cripplecreek (REMEMBER THE RIVER RAISIN!)
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To: cripplecreek

Last I checked, there weren’t 35,000 E-Cats sold.


29 posted on 02/22/2014 3:22:24 PM PST by dangus
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To: dangus

And the E-cat doesn’t suck taxpayer money like the leeches of Tesla


30 posted on 02/22/2014 4:11:22 PM PST by cripplecreek (REMEMBER THE RIVER RAISIN!)
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To: hal ogen
Tesla Is No Success Story Tesla is only profitable thanks to politics and tax subsidies.

The company began with a loan funded through the Advanced Technology Vehicle Manufacturing program, which was signed into law by President Bush; the loan was later awarded after President Obama took office. In Tesla's press release announcing that it had paid back this low-interest loan, the company was careful to thank all of those who made it possible, including "the Department of Energy and the members of Congress and their staffs that worked hard to create the ATVM program."

Along with the federal loan, Tesla also relies on support from politicians through a complex series of federal and state subsidies. For each purchase of a new Tesla acquired for personal use, the federal government offers a $7,500 federal tax credit. In addition, various states offer additional income-tax credits, including $6,000 in Colorado and $7,500 in West Virginia.

These subsidies have become so central to Tesla's business model that it advertises them to customers as a way to cover the cost of a down payment. And for states that do not yet offer subsidies for electric cars? Tesla's website provides links to help consumers encourage state and local legislators to subsidize the purchase of such vehicles. The company's site even goes so far as to recommend consulting a tax professional.

31 posted on 02/22/2014 4:22:59 PM PST by cripplecreek (REMEMBER THE RIVER RAISIN!)
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To: Hardastarboard
But then again, electric cars are favored by American Marxists, so it will probably be allowed.

For the greater good, you know.

32 posted on 02/22/2014 4:59:38 PM PST by BfloGuy ( Even the opponents of Socialism are dominated by socialist ideas.)
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To: cripplecreek

Once more, for the willfully ignorant:

Tesla and its business plan existed before Obama

Tesla would be profitable without the e-car subsidies

The e-car subsidies did far more to finance Tesla’s competitors (like Fisker), which actually HURT Tesla’s finances.

A123 had nothing to do with Tesla

No-one has ever demonstrated cold fusion. Lithium batteries have been demonstrated.

You are the most willfully ignorant person I have ever come across.


33 posted on 02/22/2014 5:15:01 PM PST by dangus
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To: BfloGuy
For the greater good, you know.

Which makes them feel entitled to a major tax break because they're "saving the planet".

In Ann Arbor Mi they did a study of who was using the "free" charging stations and found that they were primarily 6 figure earners who could afford their own charge. (Lots of university professors) Basically it came down to 6 figure welfare leeches who felt entitled to massive tax breaks for them while squeezing out that last few bucks per day with taxpayer and tuition payer funded charging.
34 posted on 02/22/2014 5:35:18 PM PST by cripplecreek (REMEMBER THE RIVER RAISIN!)
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To: hal ogen

To those who sniff that Tesla generates a profit only because of tax subsidies: The tax subsidies come to $7,500 per vehicle. That means that even if the tax subsidies were to end, and Tesla were to have to discount its prices to make up for that (which is highly questionable, since they can’t keep up with demand), Tesla would still generate an incremental profit of more than $12,000 per vehicle.

So what’s this about Tesla being barely profitable? Tesla is resinking all of the per-vehicle profit into developing larger production capabilities and creating still newer technologies.

Could they go bankrupt? Their market capitalization is based on vehicle sales 40 times their sales volume, and 20 times their current assets. In other words, no matter how short of funds they ran, they could easily sell more stock to raise more funds. Even if doubling the amount of outstanding stock meant quartering their stock price, they would still generate five times more cash than their entire current assets.

Bottom line: The government subsidies have meant more profit per vehicle, but also higher costs and higher competition. Because of the GM bailout, for instance, Tesla had to build a new factory from scratch, rather than buy one from GM at pennies on the dollar.


35 posted on 02/22/2014 5:35:43 PM PST by dangus
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To: hal ogen

... as far as an investment goes, however, Tesla’s stock is probably inflated... but Tesla would be viable with a stock price a fraction of what it is.

... as far as environmentalism goes, in the short run, no-one should fool themselves. The reason to buy a Tesla is pure consumerism, and consumerism means f*** the environment. At $69,000, there’s no way the added resource exploitation is going to balance the fuel savings. You want to save the environment, buy a used Prius. HOWEVER, in the long run, Tesla is financing an electrical-car infrastructure which will ultimately mean far less fuel consumption. Those idiots who say, “yeah, but you still have to fuel the electrical grid” don’t get it: Teslas get a fuel efficiency equivalent of waaaayyy over 100 MPG.


36 posted on 02/22/2014 5:47:41 PM PST by dangus
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To: dangus

What long-range electric car ? not one can reach 200 miles and Tesla may be a Apple product soon the know the limits of an electric car only the rich can own one due to high maintenance coats.


37 posted on 02/23/2014 7:06:09 AM PST by Vaduz
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To: dhs12345

Pipe dream indeed electric cars didn’t pan out in 1905 they pop up as a fad every so often.


38 posted on 02/23/2014 7:08:12 AM PST by Vaduz
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To: Vaduz

>> not one can reach 200 miles and Tesla may be a Apple product soon the know the limits of an electric car only the rich can own one due to high maintenance coats. <<

I’d respond if I you could clean up the wording; I can’t tell what you are trying to say about Apple products.

Plainly, Tesla certainly has an ultra-high-end sales model for its current models, which is highly profitable. The reason they don’t report far, far higher profits is because they are pursuing a much broader, much more modest sales model for their next generation of cars by investing fantastic amounts of money. Will they ever fill the niche of NIssan Versa or Smart Fortwo? No. They may certainly have a car with a lower annual cost of ownership than current top-selling models, however, for a much nicer car.


39 posted on 02/23/2014 7:26:44 AM PST by dangus
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To: dangus

Apple may buy Tesla soon.


40 posted on 02/23/2014 7:33:50 AM PST by Vaduz
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To: Vaduz

Interesting. Apparently, many people — reasonably so — define both companies as ultimately becoming largely investors in lithium batteries. The problem is that I’m not sure if Tesla sees lithium as its long-range future, and that Telsa’s stock price already anticipates Tesla kicking GM’s ass by next decade.


41 posted on 02/23/2014 8:07:31 AM PST by dangus
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To: dangus

Tesla looks like a slam dunk short to me...expect it’s never safe to bet against the regime.


42 posted on 02/23/2014 8:13:11 AM PST by nascarnation (I'm hiring Jack Palladino to investigate Baraq's golf scores.)
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To: nascarnation

Only the fabulously wealthy should ever short. And even if you’re dead-on correct, it can be a horrible idea: if a stock sells for double what its worth, even if it falls to what it’s worth, you can still make absolutely nothing if ten years’ inflation have passed. Tesla has a great product, but its valuation presumes an unbelievable 800,000 cars per year, some say. Overvalued? Quite possibly. Short it? You’d have to be very rich or very foolish.


43 posted on 02/23/2014 5:40:42 PM PST by dangus
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To: dangus

Tesla kicking GM’s ass by next decade.
That will never happen Tesla has low sales due to cost of their car they only have one product they may fade to black by the big three and Japan cars.


44 posted on 02/24/2014 7:31:59 AM PST by Vaduz
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To: Vaduz

Right. That one car makes about a $20,000 per car. Rather than report huge profits, however, they are reinvesting the money into developing an entire line of mid-line vehicles.


45 posted on 02/24/2014 8:21:48 AM PST by dangus
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To: dangus

They will sell out Apple first the cost id to high for them to do so.


46 posted on 02/24/2014 8:25:00 AM PST by Vaduz
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To: Vaduz

IF Apple does buy them, Apple’s reason in doing so would be because Apple decided its future was as a manufacturer of Lithium batteries, and that Teslas were the future primary consumer of Lithium batteries. There’s no appeal to Apple unless Apple is confident that there will be hundreds of thousands of Teslas manufactured every year.

At a market cap of 25 billion, the notion that the cost is too high for Tesla to build its needed factories is just plain silly.


47 posted on 02/24/2014 9:23:40 AM PST by dangus
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To: dangus

The cost of the car will prevent thousands of Teslas manufactured every year battery tech will never reach a goal of being useful for long term use.


48 posted on 02/26/2014 7:56:47 AM PST by Vaduz
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To: Vaduz

And if you looked at 40” Plasma TV screens a decade ago, you’d say “the average family can’t afford a 40” TV.” After all, they cost thousands of dollars. Now they cost a couple hundred.


49 posted on 02/26/2014 8:04:31 AM PST by dangus
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