Tag Archives: electric vehicles

Tesla Selects Nevada for Gigafactory Battery Plant – But Can They Deliver?

The worst-kept secret in years … Tesla selects a Nevada site near Reno to build their battery factory.

The key questions that the battery and car analysts are raising among all of the excitement, include:

1. Will the factory get the cost of the car batteries low enough so that Tesla can actually price its Model III near the $40,000 range that is being promised. Many analysts are saying no.

Rendering of the Tesla Gigafactory to be built near Reno, Nevada
Rendering of the Tesla Gigafactory to be built near Reno, Nevada

2. Will the plant be built and operating by 2017 and in time to launch the Model III that year?

3. And finally, Tesla is saying by 2020, the factory will be able to produce enough batteries for production of 500,000 Teslas. To achieve this goal, and assuming the company means EVs with their branding, as opposed to also including platforms made for other brands, in 2020 they would likely have to sell:

– 300,000 Model III
– 100,000 Model X
– 100,000 Model S

While not impossible, especially with the growth opportunity in China, by comparison BMW sold 294,000 3 Series sedans in all of 2012. So the Model III, which Elon Musk has said is targeting the 3 Series and Audi A4, would have to match that volume.

What do you think, can they reach this level of sales in roughly 6 more years?

Understanding Elon Musk and Tesla

I’m a HUGE Tesla fan and Elon Musk fan boy. Tesla is simply one of the most important companies of our lifetime. The Model S is an amazing and important car, but when Tesla launches the Model III in about 2017 – it will probably be looked at as the most pivotal vehicle in the last 100 years.

Elon Musk’s vision is not really about building a great car company, but rather being the company that is a change agent and is a key catalyst for getting consumers and the other auto companies to embrace electric vehicles. Along the way, Tesla is becoming a great auto company that is building not just good EVs, but some of the best cars ever, period.

Tesla Motors logo
Tesla Motors logo: Source Tesla Google+ page

And the company is changing aspects of how cars are manufactured, sold and serviced. And then think about their Supercharger charging stations, the Gigafactory battery plant that is coming in a few years and the amount of robots used to build their cars – right here in America, in the high-cost-of-living Bay Area.

A lot of people simply don’t understand Elon and Tesla. They are focused on whether Tesla ismaking a profit? On how many cars they sold in the most recent quarter? This type of myopic thinking simply reveals that a lot of people still simply don’t comprehend what Elon and Tesla are undertaking. Tesla is a bit like Amazon in that Amazon is still losing money, but they are becoming world dominating – that is their larger goal. Making a profit can come later.

Tesla is also not looking to become a dominant auto company or even necessarily the largest manufacturer of EVs long term. The ultimate measure of Tesla’s success will be how much of a force their success was as a catalyst in the transition of GM, Ford, Chrysler, BMW, Mercedes and Toyota, etc away from ICE-powered cars to electric?

I’m betting that Tesla and Elon will achieve their vision and goal – but unfortunately not for many, many years. The first major inflection point for EVs will not come until after the Model III is launched and EV sales likely won’t explode until around 2025.