Tesla chooses Nevada for its Gigafactory

Two comments.

Tesla has highest brand loyalty of any car manufacturer, an Apple like reaction so they must be doing something right...maybe treating their customers who have problems the way we wish all manufacturers would.

Nevada offered $1.3 billion in incentives.

 

swept that chump change right off the casino floors.

 

or harry reeds slush fund...

 

I don't have a reasonable way to actually calculate the total benefit to the NV economy from the GigaFactory (and the media analysis parroted from the politicians is full of Sh1t), but consider this:

Let's say Tesla keeps it's promise and hires 6,500 workers at an average of $25 an hour. That is $50k a year. Over twenty years the workers will have paid off the 1.3B subsidy by contributing $10k a year to Tesla, so net the factory is likely bringing to NV at a minimum 6,500 jobs that pay $40k a year. And if the GigaFactory acts as a nidus for other industry to come to the area, the cost NV paid will be viewed as money very well spent.

Musk could have simply paid $40k a year to workers, but this way NV is a partner very interested in the success of his venture.

 

i hope they don't need any water.

 

I wonder how much of the incentives are just toning down the predatory taxing and regulatory practices modern governments like to hammer industry with. (There are reasonable taxing and regulatory practices. I'm not talking about those.)

 

I read no income tax for 10 years, and then reduced taxes for another ten. I don't know if that was part of the 1.3B.

 

No water worries for Tesla at Reno industrial park
Reno doesn't have water problems. The Tesla NUMMI plant in Fremont california is in a place where droughts happen.

Nevada already had relatively low taxes and low red tape, so these are real incentives. It happens over a long number of years, though so the present value is lower. Tesla stock was up on the news, partially because the incentives are higher than expected. There definitely was a bidding war. Federal corporate taxes are very high, but tesla has years of paper losses, so they won't pay federal income tax for awhile. Maybe we will have tax reform by then.

 

Lux Research Predicts +50% Overproduction For Gigafactory’s Li-ion

 

The analysis might be assuming the plant will running at full production. There is nothing forcing Tesla to do this, and not build to demand. It is probably cheaper to build one huge building now than additions onto a smaller one.

 

I would put more stock in the Tesla planning for the future than the naysayers predictions of the future. Given the past disconnect between what Tesla has accomplished vs. the failure(s) predicted, this just continues the same mismatch.

 

An auto parts factory typically gets built for 2 shifts, so if tesla designs the factory for 500,000 battery packs for 2 shifts then it is properly sized for 1 shift in the lux predicted 240,000 packs/year. Since the bulk of the costs are in material, this would definitely drop cost per but would need to absorb more of the capital cost. Say government puts up $1.3 and Tesla and partners put up $4B and we pay for that over 10 years of production, A pack will need to absorb $1666 instead of $800, or be $866 more, maybe make a tesla model 3 cost $1000 more to a customer. These will need less energy to produce so some of the surplus solar can be sold to the grid reducing it a little, but even lux's numbers make the gigafactory make sense to tesla. 3000 instead of 6000 jobs (1 shift instead of 2) may make it a worse deal for nevada and panasonic.

 

Looks like a future source for Toyota as well

 

The world is larger than just Nevada. I'm curious about global production prospects?

For example, China has been pretty aggressive about growing their manufacturing capabilities. To see a large factory like this going up (or announced,) has got to seem like a competitive challenge to their own economic policies. But China is not alone in pursuing manufacturing growth.

Bob Wilson

 

Mustang ranch is a prostitution business. I think it's owned by the same guy who runs the Bunny Ranch..... now was that really so difficult to say? (I don't understand the need for dodging direct questions & prevaricating answers.) People have sex. The ones blessed with outstanding genes (beauty) sell it as a service. That's life.

According to a Forbes' reporter, they believe Nevada wasted a billion dollars of its citizens' dollars...... Tesla had already started building the factory, so the decision was already made (it's close to where the cars are built, just a short trip on I-80). Nevada did not have to give the corporation anything & they'd still get the business.

 

Easy to say.
Do you think the NV legislature will call Musk's 'bluff' ?

 

My bet would be if tesla gets to 75% capacity and rapid growth with this factory, they will build the next one in china. BYD and Panasonic have Chinese factories, but you build battery factories where you build the cars. If Toyota finally starts building the prius in america, I would expect it to have lithium batteries from this factory, as panasonic is currently its supplier and it will be panasonics north american cell line. That will reduce fixed costs, and its a tiny part of its capacity.

 

large reserves of lithium in the salton sea area of california. 200 miles from las vegas


Lithium, the Salton Sea and a startup that’s trying to change the game — Tech News and Analysis

 

I'm starting to see a vision for Tesla, which doesn't necessarily revolve around Tesla cars. A factory and rollout like this is more the enabling of a much larger change in the industry. Musk indicated as much in June, when he took down the Tesla patents, and claimed they were now Open Source. I think his reward will be the battery plant, and the spread of EV's.

I cannot see the logic in where Toyota appears to be headed, although they may have provided some head fakes along the way in their hydrogen-powered statements.

 

Read Musk's Seekret Master Plan

sshhhhhh