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Power Transportation

Why Tesla Really Needs a Gigafactory 193

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."
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Why Tesla Really Needs a Gigafactory

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  • by Travis Mansbridge ( 830557 ) on Sunday April 20, 2014 @11:08AM (#46799391)
    Expanding to related industries to lower internal costs is known as vertical integration and has been making industrialists rich for over a century.
  • by Cassini2 ( 956052 ) on Sunday April 20, 2014 @11:21AM (#46799459)

    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.

  • by zwede ( 1478355 ) on Sunday April 20, 2014 @11:59AM (#46799641)

    "standard" usage will reach about 2/4 years before the degrade in mileage and performance warrants a replacement.

    Not sure where you get your information from, but so far things are looking much better than that. The Tesla Roadster had a slightly older battery technology and they have about 80% of the battery capacity left after 100,000 miles. Still very usable. A couple of Model S have hit 70,000 miles and have ~95% of capacity left, so the Model S battery is better. The 8 year warranty is a fairly safe bet by Tesla.

  • by ShanghaiBill ( 739463 ) on Sunday April 20, 2014 @12:46PM (#46799911)

    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.

  • Re:volume (Score:4, Insightful)

    by immaterial ( 1520413 ) on Sunday April 20, 2014 @01:13PM (#46800067)

    How are they going to make them cheaper? If there was a way of doing so, wouldn't somebody be doing it already?

    No, because the last guy that thought of some efficiency or tech improvements didn't bother to implement them - after all, surely somebody else did it already...

This restaurant was advertising breakfast any time. So I ordered french toast in the renaissance. - Steven Wright, comedian