Does Tesla Really Need a $5 Billion Battery?

Tesla Chief Executive Elon Musk is scouring the Southwest as he prepares to break ground on a giant electric-car battery factory. Mike Ramsey discuses the so-called Tesla gigafactory on MoneyBeat. Photo: Jason Henry for The Wall Street Journal.

Subscribe to the WSJ channel here:

Visit the WSJ channel for more video:
More from the Wall Street Journal:

Follow WSJ on Facebook:

More from the Wall Street Journal:

[FPVREVIEWS]

No, Tesla doesn't need a 5 Billion dollar battery,    The WORLD DOES!!!

[zoonibubba]

The world needs people like Elon Musk, no so much WSJ.

[AtomFlipper]

People can't do something themselves,
They want to tell you that you can't do it.
People can't understand the complexity of someones else's decision,
so they call it stupid or dumb and say it won't work...
Elon Musk is brilliant and i have no doubt he will change the world for the better!

[TexasLaxPlayer]

You excluded the word factory from your video title? Anything you say from here is faulty.

[DanM]

Musk is a rare thing nowadays called a 'dreamer', ever since our world was taken over by fucking bean counters we've lost a lot of ground on advancement because it's "simply not worth the money".  

[Jbroglydecap]

WSJ".Does Tesla Really Need a $5 Billion Battery?"
TaxPayer:" Does Wallstreet need a 1.5 trillion dollar bailout?"
Just saying

[nlo]

This Ramsey fellow shows the typical narrow-mindedness of a tabloid-press reporter. Batteries are for universal storage of power, not just cars. Batteries will enable excess renewable energy to be stored and used over night, reducing the amount of fossil-fuel burned and the pollution that goes with it. Sadly, there will always be people too short-sighted to understand; what they do not comprehend, they publicly ridicule.

[marcelopacheco]

This article ignores a few "fun" facts:
1 - Tesla production today is 100% constrained by Li Ion cell availability. Tesla can't afford not to build the Giga Factory. Tesla is doing no paid media ads. All indications is Tesla could double production in a few months if Li Ion availability were there, before any additional demand via paid advertising.
2 - He will build the factory, but I doubt he will tool it 100% upfront, there will be stages, his highest priority is getting the Giga Factory to about 1/4 of full output, which Tesla alone could consume with 2015 production forecasts (again Li Ion availability constrained). It is likely that by the time the Giga Factory reaches initial production Tesla will be consuming around 50% of its maximum production.

[GaryTruesdale]

In the same conversation these guys start out stating that the plant is too big, and wrap things us by stating that the plant is too small.  Wall Street Journal doesn't have a clue.

[izaccy]

Elon talks about how to have a competitive edge by saying bring everything down to its fundementals and build it from the ground up, he would never undertake on this massive project if he didnt have a template for how to build the batteries cheaper and in mass scale and thats what he is gonna do.
No smart businessman engages in a 5 Billion project without not having the template and the costs calculated and the targets he have to meet.

[atmark]

very smart people with a big success makes them crazy.
remember Tesla?

[samedgaribovic]

Wish we had more people in world like Elon Musk. Visionary fighting against corrupted system and actually winning.

[UnumsedLeonem]

Some people are pissing in their pants at the thought of Tesla's slated domination of the market. You go, Tesla!

[babybirdhome]

It's interesting to watch this a few months later after he's talked more about what exactly the gigafactory is for. He's slated 50 gWh per year of production capacity for his own cars and automotive use (you think every automaker will want to build their own to produce their cars? They're old enough not to re-invent the wheel!), with another 35 gWh dedicated to industrial use, such as the solar backup, grid offset, and grid storage to make renewables more easily integrated into the grid. That means selling batteries to the utilities for energy storage-- and that's going to be huge once they start to see what the return on investment will be on it.

JB Straubel, Tesla's CTO, and the guy who is largely responsible for their battery technology and the Superchargers etc. recently was the keynote speaker at an industry conference where he was talking about how that excess capacity will help at the grid level.

One of his Power Point slides showed a graph from Tesla's highest demand Supercharger stations in the U.S., with their power demand over a typical 24 hour period. When you have 8 cars each with an 85 kWh battery pack plugging in and charging at 135 kW each, that's a massive demand on the grid. And it's very peaky demand, because only the first half or so of the battery charges at that rate for about 20 minutes, and then the demand gradually drops down to a rate of about 10-20 kW. So what Tesla does with their Supercharger stations is include 400 kWh of battery backup right there onsite, which reduces the grid demand to something easily manageable and not at all harmful to or hard to deal with for the generating plants. This is also how they're able to charge Teslas for free for life, as well as how they're able to power the plants using renewable energy like wind and solar (sometimes onsite, other times offsite through offsetting the demand by just powering the grid itself).

Those same Supercharger stations are all built right at the factory, and are prepackaged onto a relatively small shipping palette-sized unit, much like how Google's server farms are built into shipping containers and shipped pre-assembled and configured for a turnkey startup at a co-location facility. They don't HAVE to be used as Superchargers either. In fact, the Tesla factory currently uses a set of 5 of these right outside the factory to supply 10% of their daytime operating energy demands, with future plans to expand that to closer to 30-50% of their energy demand. This will allow their factory to operate during the day during peak energy demand using energy they bought and paid off-peak rates for, which also offsets grid demand during peak hours making renewables even easier still for the utilities to implement.

They're not stupid our insane with their plans for this gigafactory. They may actually be one of the only *sane* group of people out there talking about it. It'll be an interesting future if they can manage to keep the predators, sharks, and wolves who want to eat them alive at bay long enough to get it up and running.

And for those who point out the limited lifespan of these batteries today, that's also a part of their long term plan. They expect these batteries to last the commercial and industrial customers about 10 years. The reason for that is that within 10 years, they foresee the technology to have evolved enough to either make replacement costs significantly lower, or just too inefficient compared to newer technologies. Straubel said that they're not interested in selling their customers a product that's designed to last them 50 years when in 10 years it won't be cost effective to keep using it anymore anyway. There's no point in paying for a battery you're not even going to be able to use.

[crustydownunder]

First this jerk says there would be no real benefit to having a huge battery factory... He says it would sit unused... Then he says Tesla would would easily use all the batteries from it's huge factory if they sold more cars? Elon is a visionary, Tesla will shortly out sell the big car manufacturers, guaranteed. He's already selling battery storage for off-grid solar homes. Some people have no idea!

I'd by a Tesla today, if I could afford to. With the new cheaper model soon to hit the market, I will definitely be getting one. I currently have a 400 hp Ford and cannot afford to run it. The offer of free fuel for life? What idiot would pass that up?

[tomrobertson]

iron age argument. no aknowlegment of vision of the future.

[Ocodo]

"It's crazy because it is big" *facepalm*

[TheMedivalBlast]

5 billion battery? Yes, this could power a spaceship two-ways to mars!

[eccentricity]

of the 100 million cars made per year.. to make only half a million electric cars would require every single lithium ion battery currently produced in the world, not leaving any left for cell phones or laptops or anything. so to question whether the gigafactory is necessary is incredibly stupid. we'll need dozens of them..

[brightmal]

What the currant battery manufacturers have to say about cutting costs is on par with what the established rocket manufacturers on the same subject. Getting the price per kilo down, even to low earth orbit, just couldn't be done, according to a lot of really smart, motivated people. Elon Musk has demonstrated a profound understanding of producing high quality products for incredibly low prices.