Secret Tesla Super Battery Factory

The latest issue of the famous American financial magazine Barron's Weekly published an article signed by Bill Alpert, said Elon Musk, CEO of American electric car manufacturer TeslaMotors. The company's plan to build a Gigafactory super lithium battery factory may be very good. But there are also potential huge pitfalls. For example, once the market demand is lower than expected, this super factory will face the problem of serious shortage of production equipment. The promise of Musk to reduce the production cost of lithium batteries for electric vehicles has become empty talk.

Tesla has become a focus of attention in the three major markets of the automotive, electronics and stock markets. Tesla CEO Allen & Dot; Musk announced last month that the company plans to build the world's largest lithium battery factory, and then Tesla's share price also rose to a high of $ 265 per share.

Although Tesla's current share price has fallen by nearly 30% compared to the high share price at the time, its market value is still more than 30 billion US dollars (including the issue of stock options and convertible bonds). Barron's has published a cover article questioning whether the drop in battery cost is enough to make Tesla's price drop below $35,000, as the company's high-end luxury model, the ModelS, has been selling for as much as $70,000.

There are preconditions for fulfilling promises

Tesla not only strongly attacked the skeptics in the stock market, but also made the latter stunned in terms of car sales. In 2013, the Paolo Alto, Calif.-based car company sold 22,500 ModelS electric vehicles worth more than $2 billion, surpassing sales of the Audi and Porsche single models in the North American market at similar prices over the same period amount. When Musk said that he would reduce the battery cost of electric vehicles by 30% by building a new Gigafactory super lithium battery factory, Tesla once again became the focus of the entire market. Currently, four state governments in the United States are actively convincing Tesla to build the Gigafactory in the state. The lithium battery capacity of this plant in 2020 is expected to exceed the current capacity of all lithium battery plants in the world.

Can Tesla's Gigafactory lithium battery factory really reduce the cost of lithium batteries? Insiders in the battery industry believe that such a battery factory may fulfill the promises made by Musk, but an important premise is that Tesla must sell 500,000 electric cars a year, because only then can the battery factory be digested normally capacity. Tesla's high share price seems to indicate that the company sells 500,000 electric cars a year. The global sales of electric vehicles are also expected to achieve substantial growth in the next few years, with global sales of 100,000 units last year. When Tesla launches the low-cost GenIII electric car in the next three to four years, competitors including German BMW will also launch electric vehicle products using lithium batteries produced by Samsung SDI and LGChem.

Fortunately, investors don't have to wait until 2020 to invest in Tesla. In the coming months, we will know if Tesla can find the right partner for its $4 billion to $5 billion Gigafactory project. In fact, at the press conference held by Tesla Battery supplier Japan Matsushita on Thursday, the issue of the Gigafactory factory has become the focus of the conference. In order to meet Tesla's growing battery demand, Panasonic is expanding its battery capacity in Japan, while at the same time divesting some of its consumer products business, but the goal of the Japanese electronics industry giant is only to turn around. Panasonic told Barron's weekly that the company has not yet decided whether to invest in the Gigafactory project.

Dramatically reduce the cost of lithium batteries

Wall Street and other competitors in the automotive industry will closely monitor Tesla's ModelS electric car sales this year and the company's projected cross-border ModelX sales momentum next year. Tesla is testing several new markets in Europe and Asia and expects the company to sell more than 35,000 electric vehicles this year. Last year, the North American market digested nearly 19,000 ModelS cars. According to data collected by AutoOutlook, a market research firm based in Malvern, Pennsylvania, in the second half of last year, the monthly sales of Tesla ModelS sedan in major markets such as California were only able to maintain the same year-on-year.

In late February of this year, Tesla's share price soared from $217 per share to $265 per share. Shortly thereafter, analysts at the famous US investment bank Morgan Stanley helped Tesla sell $2 billion worth of convertible bonds, when the company's share price was $252 per share.

Roland & dot; Roland Berger Consultant's electric vehicle specialist in Stuttgart, Germany, Wolfgang & dot; Wolfgang Bernhart believes that according to the lithium battery production agreement signed by Tesla and Panasonic, the latter is special The lithium battery produced by Sla is priced at US$185 per kWh and can meet the needs of lithium batteries for an annual output of 50,000 electric vehicles. Technological advances and the economies of scale of Gigafactory have the potential to reduce the cost per kWh of a battery pack to $130.

Other industry insiders believe that if the cost of battery assembly and electronic components is added, the cost per kWh of the Tesla lithium battery pack will increase by $45 to $175. For Tesla's standard 60 kWh lithium battery pack, the lithium battery pack produced by the Gigafactory plant is about $10,000, while the existing factory produces the same lithium battery pack at $16,000.

Market demand becomes a worry

Prabhaker Patil is the battery factory operator of LGChem in Troy, Michigan, USA, where LGChem manufactures lithium-ion battery products for electric vehicles for GM, Ford and other automakers. Patil said that other competitors can also produce a lithium battery pack costing $10,000.

A spokesperson for BMW Motors said that the company's lithium battery provider Samsung SDI will also drive down production costs. Due to insufficient utilization of production equipment in their respective lithium battery factories, LG and Samsung have long suffered losses or maintained extremely low profit margins in this business. Therefore, if Musk can't complete the goal of selling 50,000 cars a year, even the Gigafactory, which was built for $5 billion, will face a similar low-margin dilemma.

Menahem Anderman, founder and president of TotalBattery Battery Consulting, said: "If the market demand for Tesla electric vehicles is only half or even a quarter of Musk's estimate, then what will happen at that time, Musk's super lithium battery factory can only maintain half or a quarter of the capacity and Musk's lithium battery composition will not be much lower than the current price."

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