NEW TESLA-PANASONIC BATTERY GIGA-FACTORY AIMS HIGH

Tesla Motors’ Gigafactory Will See More Than 50% Overcapacity in its Li-ion Production

September 3, 2014 (Lux Research)

"…[Tesla Motors] and its partner, Panasonic, will contribute about 45% and 35%, respectively, of the initial $4 billion…[to build a new 35 GWh lithium-ion cell production facility – dubbed the Gigafactory – for electric vehicles], proposed to go on-stream in 2017…[but The Tesla-Panasonic Battery Gigafactory: Analysis of Li-ion Cost Trends, EV Price Reduction, and Capacity Utilization from Lux Research] projects sales of only 240,000 cars in 2020, leading to razor-thin margins to Panasonic and 57% overcapacity…Battery prices need to fall dramatically if plug-in cars hope to break beyond their current niche…Currently, Tesla has the lowest cost – about $274/kWh, according to Lux Research analysis…[Tesla hopes to lower that] to $196/kWh with the Gigafactory…In the optimistic scenario of Tesla attaining its targeted half a million EVs, Panasonic could rake in more than $15 billion between 2017 and 2020. But at the more likely 240,000 EVs…Panasonic would take in only $7 billion on its likely investment of $1.4 billion…The Gigafactory, proposed to be built at a cost of $5 billion, is designed to make 35 GWh Li-ion cells for half a million EVs…[But overcapacity could be 20 GWh]…This 57% overcapacity is unlikely to be filled either by rival carmakers or Tesla’s own plans to sell some stationary battery packs to developers like SolarCity for residential photovoltaic integration…” click here for more

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