Tesla Gigafactory Begins Production Of Battery Cells For Powerwall, Model 3

Tesla announced on January 4 that is has begun mass production of the battery cells that will power its second generation energy storage products and the Tesla Model 3 midsize car due out in about a year. The Tesla Gigafactory began turning out pre-production cells last December. The new cells are called “2170 cells”, which indicates they are approximately 21 millimeters in diameter and 70 millimeters long. In a blog post, Tesla says the new battery cells were “jointly designed and engineered by Tesla and Panasonic to offer the best performance at the lowest production cost in an optimal form factor for both electric vehicles and energy products.”

The first 2170 cells will be used in the company’s Powerwall residential storage batteries and Powerpack grid-scale energy storage products. Cells intended for the Model 3 will go into production in the second quarter of this year. Tesla says by 2018, it will be manufacturing 35 gigawatt-hours of batteries, nearly as much as the rest of the entire world’s battery production combined.

The Tesla Gigafactory is a big part of Elon Musk’s plan to rethink how factories work and unlock efficiencies of scale that will drive down the cost of manufacturing. He calls it “building the machine that makes the machine.” He expects ultimately that factories of the future will be able to operate 3 to 10 faster than they can today.

“The Gigafactory is being built in phases so that Tesla, Panasonic, and other partners can begin manufacturing immediately inside the finished sections and continue to expand thereafter. Our phased approach also allows us to learn and continuously improve our construction and operational techniques as we continue to drive down the cost of energy storage. Already, the current structure has a footprint of 1.9 million square feet, which houses 4.9 million square feet of operational space across several floors. And we are still less than 30 percent done. Once complete, we expect the Gigafactory to be the biggest building in the world.

“With the Gigafactory online and ramping up production, our cost of battery cells will significantly decline due to increasing automation and process design to enhance yield, lowered capital investment per Wh of production, the simple optimization of locating most manufacturing processes under one roof, and economies of scale. By bringing down the cost of batteries, we can make our products available to more and more people, allowing us to make the biggest possible impact on transitioning the world to sustainable energy.”

Here’s the part that should gladden the heart of Donald J. Trump. Tesla says making battery cells in the US will create thousands of good paying jobs for American workers. Tesla and Panasonic will hire several thousand workers in 2017. When the Gigafactory is finished and in full production, it will employ 6,500 people directly and create 20,000 to 30,000 additional jobs in the surrounding community. Why not tweet about that, Donald?

Image credit: Tesla Motors

Tesla PowerWall Sells Out Through 2016, Brings In $800 Million

When Elon Musk unveiled the Tesla PowerWall last week, it unleashed a tidal wave of orders — so many, in fact, that filling them all will take well into 2016. Assuming all those orders get completed, they will bring in $800,00,00 in new business for  Tesla, says Engadget.

Why would they not all be completed? Frankly, because many people have no idea what they are signing up for. Some analysts call it “The Prius Effect.” Once we think someone else is getting some cool, new technological bauble, we want one too. Let’s see if we can gain a little clarity here.

The Tesla PowerWall comes in two configurations. The 7 kilowatt-hour kWh model is intended for daily use. Tesla’s corporate cousin, SolarCity has made the decision not to offer the 7 kWh unit to its home solar customers. It “doesn’t really make financial sense,” says spokeman Jonathan Bass. That’s because customers are better off selling any excess solar power to the local utility and getting paid for it that using that power to charge their PowerWall. The economics of an average home with rooftop solar “are not significantly enhanced by including the Tesla battery,” according to an analysis by Bloomberg New Energy Finance.

The larger version is a 10 kWh model that is not intended for daily use. In fact, it is designed for no more than 50 discharge cycles a year, according to  Bloomberg News. That’s the unit SolarCity will be offering customers. “Our residential offering is battery backup,” Bass said in an e-mail. A backup battery in the basement seems very cool, but in fact, it is only rated for 2 kilowatts of continuous power and even then only for a few hours. That’s barely enough to power a toaster or a few small window air conditioners. It it not anywhere near enough for people to fire their electricity provider and move completely off the grid.

In order to meet the energy needs of a typical American household, 8 or 9 PowerWall units would have to be linked together. Since the deposit on each one is $5,000, the homeowner would need to spend $45,000 to get the same back up power available from a this $3,600 generator Home Depot sells, says Bloomberg. Even Elon Musk admits storing residential power with the Powerwall is more expensive than grid power, but he says, “that doesn’t mean people won’t buy it.” Adds Brian Warshay, an energy and technology analyst with Bloomberg New Energy Finance, “It’s a luxury good—really cool to have—but I don’t see an economic argument” for it.

What’s the good news about the Tesla PowerWall? Simply this. At current prices, it means Tesla has lowered the cost of batteries to $250 per kWh. That’s something the “experts” said wouldn’t happen until 2020. And when the GigaFactory begins production in 2016, costs should drop another 30%. That will give Tesla a huge economic advantage in the marketplace versus other battery makers.

When the price of the PowerWall drops another 30%, or even more, then it will make sense to get one for your home. In 10 years, in-home battery backup systems will be as common as refrigerators and washing machines — and cost just about as much.