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Elon Musk Powers Up: Inside Tesla's $5 Billion Gigafactory


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I've tried to get across what the tipping point meant when Tesla fielded the Roadster in 2008, already had successful flights of Falcon rockets, and was talking solar. Most folks get all aroused when the subject of the current mass extinction we are witnessing first hand. That being the slow death of the ICE (Internal Combustion Engine.) The tipping point was when the first Model S' rolled off the plant floor in Fremont California. I tried to get my FIL out of OIS which my BIL oil guy recommended and that was exactly wrong. Fortunately he bought an equal amount of Tesla and doubled in profits what he lost with OIS. I tried to tell everyone here to buy Tesla and hold on and only a couple did, and made out rather well. One going in and out. The shorts get beaten up.

 

So here is my "opinion" on where the world is going in the next five years and whether one agrees or not, 5 year's time will definitely tell. What is really weird is that the folks who were the most vocal that Tesla was vaporware and would never come to market let alone succeed to build a major factory, never said well I'll be durned, you were right! in fact, they got sullen and adversarial in the media with agendas, and even a few here. What most miss is that I am not a control freak and they can rail on. It's like all those US dealers associations. In the same breath they say that EVs are a passing FAD, yet still trying to keep and pass laws to prevent Tesla from being able to sell cars directly to the consumer in certain states like mine and its neighbors. Strange behavior if they really believed that Tesla was not competition. And none of their anti free enterprise claims hold for anyone but them. Nor do their reasons hold water. Yes they are very afraid.

 

So here are the next steps in the plan, stated up front as before, and the same segments of society will be unable to hear or change. That's fine.

 

For folks interested and ready to make money there is all kinds of opportunity if one can see it too. This an excellent long article with all kinds of info, I will excerpt some highlights. Enjoy.

 

Excerpt:

 

"Elon Musk walks briskly onto the stage as hard rock blasts in the background. The guitar riff, which sounds like entrance music suitable for a professional wrestler or a minor-league cleanup hitter, fades out, and Musk surveys the crowd, nodding his head a few times and then sticking his hands in his pockets. "What I’m going to talk about tonight," he says, "is a fundamental transformation of how the world works."

 

The 44-year-old CEO of Tesla Motors and SpaceX (and the chairman of the solar energy provider SolarCity) is wearing a dark shirt, a satin-trimmed sports coat, and, at this moment, a knowing smirk. An admirer of Steve Jobs, Musk is an heir to the Silicon Valley titan in some psychic sense, but in a setting like this, he’d never be mistaken for the Apple founder. Jobs worked the stage methodically, with somber reverence and weighty pauses, holding tightly choreographed events on weekday mornings for maximum media impact. Musk’s events, which are generally held at the press-­unfriendly hour of 8 p.m. Pacific time, have a more ad hoc feel. His manner is geeky and puckish. He pantomimes and rephrases, rolls his eyes, and cracks one joke after another—his capacity for expression barely keeping pace with the thoughts in his head.

 

Musk begins by showing an image of thick yellow smoke pouring out of a series of giant industrial chimneys, contrasted with the Keeling Curve, the famous climate-change chart that shows more than 50 years of carbon dioxide levels soaring toward a near-certain calamity. It could be mistaken for something out of Al Gore’s An Inconvenient Truth. "I just want to be clear," Musk says, with a nervous giggle, his accent betraying his boyhood in South Africa. "This is real."

 

His comments on this April evening, in front of a raucous crowd of Tesla owners (and some reporters) at the company’s design studio in Hawthorne, California, are quintessential Musk—weighty but also a bit cheeky. They’re also just preamble. His electric-­car manufacturer is launching a new product line: large batteries that store energy in homes and even larger batteries that do the same for utilities and businesses. The Powerwall, a slender appliance designed to be mounted in your garage, comes in five colors and starts at $3,000; the Powerpack, an 8-foot-tall steel box that looks a bit like a utility transformer, is aimed at the energy industry and costs roughly $25,000. These prices are roughly half of what competing battery manufacturers charge.

 

"The issue with existing batteries is that they suck," Musk says. "They’re expensive. They’re unreliable. They’re stinky. Ugly. Bad in every way." The idea is to pair the new Tesla products with solar panels—either on the rooftops of homes or in large-scale solar farms—that will store energy during the day, when the sun is shining, so that it can be used in our homes, for free, at night instead of energy from power plants that produce greenhouse gases.

 

Musk thinks it just might be the key to solving the problem of global warming. He explains that if the city of Boulder, Colorado, population 103,000, bought a mere 10,000 Powerpacks and paired them with solar panels, it could eliminate its dependence on conventional power plants entirely. The U.S. could do the same with only 160 million of them. Then he offers even higher figures: 900 million Powerpacks, with solar panels, would allow us to decommission all the world’s carbon-emitting power plants; 2 billion would wean the world off gasoline, heating oil, and cooking gas as well. "That may seem like an insane number," says Musk, but he points out that there are 2 billion cars on the road today, and every 20 years that fleet gets replaced. "The point I want to make is that this is actually within the power of humanity to do. It’s not impossible."

 

If there’s something a little crass about a save-the-world pitch that ends with a plan to sell the general public $50 trillion worth of a new, unproven product, well, then, that’s Musk, too. After founding two successful Internet companies during the dotcom era (the latter of which, PayPal, was sold to eBay for $1.5 billion), Musk has made it both his mission and his business to help us save ourselves from ourselves. In doing so, he’s become one of the most successful startup founders of the past two decades. His rocket company, SpaceX, may one day provide an escape hatch should Earth ever be destroyed, as Musk loves to boast; for now, among other revenue streams, it’s got a nice $5 billion business launching cargo (and soon, astronauts) to the International Space Station. Tesla may be on a mission to rid the world of fossil fuels, but today, it’s a luxury-car manufacturer with a wildly successful product. According to Musk, the company’s Model S sedan outsold the Mercedes-Benz S-Class in the U.S. during the first half of 2015 and is on track to sell 50,000 cars for the year.

 

Tesla’s rise, in particular, has been stunning. Musk was widely mocked in the mid-2000s when he began describing a plan to build a high-end electric sports car that would be cheaper, better, and faster than a gas-powered one. Electric cars were known for being slow, impractical, and dorky, and no American entrepreneur had successfully established a car company of any kind since Walter Chrysler did it in 1925. Musk spent years deflecting criticism from pretty much every serious automotive expert and nearly went broke in the process. And yet Tesla’s designs not only made it onto production lines—they turned out to be amazing.

 

Better than amazing, even. The latest edition of the Model S, created by a team far removed from Detroit and led by a guy whose previous claim to fame was being fired from PayPal in a boardroom coup, received a score of 103 from Consumer Reports, which was a problem only in that Consumer Reports ratings are typically scored out of 100. (The magazine had to revise its scale in response to the record-breaking result. It has since tempered its enthusiasm after raising questions about the cars’ reliability, sending Tesla’s stock price plummeting.) The Model S also holds the highest safety rating ever from the National Highway Traffic Safety Administration.

 

Now, Musk is doubling down, expanding the capacity of the company’s main car-assembly plant in Fremont, California (which will eventually produce hundreds of thousands of cars a year), while building a factory-to-end-all-factories outside Reno, Nevada, that will produce battery packs for both cars and homes. Over the six days following Musk’s presentation, which was posted on YouTube and the company’s website, Tesla reportedly received reservations for $800 million worth of Powerwalls and Powerpacks, about what it makes in almost three months selling cars.

 

"I think we’ve really struck a note, without salespeople or advertising," Musk tells me. "With that you can do anything."

 

No journalist had ever before visited what Tesla calls the Gigafactory, which opens next year but won’t be completed until 2020. (And not for lack of trying. In October, a photographer from a Reno paper was arrested after sneaking onto the property and allegedly assaulting security guards as they tried to eject him.) Musk had warned me that the scale of the place would be overwhelming. "It will blow your mind. You see it in person and then realize, Fuck, this is big."

 

And because a big breakthrough in battery technology is unlikely, there’s basically one way to reduce the costs: Make and sell lots of them very efficiently, taking advantage of epic economies of scale. Dan Dolev, an analyst with Jefferies, recently predicted that the Gigafactory’s huge volumes will help cut the cost of Tesla’s batteries in half, essentially making the Model 3 possible. That’s why Musk is pitching home battery packs. "If we can create huge demand for batteries," Straubel continues, it will create "this virtuous cycle of reducing prices further."

 

Yes that is only a smidgeon of the in depth article. In it he is compared to Steve Jobs and the scope of his execution is beyond what jobs ever dreamed. The rest can be found here: http://www.fastcompany.com/3052889/elon-musk-powers-up-inside-teslas-5-billion-gigafactory?partner=rss

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