On the day of the highly-anticipated Tesla Gigafactory investor-only event, Tesla announced on its blog that it was beginning its battery cell production.
“Tesla’s mission is to accelerate the world’s transition to sustainable energy through increasingly affordable electric vehicles in addition to renewable energy generation and storage. At the heart of these products are batteries,” the blog states.
January 4, 2017 marked the day when Tesla and Panasonic began mass production of the lithium-ion battery cells which will be used in the Powerpack 2 and Powerwall 2 energy products. The cylindrical “2170 cell” lithium-ion batteries are also an integral part of the Model 3 with that specific production set to start in the second quarter of 2017.
However, the Jan. 4 event apparently caused a drop in stock prices the day following the event as Goldman Sachs analysts felt that Tesla didn’t share enough details to its investors about the increased production plan and its capital requirements. In Cowen’s note, analysts also expressed concern about Tesla’s cash needs as its Model 3 production begins ramping up and its plans to develop Gigafactories in Europe and China.
Tesla is in a unique position of trying to control the entire supply chain rather than simply manage it. Tesla’s Supercharger network is basically the company controlling its own electric gas stations- Tesla produces its own car batteries is like what an oil company provides in the fossil fuels sector.
In fact, following the Jan. 4 Tesla investor event, stock market analysts conveyed that oil investors may suffer from Tesla’s “black swan” potential in 2017. Geopolitical developments may cause serious swings in 2017 commodity stock prices and an electric battery breakthrough could really turn the tide on oil demand.
Tesla’s electric autonomous car innovation apparently sparked quite the discussion in the first few hours of the Consumer Electronics and Technology trade show held in Las Vegas last weekend as another startup company showcased an electric car that supposedly goes faster and performs longer on a single charge than Tesla’s offerings. Traditional car manufacturers like Ford, Nissan, and Chrysler have already started releasing electric car test models with the driverless-car in mind and may already have the infrastructure in place to jump on the electric autonomous car bandwagon.
The Gigafactory in Sparks is reportedly being built in phases so that Tesla and partners can begin manufacturing immediately within the finished sections. However, some people are wary about Tesla accelerating the $6 billion facility’s development too rapidly, perhaps causing problems for its auto business.
According to Tesla’s recent blog post, “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.”
The Fremont plant built over 83,000 electric cars in 2016 which is a huge increase from the 50,000 they built in 2015. However, Tesla experienced some early-run production problems in early 2016, in which Tesla CEO Elon Musk admitted he spent in “production hell”. Trying to line up the dots of mass production, supply, and demand for Tesla while getting everything right could be a challenge.
Tesla states that it plans to hire at least 6,500 local people at the Gigafactory for its peak production in 2017 and indirectly create around 20,000-30,000 additional positions in the surrounding area.
The Tesla marketing team could not be reached for comment.