A Tesla Model S is pictured at the Nevada Capitol building in Carson City, not long after the company's deal with the state of Nevada was struck. The deal expected to bring thousands of jobs and millions of dollars in economic growth to the Reno area, some of which should trickle into the Lake Tahoe Basin.
Tesla Motors says construction on its Storey County gigafactory is ahead of schedule.
In a more than 80-page report filed Friday with the U.S. Securities and Exchange Commission, the electric car manufacture said:
“Construction continued during the third quarter of 2014 at an accelerated pace with first cells expected to be produced in 2016 for use in Model S and Model X.”
The company says it has spent $18.8 million as of Sept. 30 on initial construction and acquiring the land for the gigafactory. It lists resources at “$2.37 billion in principal sources of liquidity available from our cash and cash equivalents, including $1.69 billion of money market funds.”
On The Factory
“We plan to use the battery packs manufactured at the Gigafactory for our vehicles, initially for Model S and Model X, and later for our Model 3 vehicle, and stationary storage applications. The Gigafactory is currently expected to attain full production capacity in 2020, which is anticipated to be sufficient for the production of approximately 500,000 vehicles annually as well as stationary storage applications. By the time the Gigafactory reaches full, annualized production in 2020, we expect battery pack production capacity to reach 50 GWh. Of this, we expect to build 35 GWh of cell production capacity at the Gigafactory and purchase 15 GWh of cells from other manufacturers, potentially including Panasonic.
“We believe that the Gigafactory will allow us to achieve a major reduction in the cost of our battery packs of greater than 30% on a per kWh basis by the end of the first year of volume production of Model 3. The total capital expenditures associated with the Gigafactory through 2020 are expected to be $4-5 billion, of which approximately $2 billion is expected to come from Tesla. A modular build strategy is enabling us to scale construction, capital requirements and capacity commensurate with growing demand.
“While our plan is to produce lithium-ion cells and finished battery packs at the Gigafactory, our plans for such production are at a very early stage. We have no experience in the production of lithium-ion cells, and accordingly we intend to engage partners with significant experience in cell production. We recently formalized our agreement with Panasonic to partner on the Gigafactory. Panasonic will invest in production equipment that it will use to manufacture and supply us with battery cells. We will prepare and provide the land, buildings and utilities for the Gigafactory, invest in production equipment for battery module and pack production and be responsible for the overall management of the Gigafactory.
“Additional Gigafactory partners will be finalized shortly to create a fully integrated industrial complex. Although planning discussions with production and supply chain partners continue to progress well, to date we have not formalized any agreements with any other partners. In addition, the cost of building and operating the Gigafactory could exceed our current expectations and the Gigafactory may take longer to bring online than we anticipate.”
POTENTIAL ISSUES
“Problems or delays in bringing the Gigafactory online and operating it in line with our expectations could negatively affect us.
“To lower the cost of cell production and produce cells in volume to allow us to grow quickly, we intend to integrate the production of lithium-ion cells and finished battery packs for our vehicles at our new Gigafactory. “Our Gigafactory plan, however is at an early stage. While we recently entered into various formal agreements with Panasonic on the Gigafactory, we have very little experience in building a factory of the size and scope planned for the Gigafactory, and no experience directly in the production of lithium-ion cells. In addition, to date we have not finalized agreements with additional Gigafactory partners that will be co-located at the Gigafactory. Also, the cost of building and operating the Gigafactory could exceed our current expectations and the Gigafactory may take longer to bring online than we anticipate. If we are unable to build the Gigafactory in a timely manner to produce high volumes of quality lithium-ion cells at reasonable prices, then our ability to supply battery packs to our vehicles, including Model 3, according to our schedule and/or at a price that allows us to sell them profitably and in the quantities we estimate could be constrained. Any such problems or delays with Gigafactory could negatively affect our brand and harm our business, prospects, financial condition and operating results.”
COMMITTED
“We plan to spend about $350 million in capital expenditures in the fourth quarter of 2014 as we continue to invest in additional production capacity, accelerate the pace of Gigafactory construction, and continue vehicle development and our global expansion.
“As of September 30, 2014, we had $2.37 billion in principal sources of liquidity available from our cash and cash equivalents, including $1.69 billion of money market funds.
“Other sources of cash include cash from our deliveries of Model S, customer deposits for Model S and Model X, sales of regulatory credits, cash from the provision of development services, and sales of powertrain components and systems. We expect that our current sources of liquidity, including cash and cash equivalents, together with our current projections of cash flow from operating activities, will continue to provide us with adequate liquidity based on our current plans. These capital sources will enable us to fund our ongoing operations, continue research and development projects, including those for our planned Model X crossover and certain future products, such as Model 3, establish and expand our stores, service centers and Supercharger network and to make the investments in tooling and manufacturing capital required to introduce Model X and to continue to ramp up production of Model S as well as make investments in the Tesla Gigafactory. We may seek additional capital resources to partially fund certain long-term growth initiatives.”
To view the full report go here