Tesla’s Biggest Move Since Battery Day

Tesla’s Biggest Move Since Battery Day: Giga Texas, is on occasion somewhat referred to as a terafactory, this is more just to bring to light the sheer capability of the factory when compared to the original giga factory in Nevada. But in reality, the capacity of Texas will only be around 200 GWh, last time I checked, 200 GWh, wasn’t one TWh.

In fact that is quite a large discrepancy, between texas and a proper terawatt factory. Although we expect Texas to expand, probably about 4 to 5 times the size it is, according to what Elon has said in the past, with plans on developing the site in excess of $10 billion.

The initial factory alone costing only around $1 billion, excluding fit out. Within time then, it is very possible that Giga Austin will actually become a terafactory. Elon tells us that he wants to scale, to the extreme. What if Tesla actually built a Terafactory earlier?

A factory, actually capable of a terawatt of cells a year, and with an EV factory attached. Alright maybe it wont be quite over 1 TWh a year, I mean lets face it, that is around 15 million cars a year alone.

But I get the impression Tesla’s new factory will be the biggest we have seen yet, despite Elon saying they will tend to reduce in size as they get more efficient. And perhaps this might end up being several factories built at once.

As this new factory is going to be producing more vehicles, than any other factory in history. The factory I am referring to is the new Tesla factory in Indonesia, which is very likely to go ahead, as both parties are highly enthusiastic about the deal.

Indonesia is planning on reaching a level of mining 1 MT of nickel a year. That’s an increase of about 3 times where they are at now. I think at least half of that must be earmarked for Tesla, as I simply don’t can’t imagine who else can consume that much nickel.

That is so much nickel, that when efficiencies in EVs and cell technology improve, just in the next couple of years, or at least in-house for Tesla, then that level of nickel supply, is not far off enough nickel for 20 million EVs a year.

Wow! Indonesia are planning on mining enough nickel for Tesla’s 2030 target production level. And the total supply of nickel in Indonesia is estimated to be 21 million tons, or enough for perhaps 200 million EVs total.

Well that’s just about enough for Tesla, all the competition will have to find other sources of nickel. Right, well we definitely will need some iron based cells to fill out the rest of the market. But 200 million EVs, with long range, will still be significant.

Indonesia banned the export of nickel ore in 2020, in order to force companies who wanted their nickel to manufacturer locally, rather than sending out the raw mineral, which is the lowest value added.

This makes economic sense. Indonesia know the value of their nickel, and aren’t going to let it go cheap. Therefore, I liken this similar to Tesla China. China has the capability of making all these LFP cells, Tesla designed some vehicles that could utilize these cells.

If Tesla hadn’t, then they would be selling about half as many vehicles today. Fast forward to Indonesia. There is all this nickel here, but the only way you can have it, is to set up the factory there too.

It may not be ideal for what Tesla wants, but it’s still going to result in Tesla making extra vehicles than they would have otherwise. And I have said before, that I don’t expect Tesla to make 4680 cells in China, so this correlates. Also China has presented us with a bit of stress lately, and is not feeling quite as secure as it once was.

It will be great to have a back up export hub, a lot of people expected this to be India though. But to be honest, looking at Indonesia geographically, it’s actually a great location.

It is ideal to serve as Tesla’s 4680 export hub, just like China can serve as Tesla’s LFP hub. It covers Asia and Australia, those markets are huge. Berlin can cover Europe, and the US already has 2 factories. Berlin and Texas are obviously still expanding too.

Which does start to make me wonder, where would Tesla’s next location be? A factory on every continent we are told. Well assuming we consolidate Australia and Asia, then we are left with Africa and South America.

There has been some talks about Brazil lately, and Elon has been visiting. Although this is likely to do with Starlink in the Amazon, and the nickel deal with mining company Vale. But South America may be the next location.

I mean LFP batteries may be a distraction too, there appears to be enough nickel in the world for Tesla to use nickel in all their cathodes, even if they are selling 20 million a year, assuming they secure the supply before everyone else. I mean LFP was an after thought.

Tesla didn’t know CATL were going to end up supplying them 100 or multiple 100 gwhs a year of LFP cells. That came more so by chance. Elon already envisioned that his plan was possible without LFP.

Of course there are going to be a lot of other great substitutes for all sorts of batteries for varieties of applications, along with improvements in cost and energy as we go. How do I know? Because we don’t even have 0.1% of the batteries we need in the world, we need about 1000 times more batteries.

Now think of just how much better the technology and economies of scale will get, when you make 1000 times more of something. What if the Indonesian government are behind Tesla fully and want to turn themselves into the largest EV producer on the planet.

A government that actually understands, and appreciates the benefits of Tesla flourishing in their economy. Rather than a government trying to protect the companies that paid for politicians campaigns. Indonesia would likely be willing to set up infrastructure just for Tesla, railways, maybe a port.

Kind of similar to Henry Ford’s rouge factory, with a whole town working on cars. Oh a town, no, wait, this needs to be bigger than that. Tesla are going to be the largest selling car company on the planet. They need something more like Toyota City.

Yea a whole city could be built around Tesla’s manufacturing plant, with more vertical integration, especially if they have an exclusive rail and port. I am sure the government are bending over backwards for Tesla to set up the largest car manufacturing plant ever in history.

Probably some decent tax benefits too. It sounds like it is all still being negotiated. I think they will just make life easy for Tesla, as Tesla can do so much for Indonesia. The government are more concerned with the commerce Tesla are creating, rather than getting top dollar for the nickel.

They will no doubt give Tesla a great deal for the nickel if they are willing to set up there. Which means Tesla can save that little bit extra, especially to justify, or subsidize the export costs.

I don’t think a machine to make the machine would cost as much to build in Indonesia, it might even be built faster, especially with the government sounding like they are happy to facilitate anything Tesla need. Germany should have looked after Tesla better, but they have local interest too.

Tesla need a nation that really does appreciate them, and the one that happens to have the largest supply of the number limiting factor for Tesla in the immediate future, happens to be very motivated to get this going. After issues with China and Berlin, I think Tesla and probably Elon, just want it easy now.

Imagine a government that will jump through hoops to get you there. I feel really excited about this. I am sure it will be built in stages, but who knows, what if they can build 4 factories in a few years.

Capable of around 10 million a year. On top of what must be another 10 million elsewhere by that stage. Tesla expanding in China doubled Tesla’s capacity, and then some, and China is continuing to expand, but only as fast as LFP cells can be produced.

Tesla is on their own trajectory now, with growth being held back by their own pace as to which they can build battery cells, rather than being limited by anyone else. The growth we saw in China, is going to look like child’s play compared to the growth we will see come out of Indonesia.

They have so much nickel there, and Tesla’s cell factories should be producing at least 5 times the rate CATL can. It will not be long now until Tesla is the largest battery cell manufacturer on the planet, and shortly after that Tesla will produce over half of all cells on the planet.

However, even everyone else combined, still shows no signs of keeping up with Tesla at this rate. Implying Tesla’s market share of global cell production will only further continue to rise.

Bear in mind through this time CATL will be the number producer of cells, and Tesla will also be consuming over half of what they produce. Does that help give you some idea of just how much larger Tesla will be than every other EV manufacturer?

But how any other EV OEM can afford the losses when they start to approach more than one million vehicles a year, well put it this way, it’s going to be interesting to see.

Anyway, I am placing this factory as the biggest event from Tesla since Battery Day. In fact this is still just more of Battery Day coming into fruition, only more of the extreme side.

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Information Source: Youtube – Tesla Economist

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