Why Apple Could Win Big With Tesla’s Giant New Battery Factory

http://www.wired.com/business/2014/02/teslas-giant-battery-factory-save-apple/

by cyphersanctus • 12 years ago

40 27 12 years ago

Seems like a bit of a reach?

revelation2• 12 years ago

Particularly since the batteries the Gigafactory will produce are not fit for use in consumer gear, at least not without heavy modification. Tesla uses them in temperature and load controlled battery packs, so they have stripped away all of the protective circuits that nomally protect LiIon cells from overload and even removed the outer metal casing thats supposed to stop them from shorting out.

digikata2• 12 years ago

The design of the current Tesla battery would have been significantly driven by the nature of existing capital investments in battery manufacturing processes. There's no indication that batteries would necessarily be in that form in a process you build from scratch. The Gigafactory could very well plan for variations around their core production process. And, based on the production volume that Apple could consume, Apple certainly has the investment capital to make that variation worthwhile.

keeperofdakeys• 12 years ago

Safety circuits are external to the cell, it's the makers of the final product that wire them into the battery pack.

danielsiders• 12 years ago

Also given speculation[1] that the proposal is a PR stunt to put pressure on suppliers, not an actual idea.

[1] http://www.bloombergview.com/articles/2014-02-28/tesla-is-a-...

bri3d• 12 years ago

That speculation is questionable at best, especially since the author seems to entirely forget that Toyota is partnered with Tesla for EV technology and not just an investor.

justinsb• 12 years ago

To me, it seems much more likely that an Apple/Tesla meeting revolved around Apple wanting Tesla to offer an iOS powered in-car computer, as they've just done with the other carmakers.

Apple could also be buying Tesla, of course, but I can't imagine Apple not at least trying to get Tesla onto iOS. Though I also can't imagine a world where Tesla would agree!

threeseed• 12 years ago

There is zero chance of Apple buying Tesla. It's either (a) iOS in the car as you said or (b) co-investment, patent sharing or technology sharing between the two companies.

dippyskoodlez• 12 years ago

Given the battery 'advances' Apple likes to tout, I wouldn't be surprised if it's both :)

The reoccurring thought for me though: "FINALLY we're getting somewhere!"

startupfounder• 12 years ago

This is bigger than any Apple deal.  THINK BIGGER.

Apple might or might not invest in the Gigafactory to reduce the cost of their lithium battery component of their hardware by 30%, but tesla is thinking bigger.

I first thought that Apple should buy Tesla, but my thought process has changed and I think this discussion between Apple and Tesla is short sighted, it's a means to an end.

Don't think of Tesla as only a car company. 35GW of battery production per year is a huge amount of electricity storage potential.

The USA uses ~1,000GWh of electricity per year, much of this is baseline power needs, but more of this is peak power caused by time of use and heat spikes. We build 1GW power plants all the time to take care of these peaks in power demand. When the price of electricity hits a certain real-time price these natural gas plants turn on, produce the high value electricity and then turn off when the price falls back down.

But why is the electric motor so much better than a combustion motor? Time. Torque is instant.

Elon thinks BIG, REALLY BIG!

This is a Distributed Peak Production Play. If I am correct then each year that the Gigafactory can produce an additional 35GW of storage potential, or 3.5% of the USA's generation capacity.

Each Tesla automobile is an internet connected, transportable, 85kW distributed instant peak power plant and when you put 500,000 new powerplants on the road each year for 10 years you have just cut peak power and completely disrupted the Global Energy Industry by creating 350GW, 35% of the USA's annual demand, and its distributed redundant energy system.

Elon loves redundant distributed systems, Falcon9 has 9 Merlin engines, Tesla's battery packs, Solar City's distributed solar, etc.

Don't believe me? Just wait 10 years.

pirateking• 12 years ago

I believe you alright. It is fairly obvious the Tesla automobile is a Trojan Horse for much bigger strategy. Even if it originally wasn't planned that way, it most obviously can be, so why not? The strategy you describe sounds very realistic, and there are likely even grander metagames when you take into account SolarCity and SpaceX.

bfe• 12 years ago

He's already started marketing Tesla battery stacks with SolarCity panel systems.[1] The Gigafactory could drive major growth in that program.

1. http://www.solarcity.com/pressreleases/218/SolarCity-Introdu...

morsch2• 12 years ago

The USA uses ~1,000GWh of electricity per year

That's off by several orders of magnitude. Wikipedia says ~4100 TWh/year, Wolfram Alpha ~3900 TWh/year. It's also 35 GWh of battery production, not 35 GW (which seems obvious in retrospect but I just spent 10 minutes trying to wrap my head around how the 35 GW figure could fit in). A 1 GW power plant -- which incidentally is quite large -- generates (if run at capacity) 365 * 24 = 8760 GWh per year.

So, not 3.5%, but roughly 0.001%.

http://www.wolframalpha.com/input/?i=electrical+energy+used+...

http://en.wikipedia.org/wiki/Energy_in_the_United_States

DVassallo2• 12 years ago

I grew up in a small country of 400K people, which in 2012 generated 2.2GWh of power. [1] This is very easy to calculate, since the country has only 2 power plants, and the electricity grid is completely isolated. [2]

I was astonished to realize that the battery output of 4 weeks from the gigafactory would power my native country entirely from batteries for a full year!

[1] Page 2: http://www.nso.gov.mt/statdoc/document_file.aspx?id=3743

[2] https://www.enemalta.com.mt/index.aspx?cat=2&art=5

gizmo686• 12 years ago

The USA uses ~1,000GWh of electricity per year

That sounds off. A quick search suggests that the USA has ~1,000GW of capacity.

[1]http://www.eia.gov/electricity/annual/html/epa_04_03.html

fudged71• 12 years ago

Each Tesla automobile is an internet connected, transportable, 85kW distributed instant peak power plant

I've thought about this for quite some time now. It's pretty neat that your files could follow you wherever you go. Driving a large hard drive is much better bandwidth than storing your files for retrieval in "the cloud"

ajcarpy2005• 12 years ago

But why is the electric motor so much better than a combustion motor? Time. Torque is instant.

I don't know if I parsed this sentence correctly but what came to mind was grid-storage batteries connected to very large flywheels[1] driven by electric motors.

And once the flywheel is spinning, short pulses of energy will keep it rotating at high speed.

I think this type of setup could prolong the life of the batteries.

[1] http://en.wikipedia.org/wiki/Flywheel_energy_storage

paul_f• 12 years ago

Is the limitation in making faster/better/cheaper batteries a bigger battery factory? Or is it the raw materials to make LiIon batteries?

What is the world's capacity for lithium hexafluorophosphate? Japan currently makes the bulk of the supply.

cma• 12 years ago

I'm going to be very surprised if you have found something that major that they overlooked.

starky• 12 years ago

The limitation on making better batteries is research, having a NA factory isn't going to help that. As per increasing the rate and reducing the cost, I don't have a good answer for that, Li-Ion battery production is already incredibly automated I'm not sure how much they can improve the rates. I would be surprised if Tesla hasn't figured out the supply chain management for all the materials they require.

I'm still sort of skeptical about this factory. There have been very few battery manufacturing plants ever built in North America over the years and they have pretty much all shut down (A123, E-One Moli, and Delphi are the three that come to mind) as they don't make money.

mistercow• 12 years ago

But Koslowski says those old batteries could also become part of a robust secondary market. They could, for instance, store energy generated by home solar grids, which can make use of less-than-full strength cells because they don’t have to go anywhere.

Is that how the degradation curve of LiIon batteries goes? My experience with them in consumer electronics has been that they seem to drop capacity about linearly for a while, and then suddenly there's a massive drop-off and the battery becomes more of a brick than anything.

semerda• 12 years ago

I feel like this might be a step towards Tesla working with Apple to make their (Tesla's) batteries consumer ready/enabled. Apple obviously has good experience and knowledge on that front that could create an interesting partnership where Apple consumer products all have Tesla batteries.

Hey that be one cool footnote to have on the back of your iPhone.. "Designed by Apple in California and Powered by Tesla" ;-)

ksec• 12 years ago

It is not as if Lithium is a abundant reserve that is available whenever you need.

Yes there are enough Lithium reserve even for the next 100s years even if EV were suddenly replacing all cars today. And it is much like oil, there are still HUGE amount of reserve.

But the problem is extraction. Or more precisely the cost of extraction. If some of these reserve cost 10x more to extract then no one will invest into extracting it. Example would be if US didn't perfected Fracking Natural Gas wouldn't be so much cheaper today.

Then there is the technology side of Battery. Telsa are NO expert in Battery Chemistry and Technology. They have currently zero expertise and experience with it. Compared to Panasonic or Other who have been perfecting the battery tech for decades.

The problem with today's battery isn't production capacity. Heck China could ramp up production of battery faster then you could even imagine and have a world of over supply issues within a year. The problem is with battery tech itself which requires innovation or even a leap forward.

Why Apple Could Win Big With Tesla’s Giant New Battery Factory

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