Tesla's Battery Giga Factory  

Greentech Media has an article on Tesla's massive "giga factory" for producing batteries - Tesla Giga Factory: $4B to $5B Price Tag, With Battery Production Slated for 2017. More at GigaOm - Tesla confirms huge battery factory plan, will ship 35K Model S cars this year.

Tesla CEO Elon Musk provided some more details on the company's proposed battery factory:

* The company just announced a $1.6 billion convertible debt offering. Tesla looks to offer $800 million of convertible senior notes due in 2019 and $800 million due in 2021 to build the world's largest battery factory.
* Musk predicts that the new factory will produce batteries for 500,000 vehicles by 2020.
* Tesla expects to send the kilowatt-hour price of batteries down by 30 percent.
* The plan is for construction to start in 2014, with production beginning in 2017. ...

Musk also said that Panasonic, currently supplying hundreds of millions of cells to Tesla, would likely join in on the new factory. Samsung has been mentioned as a potential partner. I'll throw in Apple as a potential partner; computers and tablets need lithium-ion batteries (albeit in different form factors), and there's been talk of recent Apple-Tesla meetings.

The Tesla CEO envisions "a plant that is heavily powered by renewables, wind and solar, and that has built into it the recycling capability for old battery packs." “It is going to be a really giant facility. [...] We are doing that something that’s comparable to all lithium-ion production in the world in one factory," said Musk in a previous earnings call.

Investment bank Barclays writes, "For the time being, our model does not reflect the additional cost of building out a giga factory, or the significant potential revenue that Tesla could generate from non-automotive sources such as grid storage. Optionality could provide upside for the stock, as investors consider the potential upside to revenue from non-automotive sources."

“We believe the days when Tesla was known as purely an auto company are numbered,” wrote Morgan Stanley analyst Adam Jonas in a January research note, adding, "We are witnessing the most disruptive intersection of manufacturing, innovation and capital experienced by the auto industry in more than a century.” Jonas also opined that “Tesla may be in position to disrupt industries well beyond the realm of traditional auto manufacturing. It’s not just cars."

Bloomberg also has an older article on Tesla's sister company Solar City which looks like being a big customer for batteries from the Gigafactory - Tesla's Industrial-Grade Solar Power Storage System.

It’s weird to see the big, red Tesla Motors “T” logo hanging from the side of a house or a building. But it’s the real deal. The company’s march from the automobile to the home, office, and factory has begun.

This week, SolarCity, which sells and installs solar panels for residential and commercial customers, began offering an industrial-grade power storage unit produced by Tesla. The system mounts on a wall and looks something like a white mini-fridge with Tesla’s distinctive logo in the upper left corner. It contains hundreds of the same lithium-ion batteries that Tesla’s Model S sedan needs to run and, in fact, has about one-eighth of the juice found in Tesla’s top-of-the-line battery pack. “If you go to the end of the manufacturing line at the Tesla factory where they put the battery pack on, you will see these storage systems being assembled,” says Pete Rive, the co-founder and chief technology officer at Tesla.

The purpose of the storage system is twofold. It lets solar customers shift off the grid during times when energy companies charge their highest rates, and it provides a backup system during power outages. SolarCity has been offering these systems to consumers on a limited basis—a few hundred customers so far—and, as of this week, began selling it to commercial customers as well. Customers do not have to pay upfront for the hardware but will need, instead, to commit to a 10-year service agreement with monthly payments.

The battery pack would cost about $15,000 without financing. “Our long run goal is to include a storage system with every solar system we sell,” says Rive.