The 50 Gwh/yr pack assembly capacity is actually enough for 588,000 Model S with a 85kwh pack.

When this factory is build the undisputed leader in the electric automotive industry will be Tesla by a very large margin. In fact this year Tesla already is looking to become the largest consumer of automotive batteries in the world doing 35k Model S with approximately 85kwh pack per car or a total of 2,975,000 kwh. The consumption of the entire Nissan/Renault alliance is less than 100k BEVs times 24kwh or just 2,400,000 kwh. This is important because the volume leader will also be the one that can drop the price the most and therefore also become the most profitable BEV maker.

I will repeat that the strategy of making short-range BEVs with long charge times (<50kW) and low engine power (<120kW) is a dead end strategy because it makes a worse car experience than a similar powered gasser that also cost less. On the other hand, Tesla's strategy of making long-range BEVs (over 200 miles real world) with short charge times (135kW) and high powered engines (>225kw) is winning because it makes a better car than a similar powered gasser and cost roughly the same. The cost parity is possible because a high power engine and transmission cost much more in a gasser than in a BEV and that is nearly making up for the higher battery cost of the BEV. There is no such cost advantage with a low powered car as the extremely high global volumes of the 100kW engines has bought down the cost of these otherwise complex gasser engines and transmissions.

Only Tesla's strategy will be able to move a significant number of BEVs and therefore also bring down the cost of the batteries for Tesla's type of BEVs. Volume production is driving battery cost more than anything else. Without that we will never get to an affordable mass market BEV. And you start with the low hanging fruit as Tesla does which is the market for performance cars.

@Clett I do. I would infer Tesla's battery cell costs with info from Tesla's battery pack prices. Tesla's 60kWh pack cost $37,102 and the 85kWh pack cost $44,564. In other words you get 25 kWh more battery for just 7462 USD ($44,564-$37,102) or just 300 USD per kWh (7462/25). This is the cost of the cells used in the battery pack. In other words, the 85kWh pack contains 25500 USD (300*85) worth of battery cells whereas the remaining 19000 USD (44500- 25500) is used 1) to produce the battery pack 2) to account for profit, 3) to account of insurance allowances (cost of inevitable battery recalls) and 4) to finance the cost of providing Tesla owners free electricity for life when using the Tesla supercharger network. Note that the 60kWh battery also cost 19,000 USD plus cost of cells that are 300*60 = 18,000 USD or 37000 USD in total.

With this new factory Tesla might reduce the cost at the cell level by 30% so 300*0.7 = 210 USD per kwh. I think Tesla can reduce packaging costs by more than 30%. I speculate that Tesla need 50 USD per kwh for packaging in the new factory and 100 USD extra per kwh for profits, insurance allowances and prepaid free long-range driving for life. The Model E will need 60kwh to do 200 miles minimum real world and the battery pack everything included will therefore cost about 360*60 = 21,600 USD. Selling the Model E for 45000 USD should therefore be very doable. Model E will come with the same 225kW engine as the basic Model S or Model X probably in a redesigned cheaper to manufacture form that will be used also in the coming versions of Model X and Model S.

It is amazing to consider:

Years and oceans of ink devoted to America's battery dreams - A123, Envia, 24M, Aquion, ..

Then, Tesla, the-Romney-loser plans to build more batteries than than the rest of the planet - ALL on US soil - and all is well.

'What a long strange trip its been' continues..

That is a really big step for EV cars. Still I don't see why the batteries would be cheaper coming from this factory than from Panasonic current factory, past a certain volume of manufacturing the price doesn't shrink much by increasing the volume. Also they need to increase the Lithium supply to feed a 2x demand in battery production. Also I don't see this working without panasonic transferring its battery technology and a long term agreement to upgrade the technology when new batteries comes in the market. Panasonic regularly upgrade its batteries because they have research and development labs. A manufacturing plan is not enough to stay a player in the battery game. You need to be able to keep pace with the progress of the technology

But anyway that's a good news, and in Nevada this factory could be mainly powered by solar energy.

The long strange american trip in batteries has been one of venture capital thrown out to show failure rather than a real intent to build a new industry based on knowledge of the future trends. We protect the old and destroy the new because the bosses of our leaders own the old, and that still makes lots of money. Those that make the money, make the laws and make the decisions. They have decided that EVs and batteries are a failure and our political bosses agree. Elon didn't get the message.

The ARRA funded battery plants were to have built 500,000 packs a year (much smaller packs though) and it is routinely touted in the press that the demand for these batteries is just not there. So how does this jive with Tesla building a plant that is about 8 times larger than the entire ARRA battery manufacturing initiative?

Gee, I sure hope that Tesla will sell most of these batteries made in the new factories to OEM's to build PHEV's. One can build 8.5 PHEV-30's of 10kWh each for each Tesla 85kWh pack.

The main advantage behind Tesla's sale success is that its battery pack is made to disappear underneath the cabin, when the battery pack also serves as the car's main structural component. A very appealing vehicle is then made possible with ample of internal space and luggage room.

A PHEV made using Tesla's battery technnology and layout can also enjoy the same sale success as the Tesla's BEV.
Existing PHEV's are already cost-effective when factored in the energy cost sanvings, however, adoption of existing PHEV's have been very slow...due perhaps to the intrusion of the battery pack into the trunk space, rendering the whole vehicle unappealing.

Whether or not Tesla will choose to make future PHEV will be a big unknown. However, if Tesla will be so kind as to sell its future battery packs to other OEM's in order to make very appealing future PHEV's, the world will be a Better Place! So, instead of being able to produce 588,000 future 85-kWh Tesla BEV's yearly as Henrik predicted, the world will be able to enjoy about 5 Millions PHEV-30's YEARLY, with large trunk space, light weight and superb performance due to the low center of gravity and the lightness of the battery pack that is also serving as main structural member of the car!

Of course, Tesla will make profit with the sale of its future battery packs that will make its investor happy, and also that they are doing something real good for the world!

Now, after 10 years, the battery pack in the BEV will have to be replace due to ageing, so, the vast potential of the 85-kWh battery pack will be wasted when it can be charged 5,000 times and capable of propelling the vehicle million of miles (5,000 x 200mi/charge = 1 million mile) instead of 120,000 miles in those 10 years.

However, in a PHEV-30, if charged twice daily or 500x/yr, will result in 80-90% petroleum savings and won't exhaust the 5,000 cycles in less than 10 years, and let's imagine the amount of petroleum saved what 8x more PEV's could be built for the same amount of battery capacity in a single BEV!

@Henrik,
The following link shows that the NCA 18650, as used in Model S, degrades only 10% of total capacity after 3,000 charging cycles. This is 10 folds improvement over the NCR chemistry of previous generation.

http://www.teslamotorsclub.com/showthread.php/12709-18650-Batteries/page2

What I'm saying was that the superior battery chemistry and packaging by Tesla has also a lucrative market for PHEV as well as other non-automotive usage. Any excess future battery not used for BEV can be sold to other OEM's for making PHEV batteries, at significant profit. So, the business prospect of the proposed Tesla battery factory will be very good.

Lithium battery is also very important in backing up solar and wind electricity, so it's important that the amount of battery will be spread out as much as possible to achieve the most CO2 emission reduction per kWh of capacity. To that extent, PHEV usage will greatly help in this regard.

@Roger I was refereeing to deep cycling 0 to 100% SOC. The 3000 cycles in your link is for shallow cycling 60 to 90% SOC. I was still wrong by saying 600 cycles the correct number is 300 cycles to about 80% of original capacity at 0 to 100% SOC as is also evident from your link that also link directly to Panasonics own material confirming this. And no, the Tesla battery is no good for either short range BEVs say 24kwh packs and certainly not for PHEVs that need even more durable and also more costly cells.

A good rule of thumb I use to figure out the practical cycling efficiency of battery packs is to look at the warranted miles and battery pack size. For instance the Tesla Model S with a 60 kwh pack has a 120,000 miles warranty. Each kwh is good for 3 miles so the cycle life to about 80% of original capacity is 667 cycles = 120000/(3*60). The Leaf is warranted to 100,000 miles and has a 24 kwh pack. Its cells are therefore good for 1388 cycles =100,000/(24*3). Finally let us do the volt it has a 100,000 miles warranty and a 16.5 kwh pack so you get a cycle life of 2020 =100,000/(3*6.5).

Now that we are at it Panasonic has also developed a 4Ah 18650 cell that is quite a lot better than the 3.1Ah 18650 cell that Tesla currently uses, see link below. I expect it will be some version of that cell that the Ghwatt factory will make. Most has said that sometime next year new larger battery packs will be available for model S and X and I guess they will be based on Panasonics 3.4Ah 18650 cell.

http://www.greencarcongress.com/2009/12/panasonic-20091225.html

I also disagree that smaller packs are better for stabilizing the grid than larger battery packs. Vehicles with very large battery packs can be useful in an intelligent grid because they have some battery capacity to play with given the price for electricity is right. A PHEV owner only has a small battery that needs to be full all the time because its kwh are used up on nearly all trips. So no selling back to the grid to stabilize it in times of very high demand from the PHEV owner.

@Henrik,
The following reference shows distinctly that the NCA 18650 battery chemistry was tested by independent university from 4.2 to 3.0 V (>90% DOD) and shows only 18% capacity reduction after 5020 cycles. The test is done at 5C discharge rate, meaning that in a 10-kWh PHEV, at least 50 kW of continuous power will be available. At lower discharge rate of perhaps 1-1.5 C for most of the time and at lower DOD of 70-80% for PHEV, the cycle life may be even higher. Of course, burst power will be higher, perhaps 75 to 100 kW of burst power will be available for quick acceleration. Perhaps the best-kept secret is that Tesla's battery is much, much better than common laptop batteries, and having much longer calendar life and cycle life.

This is a lengthy technical document, but you can look at the conclusion section at the end to get the gist of it.

http://mtrl1.me.psu.edu/Document/ZhangY_JES_2009.pdf

The link below shows that Tesla already in 2013 became the industry leader by kwh volume eclipsing the Renaul/Nissan alliance. Also note that the Outlander plugin is doing very well. Apart from Model S it is the only pluggable car that is in more demand than its production capacity.

http://www.greencarreports.com/image/100457894_estimated-2013-lithium-ion-battery-consumption-for-plug-in-electric-cars

A Tesla Model S-85 with 4000 mAh batteries would become a Tesla Model S-110 with 500+ Km range.

That could happen by 2017 or so?

Teslas with the following battery generation could become the Tesla Model S-150 with 700+ Km range.

That would be close to the maximum battery pack capacity and range required by 2020/2021 or so.

Roger there are 13 million tons of lithium to be mined from brine mines. Each 85kwh pack from Tesla uses about 40 kilo of lithium carbonate. So you could do 325 million of these battery packs. However, you can also extract lithium from seawater although more expensively currently. There are 230 billion ton of lithium to be extracted there enough for 5750 billion 85kwh packs. We just need 1 billion of these packs to make every vehicle on the planet a long range BEV. Tesla will recycle materials from worn-out batteries into new battery packs. At some point in time this planet can do just fine with lithium from old battery packs so there will be no or little need for mining/extracting new lithium.

Fuel cell cars and gassers will eventually be considered impractical by comparison because they cannot be charged at home and because of their limited trunk space. Note that the Model S has more trunk space than a similar sized gasser. It has a trunk both at the front and in the back. The 10s of billions of USD that have gone into the development of fuel cell vehicles is unfortunately a nearly complete waste as that car will never succeed in the competition with BEVs.

http://www.bloomberg.com/news/2012-06-19/ipad-boom-strains-lithium-supplies-after-prices-triple.html

http://en.wikipedia.org/wiki/Lithium#Production

@Harvey if there is no demand for larger battery packs Tesla will not make them just as they scrapped the 40kwh pack because it was not in demand (less than 5%). Today about 20% of the packs Tesla deliver are 60kwh packs and 80% are 85kwh packs. The 3.4Ah cell could make a 94kWh pack and I think that will be made available sometime next year. It will also cost more so it may not be in very high demand. If it is less than 10% of total sales Tesla will not make it but instead use the 3.4Ah cells to make less costly and less heavy 60kwh and 85kwh packs.

Future larger Tesla models such as a minibus, a truck or a more conventional looking SUV will be less aerodynamic and heavier. They will probably need a 105kwh pack to get a 265 miles range EPA rating just as the 85kwh Model S. They will probably be using the 4Ah cell and a larger and stronger frame than the Model S/X. However, I now believe that Musk prioritizes getting the Model E with a smaller frame than the Model S/X done before making larger and more expensive vehicles. Musk must focus on making a car that will keep Tesla as the volume leader in terms of kwh because that will enable him to have lower costs than other car makers and therefore be more profitable. And the lower priced Model E is the best way to maintain Tesla's volume leadership.