Tesla reports a worse than expected loss $282.3m

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Originally Posted By: KrisZ
The batteries will most likely be produced in China, in Panasonic factories and imported to Nevada for assembly. Hence the alliance with Panasonic.

If Gigafactory only design/assemble battery cells to make battery packs for cars and Powerwall and Powerpack for home and commercial storage, then they don't need to be that big and cost $5B.

Quote:
“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.


Originally Posted By: wikipedia
Tesla expects that Gigafactory 1 will reduce the production cost for their electric vehicle battery and Powerwall and Powerpack packs by 30%. Its projected capacity for 2020 is 35 gigawatt-hours per year of cells as well as 50 GWh/yr of battery packs.[7] To achieve this the factory would employ approximately 6,500 people and supply 500,000 Tesla cars per year.[8][9][10]

They may import some battery cells, probably 15 GWh(the difference between 35 GWh of cells and 50 GWh of packs)

Originally Posted By: wikipedia
In July 2014, it was announced that Panasonic had reached a basic agreement with Tesla Motors to invest in the factory.[11][12] Panasonic will lead the battery cell production portion of the manufacturing, and Tesla Motors CEO Elon Musk has indicated that the total Panasonic investment would be US$1.5–2 billion.[13] In early 2016 Panasonic president Kazuhiro Tsuga confirmed a planned total investment of about $1.6 billion by the company to construct the factory to full capacity.[14]


https://en.wikipedia.org/wiki/Gigafactory_1
 
Originally Posted By: KrisZ
The batteries will most likely be produced in China, in Panasonic factories and imported to Nevada for assembly. Hence the alliance with Panasonic.


Maybe most of them yes, but by spending $60 million they signal that some cell production will happen in Nevada too. It's probably much cheaper to make them in Asia though, around 80 % of automotive li-ion cell production is located in China, South Korea and Japan.
 
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The Gigafactory is huge but the building alone doesn't cost more than $1B to build. Most of the $5B are for tool/equipment to produce battery cells and packs.

I think most battery cells Tesla needs are make in this factory, but they may not be able to make all cells they need, so they may import some.

As of now almost 100% Li-on battery cells(for all applications) are made in Asia mostly in China, Gigafactory is 1 of the first factories outside Asia to make Li-on cells.
 
Quote:
Tesla Motors Inc. has secured a North American supply of lithium hydroxide through a long-term contract with mining company Bacanora Minerals Ltd. and Rare Earth Minerals PLC, giving the electric car maker a key base material used to produce lithium-ion batteries used its electric vehicles.


http://www.wsj.com/articles/tesla-secure...tory-1440767689

Quote:
On the edge of the Nevada desert, Tesla, the electric carmaker, is building the world’s largest battery plant.

The mile-long, so-called Gigafactory is expected to boost demand for lithium, the raw material used in the batteries that power most electric cars.

But the company has yet to announce any lithium supply deals with big producers, leaving it unclear where it will source the lightweight natural material it will need to start producing batteries by 2017 with Panasonic, its partner.


http://www.ft.com/cms/s/0/4a924a64-99df-11e5-987b-d6cdef1b205c.html
 
Originally Posted By: HTSS_TR
Tesla Motors Inc. has secured a North American supply of lithium hydroxide through a long-term contract with mining company Bacanora Minerals Ltd. and Rare Earth Minerals PLC, giving the electric car maker a key base material used to produce lithium-ion batteries used its electric vehicles.


A company that is yet to mine and produce a single pound of lithium. They are only involved in the Sonora Lithium project, which is an exploratory and who knows what the production may or may not be. So Musk so far has secured a bunch of hot air.

Quote:
Bacanora Minerals is an AIM and TSX listed company focused on becoming a large scale supplier to the fast growing global lithium-ion battery market.


http://www.bacanoraminerals.com/
 
Originally Posted By: Nebroch
Originally Posted By: KrisZ
The batteries will most likely be produced in China, in Panasonic factories and imported to Nevada for assembly. Hence the alliance with Panasonic.

Maybe most of them yes, but by spending $60 million they signal that some cell production will happen in Nevada too. It's probably much cheaper to make them in Asia though, around 80 % of automotive li-ion cell production is located in China, South Korea and Japan.

It's clearly the intention of Gigafactory is to produce Li-on battery cells, that why Tesla and Panasonic spend $5B for the factory.

Now, the supply of Lithium is another question. Tesla may be able to get some Lithium within US border by an American mining company, or they may have to import some Lithium from South America countries.

Quote:
America finds massive source of lithium in Wyoming

The U.S. currently imports more than 80% of the lithium it uses, with the silvery metal winding up in batteries from cell phones to electric cars.

According to a United States Geological Survey publication on lithium, “The only commercially active lithium mine in the United States was a brine operation in Nevada. The mine’s production capacity was expanded in 2012, and a new lithium hydroxide plant opened in North Carolina. Two companies produced a large array of downstream lithium compounds in the United States from domestic or South American lithium carbonate, lithium chloride, and lithium hydroxide. A U.S. recycling company produced a small quantity of lithium carbonate from solutions recovered during the recycling of lithium ion batteries.”


Quote:
University of Wyoming researchers found the lithium while studying the idea of storing carbon dioxide underground in the Rock Springs Uplift, a geologic formation in southwest Wyoming. University of Wyoming Carbon Management Institute director Ron Surdam stated that the lithium was found in underground brine. Surdam estimated the located deposit at roughly 228,000 tons in a 25-square-mile area. Extrapolating the data, Surdam said as the uplift covered roughly 2,000 square miles, there could be up to 18 million tons of lithium there, worth up to roughly $500 billion at current market prices.


Quote:
As a yardstick, the lithium reserves at Silver Peak, Nevada, the largest domestic producer of lithium total 118,000 tons in a 20-square-mile area. The University of Wyoming stated that in a best-case scenario, the Rock Springs Uplift’s 18 million tons of potential lithium reserves is equivalent to roughly 720 years of current global lithium production.


http://www.mining.com/web/america-finds-massive-source-of-lithium-in-wyoming/
 
If Tesla could not source Lithium in America, they can import it from 1 of the 3 countries in South America that have most known reserves of lithium in the world.

I don't think Tesla will have difficult time importing Lithium from either Argentina, Chile or Bolivia as long as they pay market price.

If thy sign long tern contract importing thousands of tones a year they may get volume discount ?

Originally Posted By: nbcnews.com
South America's 'lithium triangle'

Argentina, Chile and Bolivia hold the planet's largest reserves of lithium, the world's lightest metal and a key component in batteries used to power a range of technologies from cell phones to laptops to electric cars. Industrial production from countries in this so-called "lithium triangle" is already high. Chile is the world's leading source of the metal, turning out around 40 percent of global supply, and Argentina is also a significant producer. Output from the Andes may soon rise after Bolivia - the country that holds an estimated 50 percent of the world's lithium reserves


http://photoblog.nbcnews.com/_news/2013/...m-triangle?lite
 
Originally Posted By: badtlc
more hits coming tesla's way: http://amp.timeinc.net/fortune/2016/05/16/tesla-cheap-labor/?source=dam


So the company that was contracted to perform the job is under paying the employees, but the article headline is written to imply that they were direct employees of Tesla. Another sensationalized article by SJMN.

No one in Silicon Valley does projects like this with in house labor. And in this area most of the big name contractors are booked solid. And if they are available they charge a ridiculous amount of money.
 
Originally Posted By: Sunnyinhollister


So the company that was contracted to perform the job is under paying the employees, but the article headline is written to imply that they were direct employees of Tesla. Another sensationalized article by SJMN.

No one in Silicon Valley does projects like this with in house labor. And in this area most of the big name contractors are booked solid. And if they are available they charge a ridiculous amount of money.


Plausible deniability doesn't make them saints. You are being willfully ignorant if you think Tesla had no idea what was going on.
 
Originally Posted By: badtlc
Originally Posted By: Sunnyinhollister


So the company that was contracted to perform the job is under paying the employees, but the article headline is written to imply that they were direct employees of Tesla. Another sensationalized article by SJMN.

No one in Silicon Valley does projects like this with in house labor. And in this area most of the big name contractors are booked solid. And if they are available they charge a ridiculous amount of money.


Plausible deniability doesn't make them saints. You are being willfully ignorant if you think Tesla had no idea what was going on.


So when you hire a contractor company for your house, you know what they are paying each and every employee?

How about when you go to the grocery store? Get an oil change? IT or tax consultant? Day care provider?

I would say you are the one being "willfully ignorant" since you've made up your mind without all the facts.
 
Originally Posted By: Sunnyinhollister

So when you hire a contractor company for your house, you know what they are paying each and every employee?

How about when you go to the grocery store? Get an oil change? IT or tax consultant? Day care provider?

I would say you are the one being "willfully ignorant" since you've made up your mind without all the facts.


When I hire a subcontractor I'm required to pull their entire financials including credit history. I also have to get full safety records, bonding info, etc. I get a full details of who they hire, where they are from, etc. So yes, when I hire a subcontractor for a $7 billion dollar project that I'm working on I know just about everything there is to know about them and their employees because I'm responsible for them to my client.
 
Originally Posted By: badtlc
Originally Posted By: Sunnyinhollister
So the company that was contracted to perform the job is under paying the employees, but the article headline is written to imply that they were direct employees of Tesla. Another sensationalized article by SJMN.

No one in Silicon Valley does projects like this with in house labor. And in this area most of the big name contractors are booked solid. And if they are available they charge a ridiculous amount of money.

Plausible deniability doesn't make them saints. You are being willfully ignorant if you think Tesla had no idea what was going on.

If you do some research you will find that may writers praised Tesla for handling this problem, and many slammed Tesla hard.

This is the fact: Testa hired contractor Eisenmann, this contractor hired sub-contractor ISM Vuzem, this sub-contractor hired some workers from Eastern Europe to do the job in Tesla plant.

There is no evidence Tesla knew these workers were underpaid by the sub-contractor ISM Vuzem.

Very hash opinion about this problem from SJMN (San Jose Mercury News):

Quote:
The betrayal by Tesla is especially disappointing.
...
If respected companies like Tesla are engaging in this practice, who else is out there?


http://www.mercurynews.com/opinion/ci_29...rce=infinite-up

One of the comments about this article:

Originally Posted By: apply a little reason
Way to bring out the backhanded compliments. No doubt the author of this piece is the first to take umbrage with any Tesla build issues, but now there is a juicy story about employment law to peddle, Tesla is conveniently put on a pedestal so as to cause maximum damage to their reputation.

"The betrayal by Tesla is especially disappointing. The cutting-edge car maker was regarded as the role model for bringing manufacturing jobs back to California."

All the while no investigation has concluded that Tesla has knowingly done anything illegal or immoral. What we do have though is a CEO who when presented with something wrong, consistently does the right thing and takes swift action to resolve the problem.

How about writing a more reasoned article that reflects the facts known to date instead of writing slanderous trash to serve your own agenda you miserable excuse for a journalist.

If you search "Tesla hourly pay workers" you will find that Tesla hourly workers are 1 of the highest paid in auto industry, if not the highest paid. If Tesla is responsible for contractor and subcontractor and sub-subcontractor workers' pay, then they could not have time to do anything else.


Another writer of marketwatch.com wrote:

Quote:
Tesla Motors Inc on Monday said it would investigate reports that foreign subcontractors at its Silicon Valley auto plant were paid as little as $5 an hour.

If true, “that is totally unacceptable,” Tesla said in a statement.

“Tesla expects all its contractors and their subs…to comply with all applicable pay laws,” the company told the Mercury News.


Quote:
The Mercury News detailed the story of one Slovenian worker who was severely injured in 2015 after falling 30 feet onto the factory floor. He is suing Tesla, its German construction contractor Eisenmann SE, and Eisenmann’s Slovenian subcontractor, ISM Vuzem—all of whom denied legal responsibility for his injuries—for unspecified damages. The worker claimed his job was in violation of B1 visa requirements, and cited violations in wage and employment laws. The suit claims the foreign workers are owed $2.6 million in overtime and wages.

Tesla co-founder and Chief Executive Elon Musk said in a tweet that he only heard of the claims Monday. “Sounds like the wrong thing happened on many levels,” Musk wrote. “Will investigate and make it right.”


Quote:
In Monday’s statement, Tesla vowed to get to the bottom of the report. While the company claimed it followed the law and had been cleared by a judge of responsibility for the worker’s injury, it said there is a larger matter at stake.

“This is not a legal issue, it is a moral issue,” Tesla said. “We need to give [the injured worker] the benefit of the doubt and we need to take care of him. We will make sure this happens. We do not condone people coming to work at a Tesla facility, whether they work for us, one of our contractors or even a sub-subcontractor, under the circumstances described in the article.”

“If the claims are true, Tesla will take action to ensure that the right thing happens and all are treated fairly,” the company’s statement read.


http://www.marketwatch.com/story/accused...ight-2016-05-16

And another write of the same problem:

Quote:
Mercury News alleged that Tesla contractor Eisenmann and a subcontractor ISM Vuzem hired more than 140 workers from Eastern European countries and paid them as little as $5 an hour to build a car-painting facility in California.

One such worker, Gregor Lesnik, is attempting to sue his employers after reportedly falling three stories while building the Tesla facility and breaking both his legs.

Tesla, which is known for its higher-than-average hourly wages, said if the claims against its contractors are true, they are "totally unacceptable."

"Assuming the article is correct, we need to do right by Mr. Lesnik and his colleagues from Vuzem," Tesla wrote on Monday. "This is not a legal issue, it is a moral issue."


Quote:
Tesla says various authorities investigated Lesnik's incident and found it not responsible for compensation or injuries. However, the company noted that it will "do the right thing" if the claims are true. CEO Elon Musk took to Twitter (TWTR), saying he learned of the incident on Sunday.

"Morally, we need to give Mr. Lesnik the benefit of the doubt, and we need to take care of him. We will make sure this happens," Tesla said, in the statement.


http://finance.yahoo.com/news/tesla-calls-cheap-labor-dispute-180214353.html
 
Originally Posted By: Sunnyinhollister

So when you hire a contractor company for your house, you know what they are paying each and every employee?

How about when you go to the grocery store? Get an oil change? IT or tax consultant? Day care provider?

I would say you are the one being "willfully ignorant" since you've made up your mind without all the facts.

Originally Posted By: badtlc
When I hire a subcontractor I'm required to pull their entire financials including credit history. I also have to get full safety records, bonding info, etc. I get a full details of who they hire, where they are from, etc. So yes, when I hire a subcontractor for a $7 billion dollar project that I'm working on I know just about everything there is to know about them and their employees because I'm responsible for them to my client.

I hired a contractor to repair termites damage to my previous house in Irvine 2 years ago, I only look at the contract of all the repairs they would do and the cost, I signed the contract without knowing they hired a subcontractor to do the actual works and I didn't know how much the actual workers got paid from the subcontractor. Was that my job to know they got paid fairly ? And how do I know which is fair ?

By laws, do the individual or company responsible for the contractor and/or subcontractor worker's compensation ?
 
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San Jose Mercury News printed the respond from Tesla.

Originally Posted By: mercurynews.com
At Tesla, we aspire to operate on the principles of hard work and exceptional performance, but always tempered by fairness, justice and kindness. There are times when mistakes are made, but those are the standards to which we hold ourselves. With respect to the person at the center of this weekend's article in the Mercury News, those standards were not met. We are taking action to address this individual's situation and to put in place additional oversight to ensure that our workplace rules are followed even by sub-subcontractors to prevent such a thing from happening again.


Originally Posted By: mercurynews.com
Gregor Lesnik was brought to the Tesla factory by a company called ISM Vuzem, a sub-contractor brought in by Eisenmann, the firm that we hired to construct our new, high-volume paint shop. We contracted with Eisenmann for the simple reason that we do not know how to build paint shops and they are regarded as one of the best, if not the best, in the world. In our dealings with them, we have found them to be an excellent company, run by good people.

Assuming the article is correct, we need to do right by Mr. Lesnik and his colleagues from Vuzem. This is not a legal issue, it is a moral issue. As far as the law goes, Tesla did everything correctly. We hired a contractor to do a turnkey project at our factory and, as we always do in these situations, contractually obligated our contractor to comply with all laws in bringing in the resources they felt were needed to do the job.


Originally Posted By: mercurynews.com
Regarding the accident that resulted in Mr. Lesnik being injured, Cal/OSHA (the government regulator that investigates workplace accidents like these) came to our factory, investigated the incident and found that Tesla was not responsible. When Mr. Lesnik brought a workers compensation case, Tesla was dismissed from the case because the judge concluded that we had no legal responsibility for what occurred.

All of that is fine legally, but there is a larger point. Morally, we need to give Mr. Lesnik the benefit of the doubt and we need to take care of him. We will make sure this happens. We do not condone people coming to work at a Tesla facility, whether they work for us, one of our contractors or even a sub-subcontractor, under the circumstances described in the article. If Mr. Lesnik or his colleagues were really being paid $5 an hour, that is totally unacceptable. Tesla is one of the highest paying hourly employers in the US automotive industry. We do this out of choice, because we think it is right. Nobody is making us do so.


Originally Posted By: mercurynews.com
Tesla will be working with Eisenmann and Vuzem to investigate this thoroughly. If the claims are true, Tesla will take action to ensure that the right thing happens and all are treated fairly.

Creating a new car company is extremely difficult and fraught with risk, but we will never be a company that by our action does, or by our inaction allows, the wrong thing to happen just to save money.


http://www.mercurynews.com/business/ci_29898960
 
Originally Posted By: HTSS_TR


I hired a contractor to repair termites damage to my previous house in Irvine 2 years ago, I only look at the contract of all the repairs they would do and the cost, I signed the contract without knowing they hired a subcontractor to do the actual works and I didn't know how much the actual workers got paid from the subcontractor. Was that my job to know they got paid fairly ? And how do I know which is fair ?

By laws, do the individual or company responsible for the contractor and/or subcontractor worker's compensation ?


You cannot compare commercial to residential. Legally, they are completely different animals.

And tesla's reactions are purely PR. They are doing this because they got caught. They knew what was going on from the get go. There is no way they didn't unless they had completely inept people in charge of executing their contracts.
 
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