Is Reno the Location of Tesla's $5B Gigafactory?

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July 31 (Bloomberg) -- Tesla Motors said it’s broken ground near Reno for a $5 billion battery plant, signaling Nevada has vaulted to the lead of five states vying for the so-called gigafactory and its promise of 6,500 jobs. Cory Johnson has more on "Bloomberg West." (Source: Bloomberg)


Are they good, not so good?


There were some numbers that were good and some numbers that were not good.

There were some things that were weird.

Let's give tesla credit where credit is due.

They showed a revival in sales.

The company has seen a decline in sales in a quarter over quarter basis.

March quarter going into june, you thought maybe in the early parts of summer they would sell even fewer cars.

Tesla saw an increase in the number of cars sold.

The sold about 1200 more model s cars, and that meant a 17% quarter over quarter increase.

They need to do that.

They have had a big target out there for annual sales in terms of units of 35,000. even the revenues are really hard -- a lot of times we look at companies and say, look at the number -- the revenue number, look at the earnings-per-share number.

In both cases, this can be weird with tesla because there is a dramatic shift from quarter to quarter.

They have to parcel that out over time.

When a car is sold, they collect that cash up front with a little bit left over for warranties they might be responsible for in the future.

The interesting stuff was there guidance about how many cars they're going to do.

They held to that 35,000 number, but they lower the number of cars they are expecting to make for the upcoming quarter.

What that really suggests is the fourth quarter for tesla looms so large, they will have to sell something like 14,000 cars in the fourth quarter, nearly twice as many as they have ever sold before in the fourth quarter, even though the car will not be any newer, will not be any more interesting than it is today.

And they are saying they will hit a run rate of 100,000 cars per year by the end of next year.

That is a lot more than they are doing right now.

Is that overly ambitious?

May be the bigger issue is not how many cars they can make, although that is a big issue, but how many cars can they sell.

Right now they are selling a car that costs an average of $125,000 per car last year.

It is an electric car with only so many charging stations, a fraction of gas stations in the world.

Now they are trying to build more charging stations, but they will never catch up to how many gas stations there are any time soon.

The question is, how big can this be when you are selling a car at this price?

Most major cars are updated every year.

This car has been out there -- a lot of people that want the tesla have the tesla.

More pipe -- people are buying them still.

To get to 35,000, they will have to get you a massive increase in demand they are not seeing yet.

What about the battery giga factory?

Will that help them produce more mass-market cars?

Did you learn anything about the model three-car?

What anyone says they will do something cheaper than they have ever done it before, i say call me when it is cheaper.

That aside, the giga-factory is seen as an important marker for tesla's future.

There is some weird stuff in the press release.

There is one sentence i want to read to you.

Here it is.

Pay careful attention to this.

"in june, we broke ground just outside of reno nevada, on a site that could potentially be the location for the gigafactory." so they broke ground, but it is a potential site of the factory.

They have some bulldozers pushing some dirt around, but they have not decided if that is where they're going to build anything.

It suggests to me that they are not very far along here.

They want to suggest to us that they are further along than they actually are.

Potential is all that have got with the gigafactory.

Go pro, its first report as a

This text has been automatically generated. It may not be 100% accurate.


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