Where Tesla Will Build The Next Gigafactory!

Let’s talk GigaFactories. These advanced manufacturing plants will form the backbone of Tesla’s infrastructure over the coming years as they work to scale production up to levels that Elon Musk has called ‘extreme size.’

So far this year, we’ve seen two brand new Gigafactories come on line and begin customer deliveries. And over the coming months we’ll be eagerly watching the ramp up of production capacity in Berlin and Austin. But we know that Elon and Tesla aren’t going to rest with the status quo, they’re probably not even going to take much of a break before another factory begins construction somewhere. Or maybe more than one… Tesla just got off building two factories at the same time, would they make it three? But where in the world would all of that construction take place?

Well, there are a few things that we know. There are many more things that we think we know. And there are still more things that we know we don’t know, but will talk about anyway. So let’s try and figure out where Tesla will build their next GigaFactory.

Indonesia

We begin our journey around the world with a speculative stop in Indonesia. Elon Musk recently hosted a delegation of Indonesian officials at Giga Texas, and from all that we’ve seen and heard about the meeting, they all got along swimmingly.

Now, Indonesia is obviously not prime real estate for a car factory, but there is a lot going on between Elon and this Southeast Asian government, they have a bit of a history and there is some stuff in here that might surprise you - one thing that surprised me.

On April 26th, Indonesia’s Minister for Economic Affairs met with Elon to reportedly discuss Tesla’s potential for nickel mining and battery manufacturing in the country. Also present was a collection of business men and various state officials who seemed more than happy to meet Elon and laugh loudly at his bad jokes. 

Among that crew was mining company director Pandu Sjahrir , who told reporters at the Jakarta Globe, "Elon is very enthusiastic about discussing Indonesia and the progress of Indonesia's nickel and electric vehicle industries. Hopefully, this meeting can bring more high technology investments to Indonesia, and Indonesia can become an important part of the global electric vehicle industry supply chain."

Speaking of nickel, Indonesia is sitting on the largest known nickel reserve in the world - and their mining industry is also the largest producer of nickel in the world. The United States Geological Service reported Indonesia's nickel reserves to be 21 million metric tonnes, compared to the global reserve of 89 million tonnes - and they’re able to produce up to 800,000 tonnes annually.

So there's a good reason why these folks have Elon’s special attention. Because we know how much the man loves nickel - Elon has made public appeals to the resource companies of the world to please produce more nickel. This is a critical ingredient in the company’s new 4680 battery cell chemistry - to produce a massive amount of vehicles, Tesla will need an equally massive amount of nickel. But we also know that Elon is proactive, he’s not going to sit around and wait for resources to come to him, he’s going to go out and secure them on his own. Tesla's ongoing project in New Caledonia is a great example of that.

And this quote from the chairman of the Indonesia Chamber of Trade and Industry makes it clear that the nation is in line with Elon’s vision for sustainability. He said, "Our goal is to convince Tesla to explore cooperation with Indonesia regarding the nickel supply and processing to make battery cells based on good and sustainable environment, social, and governance." Obviously some nuance is lost in translation there, but we get the key points.

This isn’t the first time that Elon and the Indonesians have been through this conversation, the same reports came up almost exactly one year ago about a potential nickel deal between the two, but for whatever reason, that all fell through. Of course, that was before Russia decided to go ahead and destabilize the global economy. So it’s not surprising to see Elon back at the negotiation table.

And we know that the Indonesians are putting in serious effort to court Elon Musk, not only are they willing to pretend his jokes are funny, the president of Indonesia has personally offered to give Elon an island to use as a SpaceX launch site. This was reported by the BBC and later the New York Times, so it seems pretty legit, though it’s not something I’d heard of before. Indonesia is keen to see the island of Biak converted into a space port, apparently the government had considered building a launch facility there themselves back in the 80’s but it never panned out. Now they want Elon Musk to step in and carry out that vision. It is a prime location, basically right on the equator and with nothing but open ocean to the East. Though it’s also worth noting that this is not some deserted island, there are 100,000 Papuans living there on hereditary land, and they’re not as stoked about seeing the island used as a launchpad. I don’t blame them.

Do you think Tesla - or SpaceX - will be setting up shop in Indonesia anytime soon?

India

We can keep riding the speculation train to India, where there have been long standing rumors about Tesla setting up a new vehicle manufacturing plant. This was first set off by news that the company had incorporated a new unit called Tesla Motors India, and was hiring for top positions in the country.

In March of last year, India’s Transportation Minister said in an interview, quote “The government will make sure the production cost for Tesla will be the lowest when compared with the world, even China, when they start manufacturing their cars in India. We will assure that.”

Which sounds like a pretty sweet deal. Except at the same time, the Indians are deploying some hard ball tactics that ensured the cost to Tesla for not manufacturing in their country would be as painful as possible. 

Basically, India desperately wants to grow their economy and build more sustainable industry - which is totally fair. And their go-to tactic for incentivizing companies to make stuff in India is just to tax the living shit out out of any product that is not made in India.

In the case of Tesla vehicles, that tax is 110%. Pretty brutal. And obviously all but prohibitive to actually selling cars in that market.

In a more recent interview on May 2nd, the Transport minister offered his own solution, saying, “If Elon Musk is ready to manufacture in India, then there is no problem. Come to India, start manufacturing. India is a large market. They can export from India.”

The last that we heard on the matter from Elon Musk was in July 2021, he wrote on Twitter, “If Tesla is able to succeed with imported vehicles, then a factory in India is quite likely.”

So Elon doesn’t want to build the factory until after he starts selling cars. The Indians don’t want to let him sell cars until after he builds the factory… Doesn’t sound like there’s much room to meet in the middle there.

Giga Shanghai Part Deux

OK, if we’ve made it this far without rage quitting the video, then let’s talk about a ‘known know.’ Giga Shanghai, the sequel. And we’re very hopeful that this will be Empire Strikes Back of factory sequels. So the latest word is that Tesla will build another GigaFactory in Shanghai in more or less the same place as the current one.

The Reuters news agency has obtained a letter written by Tesla and sent to Chinese authorities on May 1st. According to that letter, quote, “The company will build a new plant on nearby land in the same area, which is poised to add an annual capacity of 450,000 cars, including Model 3s and Model Ys, becoming the world’s largest vehicle export hub.”

So that’s pretty wild. If the existing Shanghai factory were to just maintain its pre-lockdown production rate, the two together would equal one point 5 million cars per year. If the OG Giga Shanghai can continue to ramp up capacity like it has over the past year, then China could be producing well over 2 million Tesla vehicles per year.

From the same letter we know that Chinese officials are eager to help Tesla in any way that they can. The company extended their thanks to state owned company Lingang Group, which arranged buses to transport 6,000 Giga Shanghai workers and suppliers. Tesla added that the company also carried out the disinfection work needed to shift Giga Shanghai into a “closed-loop” system. Shanghai officials have kept Tesla’s GigaFactory a top priority for reopening and staying open, even as the national government imposed the strictest lockdowns in the world.

So this is obviously very good news to have all but confirmed - and this also sheds a very promising light on some other new information that we’ve just received.

Giga Berlin Part Deux?

Could there be a Giga Berlin sequel in the works as well? This tweet from Troy Teslike shows information from a German news report about Tesla purchasing more land around Giga Berlin.

Now, does that mean Tesla is obviously going to build a second factory there? Obviously not. They had a pretty rough time just trying to get the first one built, and it’s still to this day being protested against by fake environmentalists who are trying to get the whole thing shut down and canceled on a daily basis.

But stranger things have happened. I never would have predicted that Elon Musk would buy out Twitter.com in a hostile takeover and insert himself as the new CEO, but here we are…

The idea does have some merit - Giga Berlin is comparatively small against Giga Texas and will be dwarfed by a newly doubled up Giga Shanghai. With the recent developments of hostility between Europe and their previous energy supplier in Russia, the last few months have signaled a very abrupt transition for the EU away from oil and gas, with sustainable green energy being the most obvious choice. Tesla is sitting on a golden opportunity to supply the entire European Union with the exact solution they need to a very large problem. So the potential for growth in Berlin is infinite at this point - not just cars, but Powerwalls, Megapacks, solar panels, the whole library of Tesla products.

Which makes us wonder if the real plan isn’t just to take everything they are doing currently and double it up?

Giga Texas Part Deux?

The joke is getting old at this point, I know, but this is my last one. And it’s just to point out that Tesla owns a humongous amount of land around the Austin factory as well - they might have built one of the biggest buildings in the world there, but there is still plenty of room left for more. 

When Tesla forest acquired the land in Texas, they bought 2,000 acres. Since then there have been reports of Elon Musk related land purchases in the area that probably add up to another 1,000 acres. We know that Tesla owns everything between the highway and the river, and probably a large chunk of the land north of the factory. They also own that entire empty patch on the opposite side of the highway as well.

Obviously Giga Texas is the least likely candidate for an expansion because they haven’t even started to fill up the existing factory, most of it is just empty space waiting for Cybertruck and Semi production lines to go in. But thinking in the long term, you know they’re going to build something new out there.