Commercial diligence support on a Gigafactory

in the United States

SITUATION: A provider of business-to-business financial solutions was evaluating an investment into the construction of a Gigafactory in the U.S. The client hired S&P Global Commodity Insights (SPGCI) to evaluate the potential of its investment into the target focusing on competitive positioning, benchmarking, and assessing the critical economic factors impacting the project as well as the risks and profitability of the factory.
OUR APPROACH:

SPGCI analyzed the value chain, battery market, cell technology, pricing scenarios, and raw materials supply.

SPGCI developed a cell, module, and pack cost analysis, by building out a bottom-up model of production costs.

SPGCI modeled module production costs for over 100 factories globally in Europe, Asia, and North America in years 2025 and 2030, providing a cost curve and relative profitability of the plants

In addition, we compared the factory’s financial assumptions and reviewed the target’s offtake and supply documentation to carry out a red flag analysis.

IMPACT:

Our recommendations enabled our client to –

Evaluate the market potential and profitability of cell and module production in the U.S., compared to the global market price
Identify the key risks associated with financing the factory buildout and reach a decision on investing in the Gigafactory