Tesla May Build "Giga Factory" to Ensure its Battery Supply after Model Expansion

Tesla Motors CEO Elon Musk said the EV maker may build a battery “giga factory” since there are not enough battery plants in the world to supply his planned Generation III electric car, scheduled to launch in 2016 or 2017.

Musk said the high-volume Generation III Tesla could bring the company’s annual sales to 500,000 a year, about 25 times its current sales volume. However, the biggest hurdle to hitting that ambitious sales target is the lack of batteries, the CEO said.

“If we are to produce 500,000 vehicles a year… we need cell capacity commensurate, which is bigger than all lithium-ion production today,” Musk was quoted as saying by The Wall Street Journal.

To solve that problem, he said Tesla is exploring a lot of different options, including a “giga factory” that would take raw materials and turn them into battery packs. Tesla could build such a plant with partners, and its location would most likely be in North America.

“We’re talking about something comparable to all lithium ion production in the world, in one factory,” Musk said, adding that raw materials like nickel, cobalt, aluminum and lithium would not be an issue.

He declined to offer a time frame for the plant, but if the project gets the green light, work would have to start pretty soon, given that the launch date for the new Tesla Generation III model is as early as 2016.

By Dan Mihalascu

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