We first heard about Tesla’s plans to build a battery “gigafactory” last year, but now the EV manufacturer has released new information about the project.
Together with “strategic battery manufacturing partners”, Tesla Motors plans to invest $5 billion (€3.65 billion) in a large scale factory that would ultimately drive down the cost of lithium-ion batteries and allow the company to reach its goal of producing a mass market electric car in three years’ time.
“We’re planning to build a large scale factory that will allow us to achieve economies of scale and minimize costs through innovative manufacturing, reduction of logistics waste, optimization of co-located processes and reduced overhead,” Tesla says in a press statement.
The plan is very ambitious: by 2020, the Gigafactory is projected to produce 500,000 lithium ion batteries annually, which is more than last year’s overall global production of batteries. Furthermore, by the end of the first year of volume production of its upcoming mass market electric vehicle, Tesla expects the Gigafactory to have driven down the per kWh cost of the battery pack by more than 30 percent.
The company says the plant will occupy up to 10 million sq-ft (929,030 square meters) and will hire approximately 6,500 people. The company has also announced that there are four states competing to host the Gigafactory: Texas, New Mexico, Arizona and Nevada.
From the Gigafactory, battery packs will be sent to Tesla’s vehicle assembly plant in Fremont, California, so Nevada and Arizona may have a geographical advantage.
Tesla will fund $2 billion (€1.46 billion) of the total investment, of which $1.6 billion will come from a bond issue.
By Dan Mihalascu