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Tesla Plans New ‘Gigafactory’ To Supply Batteries for Half a Million Cars A Year

Posted By Paul Tate, February 27, 2014 at 5:53 AM, in Category: Factories of the Future

Innovative California-based carmaker Tesla Motors aims to build a massive new factory, covering up to 1000-acres, to secure the supply of lithium-ion batteries for the future of its electric vehicles.

The new facility, which Tesla calls a ‘Gigafactory’, will employ around 6,500 people and cost between $4-5 billion to build. Tesla will fund $2 billion of that cost, while its partners, possibly including current battery supplier Panasonic, will invest the rest. The company hopes the new facility will help reduce its battery costs by around 30%.

The factory is being designed to produce enough batteries to supply half a million cars by 2020, says the company. Tesla has already signed a deal with Panasonic for two billion battery cells over the next four years, but the company is still concerned this wont meet future demands.

Right now Tesla only builds one electric vehicle, the $70,000 Model S Sedan, but it plans to launch a new cross-over model later this year, and a mass-market vehicle by 2017, which is expected to boost demand for batteries significantly.

“With this facility, we feel highly confident of being able to create a compelling and affordable electric car in approximately three years,” noted Elon Musk, Tesla’s chief executive, in a recent report.

At full capacity, the new facility is expected to produce 50 gigawatt-hours of battery power a year, more than the total amount created worldwide today.

There are also innovative ideas on the horizon to use batteries more extensively as mobile power plants for domestic use, including solar power storage, and to help reduce business reliance on power from the grid.

Potential locations for the new factory in Nevada, New Mexico, Arizona and Texas are now being considered. 



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Written by Paul Tate

Paul Tate is Research Director and Executive Editor with Frost & Sullivan's Manufacturing Leadership Council. He also directs the Manufacturing Leadership Council's Board of Governors, the Council's annual Critical Issues Agenda, and the Manufacturing Leadership Research Panel. Follow us on Twitter: @MfgExecutive



Comments

Posted on
Here's an interesting take on this news from Sarwant Singh of Frost & Sullivan: http://www.forbes.com/sites/sarwantsingh/2014/02/27/elon-musks-500000-unit-battery-plant-myth-or-reality/
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