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Tesla’s ‘Gigafactory’ To Produce More Than Car Batteries

| Tuesday March 4th, 2014 | 2 Comments

Tesla MotorsLast week, Tesla announced that it would build a new “Gigafactory” to produce lithium-ion batteries at a rate able to support the manufacture of 500,000 electric cars per year. By 2020, the plant will be capable of producing as many lithium-ion batteries as the entire world produced in 2013.

The Gigafactory, Tesla says, will support 6,500 jobs directly, and according to a post on the company’s blog, the company expects that volume manufacturing of its mass-market vehicle will drive down the cost-per-kWh of its batteries by 30 percent in the first year.

The mass-market vehicle, yet to be released, will be designated the Model E. According to a report in TechCrunch, it will be 20 percent smaller than the current Model S, with a target range of 200 miles. While that’s fewer than the maximum range of the Model S, it’s ahead of any other pure EV currently on the market. Cheaper batteries may be crucial in cutting costs sufficiently to allow the company to produce the more affordable car, but the new factory also plays into more diverse plans for the company.

Last week, the San Francisco Chronicle reported that as well as supporting vehicle battery production, documents filed with the Securities and Exchange Commission detailed that some of the lithium-ion batteries will be used for “stationary storage applications;” that is, batteries for storing energy for use in homes, commercial sites and utilities.

This makes sense, since Elon Musk, as well as heading Tesla, is also the chairman of California-based Solar City, an installer of solar energy systems to homes and businesses with a national reach. The Chronicle reports that the market for grid-scale storage could reach $30 billion by 2022, and a Morgan Stanley report published recently, argues the company could seize a commanding role in the the energy storage industry. Evidently, the new factory is more forward-thinking than just meeting EV production goals.

In the meantime, the location of the Gigafactory has yet to be determined, though Tesla has announced it will be in one of four possible states: Nevada, Arizona, Texas or New Mexico. According to USA Today, these “finalists” were chosen because each has both the climate and terrain suited for Tesla’s plan to power the factory largely with a sprawling farm of solar panels and wind turbines. The plant will need up to 1,000 acres, or close to 2 square miles.

USA Today reports that competition among the four states has set off a bidding war to try to attract Tesla’s business, stating that incentives being offered could reach new heights–including $200 to $400 million for site infrastructure and worker job training, and $300 to $600 million in tax breaks.

The choice of the winning state could also set up an interesting opportunity for Tesla to leverage some marketing opportunities, too. Many states, have challenged the legality of Tesla’s direct-to-customer sales model, whereby the company side-steps dealership involvement in the sales process. Lawsuits have been filed in many states based on existing automotive franchise laws, and Texas is one such state that has disallowed the company to sell to customers directly. USA Today suggests Tesla might demand the state change its laws to take dealer middlemen out of the equation as part of a winning deal.

But wherever the factory lands, it will be expensive. Tesla plans on selling $1.6 billion in bonds to help finance the plant; the company will invest $2 billion, while speculation exists that Tesla’s existing battery partner, Panasonic, might pitch in another $1 billion as well.

Image Credit: Sam Felder

Follow me on Twitter: @PhilCovBlog


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  • Jim5437532

    The giga factory scheme could make or break Tesla. First Tesla should fix it is dirty little secrets, fire hazards.

    Tesla should relocate the traction battery to a safer place and better protect their batteries, before they start mass production.

    Lithium batteries are more likely to catch fire or and explode when punctured, then gasoline tanks. Customers of Nissan Leafs, Chevy Volts & Toyotas Rav4EV allegedly haven’t had any fires from road debris or vehicle accidents; yet Tesla has recently had three.

    There is a moral crisis at Tesla. Tesla needs to improve safety

    The fact is Teslas are a fire & EXPLOSION hazard. Safety is not a top priority for Tesla.

    3 Tesla traction batteries have caught fire. 2 Tesla traction batteries caught on fire after only running over road debris. 1 Tesla caught on fire & EXPLODED after an accident in Mexico.

    Allegedly the fire department said a Tesla model S. was the source of a garage fire in Toronto. At this time the specific cause is unknown. The traction battery and charger isn’t thought to be the cause.

    In the garage fire in orange county California a Tesla model S. charger connection is suspected by the fire department.

    Tesla Motors model S. charge connections have been overheating, melting and burning for about a year possibly longer, yet Tesla Motors has not resolve the problems. Since Tesla Motors did not resolve the problems, people went to the media and government. With pressure from the media and NHTSA Tesla finally issued a recall for about 30,000 model s. to replace the adapters new adapters with a thermal fuse. The thermal fuse is a step in the right direction, but there still seems to be an underlining fire hazard, since some of Tesla connectors don’t seem to be sufficient to carry the current for an extended time. Tesla Motors issued a software update and touted it a “fix”. The so-called “fix” did not work, charge connectors have continued to overheat, melt and burn. Though Tesla (Elon Musk) promised that the adapters would be mailed within two weeks, over a month later customers still have not received the replacement adapters with the thermal fuse. Almost all Teslas are under recall and are a fire hazard. Some customers claim under some circumstances the so-called “fix” can increase current and fire hazard when a fault is detected. The so-called “fix” seems to have a glitch that sometimes is a fire hazard.

    I think Tesla Motors recklessly located the lithium traction battery too close to the ground without enough protection.

    Tesla Motors is lagging behind in technology. Tesla Motors is reactive instead of proactive.

    Tesla Motors and Tesla fan boys are hostile toward safety advocates, critics and skeptics. Tesla and Tesla fan boys are bullies, slanderers & liars. Tesla Motors and Tesla fan boys resort to intimidation and censorship to suppress criticism, skepticism of the truth. Tesla fan boys are hatemongers. Tesla fan boys shill for Tesla.

    Regretfully for the most part the media has been shilling for Tesla Motors. The media needs to hold Tesla Motors accountable. The media needs to scrutinize and investigate Tesla.

    Will Tesla’s faulty designs result in deaths before people wake up and smell the coffee?

  • http://www.triplepundit.com Nick Aster

    Although this is great news, I’m disappointed that Tesla wants to take up so much land with this facility. This means it’s pretty much guaranteed to be in a rural area or the suburban fringe which doesn’t do much for urban employment or sustainability.