Published on February 27th, 2014 | by Roy L Hales


Tesla Gigafactory: Here’s The Plan

February 27th, 2014 by  

Tesla Gigafactory locations

Originally published on The ECO Report.

Tesla has released some preliminary plans. The rumours about it looking at sites in New Mexico and Nevada were correct. There are also potential locations in Arizona and Texas. Tesla is making a final site selection and hopes to start construction on the Gigafactory this year. By 2020, it hopes to be producing 500,000 vehicles a year, with its batteries coming from its Gigafactory.

Tentatibe Schedule – Courtesy Tesla Motors

Tesla estimates it will need $4 billion to $5 billion to do this. It intends to raise $1.6 billion by selling bonds, but has also been looking for partners. That may explain meetings with high-profile companies like Apple. (As Bloomberg puts it, Apple has $158 billion burning a hole in its pocket and “could do worse than to become synonymous with the current ‘it’ company in tech and automaking.”) Rumour has it that Panasonic and Sanyo may each put in a billion.

By 2020 Tesla hopes to br producing as many lithium Ion batteries as the entire world does now - Courtesy Tesla Motors

In its press release, Tesla says:

As we at Tesla reach for our goal of producing a mass market electric car in approximately three years, we have an opportunity to leverage our projected demand for lithium ion batteries to reduce their cost faster than previously thought possible. In cooperation with strategic battery manufacturing partners, 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.

The Gigafactory is designed to reduce cell costs much faster than the status quo and, by 2020, produce more lithium ion batteries annually than were produced worldwide in 2013. By the end of the first year of volume production of our mass market vehicle, we expect the Gigafactory will have driven down the per kWh cost of our battery pack by more than 30 percent.

Battery Production flow chart – Courtesy Tesla Motors

After the batteries are finished, they will be shipped back to Fremont, where Tesla will continue to assemble finished vehicles.

This is all speculation, of course, but is anyone willing to bet Elon Musk won’t do it?

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About the Author

is the President of Cortes Community Radio , CKTZ 89.5 FM, where he has hosted a half hour program since 2014, and editor of the the ECOreport, a website dedicated to exploring how our lifestyle choices and technologies affect the West Coast of North America. He writes for both writes for both Clean Technica and PlanetSave on Important Media. He is a research junkie who has written over 1,600 since he was first published in 1982. Roy lives on Cortes Island, BC, Canada.

  • MorinMoss

    WHY are they looking to build it outside CA?

    • doc3osh

      Land value in CA is too high, plus it’s a terrible business environment.

  • Terry

    I wonder if they will consider looking at the lithium vanadium phosphate battery chemistry which appears to offer some serious benefits regarding performance including distance between charges and recharging time compared to traditional Li ion chemistry

  • Chris_in_Raleigh

    Any clues as to why the battery factory won’t be closer to the car factory? Must be something compelling to outweigh the transportation cost.

    Maybe more solar and wind?
    Maybe transporting back to Fremont on new electric trucks? Or by hyperloop? 🙂
    Maybe to push Texas to allow the direct sale of Tesla cars by creating a ridiculous situation where the factory workers aren’t allowed to buy what they manufacture?

    • Adam Devereaux

      Or maybe they could use electric semi’s that runs off the stored power in the transported batteries? A single semi could hold enough batteries to run across the country. If they are charging these with onsite solar energy you could be looking at a nearly carbon free transport system.

      Of course the problem is you have to get the semi back to the factory but presumably the semi could have a built in pack large enough for the empty journey home.

    • Tio Ricardo

      I’m in Texas, and I would love to see the legislators coming to Elon, hats in hand, asking forgiveness and would he please consider building the gigafactory here, hee hee hee!

      • Bobby

        that would be beautiful…i’d go to the ground breaking of a Texas gigafactory just to see them kowtow to musk; musk has said a hundred gigafactories will be needed, so Texas, even though it lost the first round, might come up when musk needs more supply in 6-8 years

    • doc3osh

      As you’ve probably now heard (since your post is a month old), Texas is out because of the direct-sales ban… My guess though would be that politically, Elon would like cache in the states that matter. California, Texas and Florida give him pull with more House members than any other state. (He’d have the biggest Dem state, biggest Repub state and biggest Swing states all covered.) CA is covered via headquarters of both companies. FL is pretty well covered as well but also would not make sense for this project due to the long distance… Texas was probably ideal, especially since most of the lithium will probably come up from Bolivia… but maybe building it in a state where he can’t sell the cars was too much to swallow…

      • Bob_Wallace

        We’ve got lithium here in the US. At least one plant is starting back up. (We produced prior to China undercutting prices and taking over what limited market there was at the time.)

        Texas, at least Governor Goodhair, is starting to waver on the direct sales ban. Same with AZ.

    • Bobby

      Supply of basic materials is key and…LITHIUM is actively mined in Nevada (may have as much as 30M metric
      tonnes of lithium carbonate, which would be enough for more than 100
      million Tesla Model S 85kWh batteries).

      because: supply

  • Graphite Gus

    The first shot has been fired in the great battery price/performance war. Will the Asian manufacturers stand still? (to repeat, there is 30X more graphite in a lithium ion battery than lithium)

  • Tio Ricardo

    !! Roy, did you really misspell ‘Elon Musk’ in a Tesla article?
    And in your bio, “theecoreport” is spelled ‘echo?’ Someone need coffee over there? 🙂

    • ha, i didn’t even see that when reading over it. simple typo. corrected.

      website error should probably be corrected too 😀

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