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Tesla Plans $5 Billion Battery Factory for Mass-Market Electric Car
Tesla Motors said on Wednesday that it planned to invest about $2 billion in a large-scale factory to produce cheaper batteries for a mass-market electric car within three years.
The company, which makes all-electric luxury sedans, indicated that it would build the factory in the American Southwest, without specifying where. Nor would it name its partners, whom it said would invest up to another $3 billion in the factory through 2020.
Tesla said the factory would allow it to develop and cut the costs of its batteries for its vehicles more quickly, in part by producing finished batteries from metal ore instead of from components. Sales of its Model S sedan, which costs $70,000 and higher, have been constrained by a battery shortage, the company has said.
Analysts said that Tesla needs more batteries if it is to make its third-generation vehicle, an electric sedan that will be sold for less than $40,000. Panasonic currently makes batteries for the Model S.
The automaker expects to reduce the per-kilowatt cost of its battery packs by more than 30 percent by the end of the first year of volume production for its third-generation electric vehicle. At full production, the factory, known as the Gigafactory, would produce about 500,000 lithium-ion batteries annually by 2020, more than suppliers worldwide produced last year.
Nevada, Arizona, New Mexico and Texas are among the states Tesla said it was considering for the factory. The finished batteries would be shipped to Tesla’s assembly plant in Fremont, Calif.
The factory will cover 500 to 1,000 acres and employ up to 6,500 workers, the company said.
2020 Tesla Vehicle Volume 500,000/yr
2020 Gigafactory Pack Output 50 GWh/yr
At full production, the factory, known as the Gigafactory (lol), would produce about 500,000 lithium-ion batteries annually by 2020, more than suppliers worldwide produced last year.