How many gigafactories does Tesla have? So far, the electric car company has built two huge factories, and it’s planning to build at least three more of them in the near future!
If you’re not sure what they are or why Tesla would need so many of them, you’re not alone. Here’s everything you wanted to know about Tesla’s massive, $13.5 billion gigafactories – including some inside information that most people haven’t heard yet!
Inside the Tesla Gigafactory
So how big is Tesla’s Gigafactory? The fact that it took them two years to build it means that even they aren’t sure yet. When first conceived, Tesla estimated it would cost $4 billion, with a real-world price tag of around $5 billion. Now it looks like Musk was off by about half. But what does all that money get you? According to Elon Musk and Tesla, an incredible feat of engineering on a scale we can only begin to understand.
But what makes Tesla’s Gigafactory so massive? Its sheer size and production capabilities are impressive, but it’s not just about that. Tesla’s Gigafactory is designed to be fully automated from end to end, meaning there will be no human presence on-site except for security. Musk claims that his Tesla Motors plant in Fremont, California – where all Model S and X electric cars are built – is already fully automated, but with a staff of over 6,000 employees. That means fully half of his total employees work in Fremont while most of his other locations have less than 100 workers each.
Inside Tesla’s Gigafactory: But don’t expect to hear much about what goes on inside of Tesla’s Gigafactory. It is, after all, a manufacturing facility and not a retail centre. And since Tesla makes most of its money from patents rather than car sales – there will be plenty of interest from other automakers and battery manufacturers hoping to get their hands on some cutting-edge technology or learn how to build their own.
How it got started
Tesla founder Elon Musk is well known for taking huge, sometimes seemingly ridiculous risks. But Tesla’s gigantic $13.5 billion gigafactories might just be his biggest gamble yet. While it’s not unusual for high-tech companies to spend a lot of money on manufacturing facilities and machinery, $13.5 billion is an unprecedented amount for any company, especially one in an industry as mature as automobile manufacturing. And there’s a risk that no one else would have been willing to take that bet. With major players like Toyota and Ford working with established suppliers like Panasonic and LG Chem, how did Tesla manage to corner so much market share?
The company went to great lengths to make its gigafactories seem like good business, even to those who didn’t buy into Musk’s vision of a sustainable transportation future. Musk wanted his plants to be as green as possible so he had Tesla employees come up with innovations that would allow them to run on 100% renewable energy. To do so, Tesla built not just one but two gigafactories in different parts of the world, one near Reno and another in New Mexico. With multiple locations for sourcing components and supply lines for shipping finished products all over North America and Europe, it won’t be easy for competitors to undercut its prices.
Tesla’s gigafactories are already running smoothly. But it remains to be seen if they’ll be a success, or at least enough of one to justify Musk’s big gamble. If they do, Tesla will secure its place in history as not just an industry disruptor but a company that pioneered an entirely new way of making cars. If they don’t, well, then he really will have gambled away $13.5 billion!
How did they fund it?
As Tesla ramps up for production of its Model 3 sedan, which starts at $35,000 before incentives and can travel 215 miles on a single charge, it is planning to build a so-called gigafactory. To get there, it will need more lithium-ion batteries than all other battery makers combined. Tesla has partnered with Panasonic to make these advanced batteries in one of three gigafactories Tesla plans to build over time.
Battery-production facilities like Tesla’s gigafactories are a big undertaking. Tesla has said that it would need $2 billion to build a factory capable of producing 35 gigawatt-hours of battery packs per year by 2020. To keep up with demand for its Model 3, it will need to increase that capacity fourfold. Earlier investors provided some of that cash, but as Tesla starts delivering its mass-market sedan, investors will want to see profits from other sources. So it makes sense that in June 2016 Tesla started selling $1.6 billion worth of shares and debt to finance a chunk of its manufacturing plans.
Tesla says that its $2 billion gigafactory investment is going toward the construction of a 10 million-square-foot facility in Nevada—it will have enough floor space to eventually produce more lithium-ion batteries than were produced worldwide in 2013. It’s slated to open later in 2017, and by 2020 Tesla will be able to make 35 gigawatt-hours of battery packs per year there, which is nearly as much as was produced worldwide last year. For comparison, that’s about as much energy storage capacity as it would take to fuel 700,000 Tesla Model S cars for a year. Tesla claims that at full production it will reduce battery costs by 30 per cent through economies of scale and further technological advancements while increasing its battery pack output by 400 per cent.
The building itself
Construction of Tesla’s $5 billion factories outside Reno, Nevada began in 2014, and workers broke ground on a separate $1.6 billion battery plant near Sparks, Nevada in 2015. The massive building itself will cover 10 million square feet—which is larger than 10 football fields—and will house more than 4,000 employees when it’s complete. The building itself should be finished by late 2017 or early 2018. There will also be a smaller facility nearby that houses another 939 employees who work on auto manufacturing; that building was completed and opened earlier in 2017. Both locations are owned by Tesla but only one will produce batteries at full capacity; up to 3 gigawatt-hours worth each year.
Tesla predicts that both facilities will be completed by 2020, with one working on vehicle production and deliveries and a second dedicated to producing batteries for Tesla’s home storage products. At full capacity, Tesla says it will produce 150 gigawatt-hours of battery storage products each year; enough to power 15 million homes with solar panels. While that’s impressive, it doesn’t mean that Tesla will run out of work anytime soon. The Nevada facility is expected to employ more than 10,000 people by 2022, making it one of Reno’s largest employers. The U.S.
The U.S. Department of Energy estimates that by 2022, Tesla’s Nevada facilities will produce up to 80 gigawatt-hours of batteries a year; just less than half of what its California factory produces each year. While it would be optimistic to think that Tesla can keep building these factories as quickly as they want, you might not need to worry about them running out of work anytime soon. Tesla’s Nevada facility is expected to create more than 10,000 jobs by 2022, making it one of Reno’s largest employers.
Elon Musk
Tesla and Panasonic are building a $5 billion factory in Nevada which will be called Gigafactory 1. This factory will produce both batteries and Tesla vehicles, with an estimated completion date of 2017. The name Gigafactory is a bit misleading, however. There will actually be three different types of these massive manufacturing facilities–which Musk refers to as gigafactory-throughout the world. The first one is already under construction in Nevada.
In addition to Tesla and Panasonic, Musk says that several other companies are interested in partnering with Tesla to build new gigfactories. Musk isn’t ready to say exactly which companies they are just yet, but he said that they’re some of the biggest battery users in North America, including some in electric vehicles as well as utilities and energy service providers. For instance, Southern California Edison will use Tesla batteries for grid storage at some of its facilities.
Musk also said that Tesla will eventually build a gigafactory in Europe, and potentially another one in Asia. Given how popular Tesla vehicles have been in China, where they’re sold through a joint venture with local automaker Shanghai Automotive Industry Corporation (SAIC), a factory there wouldn’t be surprising. Musk didn’t share any further details about these potential factories, however. When asked if he could put some estimate on how many gigfactories might be built around the world down the road, Musk said I think we could see maybe four or five.
Final thoughts
The original report, from a pair of analysts from investment bank Credit Suisse, projected Tesla to build as many as 400,000 cars a year by 2020. Tesla eventually grew to 3 million per year. The gigafactories were originally projected to be much smaller than they are today. Inside Tesla’s Massive $13.5 Billion Gigafactories: Elon Musk’s vision for electric cars and renewable energy is becoming reality at Tesla’s gigafactories where thousands of workers are making lithium-ion batteries and solar panels in an attempt to change our world forever.
Tesla’s gigafactories are likely to play a big role in these upcoming years. The original report, from a pair of analysts from investment bank Credit Suisse, projected Tesla to build as many as 400,000 cars a year by 2020. Tesla eventually grew to 3 million per year. They are so large that they can be seen from space with Google Earth and U.S government satellites due to their size and massive construction projects around them. Elon Musk says they will one day employ 10k or more workers which are unheard of in manufacturing today outside of car companies like General Motors which is adding almost no jobs at all as it transitions from fossil fuel engine factories into electric vehicle factories.
Tesla’s gigafactories have turned out to be more massive than originally thought when they were announced in 2016. While Musk had said that Tesla would likely have to make between 100 and 200-gigawatt hours of battery cells by 2020, it was unclear whether that number would come from one factory or several. Turns out it will be many. While Tesla’s home state of California may not end up being a final location for any gigafactories in its backyard, after changes made by lawmakers on electric vehicle sales and other perks dangled in front of Tesla, it appears we won’t see them built there anyway.
