You may be surprised to learn that Tesla’s newest gigafactory isn’t in the United States, but rather in Europe.
The automaker has unveiled the first European gigafactory and it will churn out lithium-ion batteries for Tesla vehicles. It’s also a boon to locals—local media report that it will create thousands of jobs and inject an estimated $4 billion into the local economy during its initial phase of operation. Here’s what you need to know about Tesla’s first European gigafactory.
History
Tesla has officially unveiled its first European gigafactory. The facility, called ‘Gigafactory 2’, will be based in Germany and will assemble both batteries and cars. While Tesla originally planned to begin manufacturing operations at Gigafactory 2 in 2017, it looks like things are moving a bit slower than anticipated. In fact, it’s not expected to start making batteries for Tesla electric vehicles (EVs) until 2022. Speaking about why Tesla is going to spend $4 billion on its German factory,
CEO Elon Musk said: This factory is really an important milestone for Tesla. Why? Because of how cheap battery production is getting—and how fast it’s increasing.
The factory will have an initial capacity of 35 gigawatt-hours (GWh) per year by 2022, but it is designed to expand over time. It will also employ about 1,500 people once it’s fully operational. Located roughly an hour from Tesla’s main manufacturing facility in Fremont, California, Gigafactory 2 is expected to supply enough batteries for 500,000 vehicles per year. Some of these will be battery packs for Tesla EVs (Model S and Model X), but other packs could be used for different energy storage applications—perhaps even ones outside of automobiles. The factory may eventually produce home batteries and stationary energy storage products like Powerwalls and Powerpacks.
Tesla said on its website that it will further enhance manufacturing processes and reduce battery costs by another 30% at Gigafactory 2. The company says its goal is to make a battery cost of around $100 per kilowatt-hour, which would bring Tesla well within reach of profitability with its EVs. (It costs somewhere between $145 and $200 to produce a Model 3 battery.) Tesla also announced plans for three more gigafactories in China, Japan, and Europe over the next few years. Each one should have about as much production capacity as Tesla’s main factory in Fremont—if not more.
Location
In a small town Groningen and Zwolle, Tesla unveiled its first European factory, an industrial complex that will produce both batteries and cars from 2022. The building will initially be able to produce 150,000 cars and battery packs a year for countries such as Germany, Norway and France. At full capacity, however, it will be able to manufacture 500,000 vehicles annually for all of Europe — including Great Britain — according to Tesla’s founder Elon Musk in his opening speech today.
Tesla’s choice for its first factory outside of North America is no coincidence, with Musk making it very clear that he sees battery production as a key to Tesla’s future. For Europe to have long-term reliability and freedom from having to import cars from foreign countries, we must have our own internal supply of batteries Musk said in his speech. To date, most of Tesla’s vehicles are manufactured in Fremont in California and sold in North America and Asia. The company plans to start production at its gigafactory 1 next year but right now it has a ways to go before making 500,000 vehicles a year. Today Musk announced that lithium-ion cell production will begin by summer 2020 with battery packs produced by winter 2022.
Tesla’s first factory in Europe will produce its most popular models, including Model 3 and Model Y as well as Powerwall and Powerpack home batteries. In his speech Musk explained that one of Tesla’s main objectives is to create a sustainable energy ecosystem, which means not only producing electric cars but also investing in sustainable energy generation through solar panels and storage units at homes. With everything interconnected, Musk said Tesla can monitor power usage remotely and make it much easier for people to switch over to solar or wind energy when needed instead of relying on burning fossil fuels. This part of Tesla’s business will be ramped up once construction of phase 2 starts in 2023 according to Musk.
Plans For Expansion
Tesla has officially unveiled its plans for its first gigafactory outside of North America. As with Tesla’s US gigafactories, it looks as though it will be built in phases to accommodate the increasing demand for Tesla products, with plans currently in place to produce three models of the electric car: A small SUV, a mid-size sedan and an all-new fully-electric compact car. The latter is reportedly based on Volvo’s new SPA platform and was previewed by a concept called the Model Y that debuted at March’s Geneva Motor Show.
Tesla has announced plans to build a gigafactory in Europe. The factory will be built in phases and is expected to have a capacity of up to 10,000 vehicles annually. According to Tesla officials, they plan on making three models of car at its first European plant: an all-new compact electric SUV that’s smaller than its Model X, a mid-size sedan similar in size to its Model S and an all-new fully electric compact car based on Volvo’s Compact Modular Architecture (CMA). That’s right – Tesla may be collaborating with other automakers as it ramps up production. Please note that Giza Write is not affiliated with Tesla Motors Inc. or any of its affiliates.
Tesla’s most advanced electric cars are already some of the safest on today’s roads, but it looks as though they will soon be even safer. According to company officials, Tesla is working on improving Autopilot by adding more radar sensors to its vehicles. The upgrade will also allow Tesla vehicles to automatically scan for and brake when they detect objects that haven’t been mapped yet. This seems like an obvious feature now, but apparently, it was a difficult one for engineers to implement and had been put off until now. Please note that Giza Write is not affiliated with Tesla Motors Inc. or any of its affiliates.
Facilities
The first factory is planned to be a €2 billion facility with a targeted production capacity of 35 gigawatt-hours per year. This will enable us to meet Europe’s demand for automotive lithium-ion batteries and expand our installation network by building dozens of Supercharger stations across the continent. Once fully operational (which Tesla expects to be in about two years), it would be one of Europe’s largest manufacturing facilities and employ about 1,400 people. Construction is set to begin soon, so stay tuned for more news!
The first factory will produce lithium-ion battery cells, Tesla’s industry-leading powertrain components and packs for homes, commercial installations and utilities. Production capacity is planned to reach 35 gigawatt-hours per year by around 2020, which will be dedicated to producing affordable Model 3 cells. These batteries will then be used in Model 3, our smaller and more affordable sedan starting at €35,000 – hopefully available in 2019! Once production is optimized and reaches capacity at Giga 3, we plan to build a second facility in Europe to bring cell production up to a projected 55 gigawatt-hours per year by around 2023.
This would enable us to produce more than one million vehicles per year and significantly reduce the cost of our batteries. And that’s not all! Tesla is working with Neoen to develop a next-generation, sustainable energy storage project in France. When complete, it will be one of the world’s largest lithium-ion battery projects by capacity and help provide reliable electricity for more than 15 million people throughout southern France, including areas affected by last year’s devastating wildfires.
Final Thoughts
Inside Tesla’s First European Gigafactory The electric vehicle maker finally unveiled its first European gigafactory, which will be located in Germany. The factory is expected to produce both batteries and cars. Production will likely begin this year. The new facility is Tesla’s first full-scale plant outside of California, where it builds its other products like Model S and Model X vehicles. Although most of Tesla’s electric cars are made in Fremont, California, Tesla still imports them to Germany.
The company says that when it starts producing batteries and Model 3 vehicles at its new gigafactory, it will reduce those costs significantly. Over time, we expect to save millions of euros in logistics costs per year by importing locally produced battery packs and electric motors from our factory in Europe, said Stefan Krause, member of Tesla’s board of directors. We see a future where all our production is powered by renewable energy sources—including our Supercharger network across Europe. This is not only a very important step for sustainable transportation but also for sustainability in general.
The factory will build lithium-ion batteries and their components. The batteries will help power Tesla’s electric vehicles, while Model 3 parts like electric motors and gearboxes will be used in their other products. The new gigafactory is expected to supply up to one-third of European demand for lithium-ion batteries, which are expected to grow significantly over time as they increase power for cars, mobile devices, and even our homes. Lithium-ion batteries are already helping us change how we power our lives—from reducing dependence on fossil fuels to powering a more sustainable future for our world.
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