Tesla Motors announced that its Gigafactory started its operations. It’s the huge factory of lithium-ion battery cells to be used for the batteries of electric cars produced by the company and its power storage products. This is just the beginning for the company founded by Elon Musk because the Gigafactory is active only in part but can already take advantage of the agreement signed with Panasonic.
The Gigafactory project is one of the cornerstones of Tesla Motors’ future activities to offer lithium-ion batteries in the quantities required by the sale of electric cars and the Powerwall 2 and Powerpack 2 storage systems. For this reason, it was decided to build it in stages to allow the company and partners such as Panasonic to start production as soon as possible.
The company announced that less than 30% of the Gigafactory was completed and initially promised to give full-time employment for nearly 2,000 people. Meanwhile, the remaining 70% of the giant factory is still under construction so the production will be expanded as soon as more sections will be completed. According to Tesla Motors that will allow them to learn from the work in progress and improve production and construction techniques to make some improvements to the new Gigafactory’s sections.
According to Tesla Motors, once completed, the Gigafactory will be the largest building in the world and according to plan the production of lithium-ion battery cells in mid-2018 should be close to that of the rest of the world combined. Optimizations, the automation increase within the factory and other factors should allow scale economies resulting in lower battery costs.
Within a few years, the Gigafactory should become crucial for the economy of Rino, the city of Nevada near which the factory was built. Once it reaches its full operations and therefore its peak of production, scheduled for the end of 2018, it should employ about 6,500 people full time but indirectly it could create between 20,000 and 30,000 jobs in the neighboring areas. In short, the Tesla Motors statements are very important and ambitious.
For Tesla Motors, it was important to end the year by completing the merger with SolarCity to proceed with the offer of the solar roof combined with the Powerwall 2 storage system and signing a new agreement with Panasonic. The Japanese company will invest a total of $1.6 billion in the Gigafactory and about $250 more millions in another factory in Buffalo, where in the summer of 2017 the production of photovoltaic cells and modules is scheduled to start.
The market of lithium-ion battery cells is becoming increasingly competitive and the Gigafactory is Tesla Motors and Panasonic’s answer. Not everyone is convinced that it can be a winning bet but Elon Musk continues to strongly influence the markets in which he operates.