California-based electric car manufacturer Tesla plans to build a giant lithium ion battery plant

Tesla's Gigafactory to shake up cost of Li-ion batteries

Electric car manufacturer Tesla wants to build a large-scale lithium-ion battery plant that would drive down cost of vehicle battery packs by more than 30 per cent.

The ambitious plan of the pioneering electric car manufacturer foresees the factory, employing cutting-edge technologies and production techniques, would produce more Li-ion batteries by 2020 than all the world’s manufacturers have produced together in 2013.

In documents published on Tesla’s website, the company said it considered building the factory either in Nevada, Arizona, New Mexico or Texas. All these locations are close enough to Tesla’s main site in Fremont, California, to allow for low transportation costs.

“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 minimise costs through innovative manufacturing, reduction of logistics waste, optimisation of co-located processes and reduced overhead,” the company said in a blog post.

Tesla and its partners will invest about $4-5bn (£2.4–3bn) in the Gigafactory through 2020. The facility construction should start by the end of 2014 with the production launch planned for 2017. By that time, the company said, it wants to include a mass-market vehicle into its product range. Tesla cars, so far, have been a luxury product for those who can afford to pay £50,000 for a car, in the case of the popular Model S car.

With its own battery-production facility, Tesla wants to speed up its vehicle production to up to 500,000 vehicles a year in 2020.

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