Tesla chargers

Tesla’s Gigafactory starts car battery production

Image credit: Reuters

Electric car maker Tesla has started US production of lithium ion batteries at its Gigafactory in Nevada, aiming for cost reductions that will make electric cars and battery storage more affordable.

A joint venture between Tesla Motors and Panasonic, the plant will initially provide cells for Tesla’s home and industrial energy storage devices Powerwall 2 and Powerpack 2. Starting from the second quarter of 2017, the plant will also be supplying batteries for Tesla’s upcoming mass-market sedan Model 3, which is expected to enter the market by the end of this year.

Tesla said that by 2018, the factory will be producing 35 GWh of battery capacity per year, which is almost as much as all the world's other lithium ion battery manufacturers combined.

The car-maker envisions that the facility together with the technology it produces will allow it to  cut the cost of battery packs by 30 per cent.

“The high-performance cylindrical 2170 cell was jointly designed and engineered by Tesla and Panasonic to offer the best performance at the lowest production cost in an optimal form factor for both electric vehicles and energy products,” Tesla said in a statement.

“By bringing down the cost of batteries, we can make our products available to more and more people, allowing us to make the biggest possible impact on transitioning the world to sustainable energy.”

Tesla is building the factory in phases, which enables the company to start production immediately in the completed sections, while the rest is still under construction.

“Our phased approach also allows us to learn and continuously improve our construction and operational techniques as we continue to drive down the cost of energy storage,” said Tesla. “Already, the current structure has a footprint of 1.9 million square feet, which houses 4.9 million square feet of operational space across several floors.”

The section, which has started commercial production earlier this week, represents about 30 per cent of the eventual size of the plant, which Tesla expects to become the biggest building in the world.

Tesla said that once fully operational, the plant will directly employ 6,500 people and enable creation of an additional 20,000 to 30,000 jobs locally in the supply chain.

Earlier this week, Tesla revealed its deliveries fell by 9.4 per cent in the final quarter of 2016. The manufacturing decline was caused by the transition to new autopilot hardware, according to the company.

In the third quarter of 2016, Tesla delivered 24,500 vehicles, while in the fourth quarter it was only 22,200.

Total deliveries for 2016 of 76,230 also fell short of the company's projection of 80,000 to 90,000.

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