Tesla Motors has announced that it will be investing $2 billion into a large-scale factory that will mass-produce cheaper batteries for its expanding line of electric vehicles.
An additional $3 billion will be fronted by as-yet-to-be-named investors.
The company’s goal is to have the factory, referred to as the “gigafactory” up and running in three years’ time.
Exact details on the project are still a bit sketchy, but in the company’s release, it was said that the location of the factory will be in the American Southwest; specifically, Nevada, Arizona, New Mexico, or Texas.
The finished batteries would then be shipped to Tesla’s assembly plant in Fremont, CA.
According to industry experts, Tesla needs more batteries if it’s to launch its third-generation vehicle, an electric sedan priced below $40,000.
Currently, sales of the company’s Model S sedan, which costs $70,000 or more, have been limited by a battery shortage. (Panasonic currently makes the batteries for the Model S.)
“With this facility, we feel highly confident of being able to create a compelling and affordable electric car in approximately three years,” Elon Musk, Tesla’s chief executive, and Deepak Ahuja, its chief financial officer, wrote in the company’s report.
When the gigafactory is up and running, it is expected to produce about 500,000 lithium-ion batteries annually by 2020, which is more than suppliers all over the world produced last year alone. From a cost-savings point of view, Tesla Motors foresees a total reduction in the per-kilowatt cost of its battery packs by 30% or more by the end of the first year of volume production for its third-generation electric car.
The factory is expected to cover anywhere between 500 and 1,000 acres of land. It will employ close to 6,500 workers.
Story via teslamotors.com
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