Perhaps Tesla Motors’ (NASDAQ:TSLA) greatest venture beyond the Model 3 is the Gigafactory that is being built together with Panasonic. The Nevada battery plant is pegged for completion in 2020. Despite the lengthy nature of the project, the economies of scale will allow Tesla to lower the cost of its lithium-ion batteries by more than 30 per cent. In addition, the equipment used at the factory will be custom made. The result will render the Gigafactory around five times more efficient than any factory its size.
Upon completion, the Gigafactory is set to acquire a total 13.6 million square feet of the Nevada landscape. Construction began mid-2014 and should be done by the end of this decade. When it is finished, the plant will push out more lithium-ion battery than the rest of the world does in a year.
New frontiers with Tesla Gigafactory
According to Tesla, “the Gigafactory will produce batteries for significantly less cost using economies of scale, innovative manufacturing, reduction of waste, and the simple optimization of locating most manufacturing process under one roof.”
The battery plant is a joint venture with Panasonic. In one part of the massive building, the Japanese electronics major will take the lead in making the battery cells. Tesla will then assemble them into Powerpacks for its cars and other end-products.
The EV giant hopes to assemble enough Powerpacks per year to fit into 500,000 cars by the end of 2018. That target was originally pinned for 2020. However, the electric car giant brought it forward by 2 years and now aims to make around 1.5 million Powerpacks a year by the closing of 2020.
As it stands, the Powerpacks made at the Gigafactory will be moved to the Fremont plant upon completion. This location is approximately five hours away from the Gigafactory. Here, the Powerpacks will be fitted into Tesla (NASDAQ:TSLA) EVs. This entire process will be the most vital role in ensuring the upcoming Model 3 rolls out at its assured price tag. CEO Elon Musk assures that by reducing all costs, the company can offer a base Model sedan for $35,000.
Beyond the Tesla Model 3
However, only a portion of the Gigafactory’s production will go into the Model 3 and the rest of Tesla line-up. A great number of the battery packs will go into the formation of the station units like the Powerwall. This is the company’s home battery pack which can be used to power households via solar or grid energy. Homes can use the product to ease their reliance on grid energy or as a back-up power supply. Tesla projects it home products business to greatly surpass its EV business over the next several years.
Investing in machinery tailored for the Gigafactorhy is another element set to maximize productivity. Tesla engineers are used to make the Nevada plant’s equipment. Five time more efficiency is no joke. Tesla plans to manufacture a car at approximately one meter per second. Although that could translate to a single EV produced every five seconds.
Tesla Motors (NASDAQ:TSLA) clearly has high ambitions, and rightfully so. It is the company’s high hopes and over-reaching tendencies which have placed it as the globe’s leading maker of luxury electric cars. Tesla says the Gigafactory is already in use. The company has a growing solar and household products business to nurture as well. With the Gigafactory in full swing, transforming Tesla into much more than a luxury automaker should be a simple task.