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Tesla Inc (TSLA) going to decide three more Gigafactory locations

Tesla Inc is preparing to build three more Gigafactories and the company plans to finalize the locations later this year.

In its shareholder letter for the fourth quarter of 2016, Tesla said that expects to finalize locations for Gigafactories 3, 4, and possibly 5,” The Verge reported.

Currently, there are two Tesla Gigafactories. The Gigafactory 1 is located at the Tahoe-Reno Industrial Center in Storey County, Nevada. The second one is the Buffalo facility where the company builds solar panels together with Panasonic. In the letter, the company said it is installing the Model 3 manufacturing equipment in Fremont and at Gigafactory 1.

Tesla Gigafactory 1

The Gigafactory 1 is a lithium-ion battery production facility.

The company claims that the facility maintains high efficiency and output while achieving the lowest cost per capital investment per gigawatt hour (GWh) and the lowest production kilowatt hour (kWh).

The factory will produce cells, battery packs, energy storage products and vehicle components. Construction continues on the second phase to allow the facility to support annualized cell production capacity of 35 GWh and battery pack production of 50 GWh, Tesla said in a statement.

The company added that the Gigafactory 1 is designed as a highly automated, integrated system intended to be replicated at other locations around the world. It is also scalable so that investments can be added as growing demand drives the need for further output.

The factory is a partnership between Tesla and Panasonic. Panasonic is expert in cell manufacturing, while Tesla “provides creative, first principles thinking, clear vision, a rapid pace of execution, and the end product design and demand,” the company said at an investor event last month.

Tesla secured agreements with Nevada and Storey County for tax abatements.

Model 3 Production

Meanwhile, Tesla Inc said in its earnings report that it is “on track” to start the Model 3 production in the second half of 2017. In early February, the company started building Model 3 prototypes. It added that initial crash test results were positive, and could start production in July.

“Our Model 3 program is on track to start limited vehicle production in July and to steadily ramp production to exceed 5,000 vehicles per week at some point in the fourth quarter and 10,000 vehicles per week at some point in 2018. To support accelerating vehicle deliveries and maintain our industry-leading customer satisfaction, we are expanding our retail, Supercharger, and service functions,” the company said in the statement.

During the fourth quarter of 2016, Tesla received 49% more global net orders for Model S and X combined, compared to the same period in 2015, according to the statement.

“Despite the complexities of implementing Autopilot hardware on both Model S and Model X, we still produced 77% more vehicles in Q4 2016 than in Q4 2015. In Q1 2017, we began pushing over-the-air software updates to all Autopilot-equipped cars to further increase performance and safety,” the company noted.

It is looking to deliver 47,000 to 50,000 Model S and Model X vehicles combined in the first half, representing a growth of 61% to 71% compared with the same period last year.

tesla-motors-tsla-gigafactory

Moreover, Tesla Inc said that it intends to invest between $2 billion and $2.5 billion in capital expenditures ahead of the start of Model 3 production.

Stock Update

TSLA has been doing well so far this year. The stock is up around 28% year-to-date. During the past 12 months, shares jumped over 64%. TSLA has gained 43% during the last three months.

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Adam Green is an experienced writer and fintech enthusiast. He he worked with LearnBonds.com since 2019 and covers a range of areas including: personal finance, savings, bonds and taxes.

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