Tesla Gigafactory Opens For Business, Ramping Battery Production For Model 3 Launch

Tesla Motors is working feverishly to finish constructing its $5 billion, 3,200 acre "Gigafactory" located outside Sparks, Nevada (near Reno). It's already semi-operational with 1,000 construction workers toiling away seven days a week in two shifts. The factory, which is two years ahead of schedule, will help meet what's anticipated to be high demand for lithium-ion batteries for Tesla's not-yet-released Model 3 sedan.

"We have to be ready with cell and pack production well ahead of vehicle production," JB Straubel, Tesla’s chief technical officer and co-founder, told The Wall Street Journal during a walk-through of the factory. "We’re accelerating our construction plans and accelerating our planned ramp up of cell production."

Tesla Gigafactory

The name Gigafactory comes from its planned annual battery production capacity of 35 gigawatt-hours (GWh). As of this moment, the Gigafactory is about 14 percent complete though Tesla's pushing to have it operational before it launches its Model 3 sedan next year. With an asking price of $35,000, the Model 3 is about half the base price of Tesla's Model S.

As part of its effort to fast track Gigafactory's completion, Tesla doubled the number of workers tasked with building it. Part of the facility that takes up 1.9 million square feet of floor space is already complete, while in other places Tesla is using exterior walls that are temporary so that they can be relocated when needed.

This is a joint venture with Panasonic and other strategic partners. According to Tesla, once complete, its Gigafactory will be able to produce batteries at a significantly lower cost using economies of scale, innovative manufacturing, reduction of waste, and due to the fact that most of the manufacturing process will happen in a single location.

"We expect to drive down the per kilowatt hour (kWh) cost of our battery pack by more than 30 percent. The Gigafactory will also be powered by renewable energy sources, with the goal of achieving net zero energy," Tesla says.

Elon Musk wants to roof the Gigafactory with solar panels. If everything works out, the Gigafactory will be 100 percent sustainable and able to produce batteries for half a million electric cars per year.