This may be the biggest bet made by Tesla so far.
According to Bloomberg News, Tesla’s Gigafactory, a super battery factory in Nevada, will be inaugurated on the 29th this Thursday. This is more than two years ahead of schedule. Once completed, the factory's floor space can reach approximately 10 million square feet, which is almost as large as 262 football stadiums. This will also be one of the largest buildings in the world.
Gigafactory super plant inside picture Source: bloomberg
Gigafactory is the world's largest lithium battery plant that Tesla invested $5 billion in partnership with Panasonic. However, at the beginning of this month, the construction of the super factory only completed 14%. In order to provide batteries for the Model 3 electric vehicle under development in a timely manner, Tesla hired twice as many workers as originally planned. The plant is crucial for Tesla's ability to break the production bottleneck. Once it is put into production, the cost of the batteries used by Tesla's electric vehicles will drop by at least 33%.
Tesla battery supplier Matsushita expects that the plant will begin large-scale production in November this year. It is expected that it will achieve full capacity operation by 2020. At that time, 500,000 lithium batteries will be produced each year, which is more than the sum of the lithium batteries produced by all the other factories in the world.
After Tesla Model 3 was announced at the end of March this year, more than 320,000 people had already placed orders within a week. After seeing the huge demand in this market, Tesla plans to increase the production scale of Model 3 to 500,000 vehicles per year in 2018, two years ahead of schedule.
In order to achieve this goal, the construction of the super battery plant has been eagerly awaited. Tesla’s partner Matsushita Electric also invested US$1.6 billion in the factory. It is expected that by the second quarter of 2017, 31% of the factories will be completed.
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There is another reason why Tesla is so "hurried" to complete the construction of the factory. Its CEO Elon Musk stated in the "Part 2 of the Great Plan" released last week that Tesla will be transformed into a renewable energy company and hope to manufacture large-scale transportation such as trucks and buses. At the same time, it will continue Develop automated driving technology.
The completion of the super factory will provide more contributions to the development and manufacturing of new models. Musk said that the super battery plant will start production after 8-9 months and that it can supply 1.5 million vehicles a year after the factory is completed.
Tesla said that the super factory will produce 35 gigawatt-hours of batteries by 2018, which is equivalent to the world's total in 2014. Musk said Gigafactory is also capable of producing 150 gigawatt-hour batteries if needed.
However, there are some competitors that may undermine Tesla's dream. Berkshire Hathaway, which supports Warren Buffett of Chinese automaker BYD, is also working to establish batteries and energy storage systems to protect low-cost electric vehicles from manufacturing in the coming years.
However, Musk stated that they have some ways to reduce costs and increase production capacity. These include increasing the efficiency of the plant and establishing more factories in Europe and China to increase sales of electric vehicles.
Elon Musk, as the soul of Tesla, has repeatedly created legends in his career. Prior to the creation of Tesla, Musk created the world-famous PayPal, and then after the Tesla Motors was born, Musk began to study the rockets, resulting in the highly recyclable rocket SpaceX. We will wait and see if the plan to establish a super battery plant will bring reshuffle to the global battery power industry.