The date took us by surprise taking into account Bloomberg reported at the beginning of this month the factory was only 14 percent completed as of early May. Estimated to cost more than $5 billion, the Gigafactory located just outside Sparks, Nevada will be in charge (pun intended) of producing a huge amount of batteries that will find their way inside Tesla’s cars.
If you are wondering about the origins of the “Gigafactory” name, it refers to the planned annual battery production capacity of 35 gigawatt-hours (GWh). In this case, “giga” refers to a unit of measurement that represents billions. That means one GWh is the equivalent of generating/consuming one billion watts for one hour.
Tesla joined forces with Panasonic for the ambitious project and one of the main objectives is to slash the manufacturing costs of batteries by at least 33 percent. The new 5.8-million square feet facility will be crucial for the success of the Model 3 which will carry a starting price of $35,000. In order to be able to sell the car at a relatively low price and still make a profit, Tesla needs to have the means to produce cheap batteries.
In addition, there are almost 400,000 reservations for the Model 3 at this point, so Tesla is going to need a lot of batteries once production of the electric sedan will kick off in the second half of 2017. In the long run, the EV manufacturer aims to assemble as much as 500,000 cars per year by 2018 (not 2020 as originally planned).
Interestingly, once the facility will be up and running at full capacity, it is going to double the world’s lithium-ion battery production. Tesla mentioned a while back the Gigafactory is going to be powered by renewable energy and it aims to turn it into a zero-energy building (total amount of energy consumed equals the amount of renewable energy generated on site).