Tesla starts Gigafactory’s battery cell production
Tesla Motors Inc. said Wednesday it has started the “mass production” of lithium-ion battery cells at the company’s battery factory outside Reno, Nev., alongside partner Panasonic Corp.
The cells will be used in Tesla’s energy-storage products and at a later date in the Model 3, the mass-market, all-electric sedan Tesla plans to start selling by the end of this year. The car is a crucial step in Tesla’s expansion plans.
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In a blog post Wednesday, Tesla TSLA, +4.61% described the cells being produced as “high performance” cylindrical-shaped products jointly engineered and designed by Tesla and Panasonic 6752, +2.31%
The fist cells will be used in Tesla’s stationary battery products with production of the cells destined for the Model 3 starting in the second quarter, Tesla said.
By 2018, ”the Gigafactory will produce 35 GWh/year of lithium-ion battery cells, nearly as much as the rest of the entire world’s battery production combined,” the company said.
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Tesla plans to sell half a million cars by next year, and much is riding on the Model 3, expected to cost about $35,000, or roughly half the price of a starter Model S, Tesla’s luxury sedan. It needs cheaper, more plentiful batteries to be able to reach those goals.
The company fell short of its 2016 delivery goals. It reported Tuesday that it ended the year having delivered 76,230 vehicles, against a target of 80,000.
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Tesla said it took a “phased approach” with the battery factory’s production to allow it “to learn and continuously improve our construction and operational techniques as we continue to drive down the cost of energy storage.”
The current plant has a footprint of 1.9 million square feet, housing 4.9 million square feet of operational space across several floors, according to the post.
“And we are still less than 30 percent done. Once complete, we expect the Gigafactory to be the biggest building in the world,” it said. “With the Gigafactory online and ramping up production, our cost of battery cells will significantly decline due to increasing automation and process design to enhance yield, lowered capital investment per Wh of production, the simple optimization of locating most manufacturing processes under one roof, and economies of scale.”