Tesla to build largest battery production factory in the world
We like to report on news regarding Tesla whenever something of note related to the all-electric vehicle manufacturer happens. We’ve reported on their plans as well as on their problems in the past but today we have a bit of news that is a bit out of their usual automotive scope. It appears that Tesla is getting ready to start a new venture, building the largest battery production factory in the world, and it plans to do this later this year.
The California-based electric vehicle manufacturer has announced its plans to raise US$1.6 billion – in a convertible debt offering – in order to built the ‘Gigafactory’, which is set to sit on a 929,000-square-metre area in a location that is unknown for the time being.
The total cost of the project is thought to revolve around US$5 billion with partners like Panasonic planning to chip in.
The aim of the factory will be to produce enough batteries to supply half of a million pure-electric vehicles by 2020, with construction set to start later this year with the first battery expecting to be built by 2017.
According to Tesla CEO Elon Musk, the factory is expected to drive the kilowatt-hour price cost of batteries by a considerable thirty percent, while at the same time creating jobs for six thousand worker.
Tesla is following the mode of development proven by Apple, meaning that it is seeking to own and control the crucial components of its product rather than continuing to rely on third-party suppliers. With the ability to build their own batteries under their power, this move is going to cement Tesla’s ability to vertically integrate, or to look for a partner with a controlling stake with the Japanese firm Panasonic.
Thanks to Tesla’s success in North America, the battery manufacturing process is expected to bring about scale, something that the company doesn’t currently have.
Tesla is planning to ship more than 35,000 Model S units in 2014 and this number is expected to see a fifty-five percent year-on-year growth.
However, Tesla can only make around 600 cars each week, but this number is expected to increase to a thousand by this year’s end – the battery supply has always been and still is a key constraint.
