Tesla Makes Fast Move To Build Two Giant Battery Factories Simultaneously

May 7 2014, 6:26pm CDT | by

Tesla Motors is moving fast with its plan to build what it calls a “gigafactory” for building battery cells and packs for its cars. The company plans to break ground on one “probably next month” and the second one a month or two after, said its CEO, Elon Musk, on Wednesday.

The company has yet to announce where it plans to kickstart two construction projects. But it’s working on both essentially at the same time in order to make sure that at least one of them will be ready to produce enough battery packs as Tesla boosts production of Model S that is available now and Model X, an SUV that it plans to launch in 2015.

Tesla’s plan to build a battery manufacturing center (or two) caught a lot of attention when Musk first discussed it publicly last November. Not only did it reflect the upstart carmaker’s struggle to manage its supply of components and figuring out an efficient way to produce its cars.

Tesla, founded in 2003, has shown to be able to design beautiful vehicles that — partly because they are all electric — really catch the public’s fancy. But can it become a long-running, profitable car manufacturer remains a big question.

The dual-location approach prompted one analyst during the earnings call on Tuesday to question whether the company is spending too much money.

The answer from Tesla executives, as you might expect, is “no,” considering that a shortfall in the lithium-ion battery cell supply was the biggest obstacle that prevented the electric car maker from marketing its cars as aggressively as it would’ve liked last year.

That shortage prompted the California company to create plans for building its own manufacturing complex for batteries, Musk said last November.

“For us it’s critical to have the first gigafactory ready on time,” said Deepak Ahuja, Tesla’s chief financial officer, during the earnings call. “Every month of delay is far more expensive for us than the incremental cost upfront to kickoff two sites at one time.”

Tesla wouldn’t be producing its own cells in the gigafactory, though. That job will likely go to Panasonic, which has been Tesla’s cell supplier and has signed a letter of intent to work with Tesla on producing cells in the new factory. There will be other companies onsite for producing components for the cells, too. Tesla will then assemble the cells into packs.

The first gigafactory should begin rolling out cells and backs in 2017. The production volume will increase overtime until it reaches an annual production of 35 gigawatt-hours for cells and 50 gigawatt-hours for battery packs. That gap will be filled by cells shipped from either Panasonic’s own factories or other cell makers, Musk said.

Tesla also has chatted up mining companies that supply critical components, such as nickel and cobalt, to try to ensure that it won’t face a shortage of materials.

The company initially had narrowed down its choice of factory locations to four states: Arizona, New Mexico, Nevada and Texas. It then whittled that list down to two states that it has yet to disclose.

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

IPad Air Giveaway 2014 is Online
IPad Air Giveaway 2014 is Online
Our sister site I4U News is giving away a brand new iPad Air or if you can wait an iPad Air 2. This is an $499 value.
 
 
Your Parent Or Kid Moved In: Are You Covered?
A record 57 million Americans now live in multigenerational family households — double the number in 1980, according to a new Pew Research Center study. And I bet many of them have the wrong homeowner’s or renters...
 
 
Pandora Looks to Challenge Terrestrial Radio's Dominance in Cars
Pandora Media is one of the largest Internet radio providers in the U.S. with more than 75 million active users. While the company’s active user count has increased at a robust pace historically, it is likely to slow...
 
 
Are General Manager Salaries About To Skyrocket? Will There Be A Front Office Salary Cap?
Are General Manager Salaries About To Skyrocket? Will There Be A Front Office Salary Cap?
It’s January 2026. New York Yankees owner Hal Steinbrenner gets out of his driverless car and triumphantly marches before the gathered press to introduce his prized new free agent. It’s a record-breaking contract—over...
 
 
 

Latest from the Network

European Champions League standings
Paris, Oct 22 (IANS) Following are the European Champions League standings for Groups E to H after Tuesday's matches (tabulated under matches played, won, drawn, lost, goals for, against, points), according to Xinhua...
Read more on Sport Balla
 
Rogerio set to break Giggs world record
Rio de Janeiro, Oct 22 (IANS) Sao Paulo goalkeeper Rogerio Ceni is one victory away from earning his fourth Guinness World Record by eclipsing a mark held by Manchester United legend Ryan Giggs. The 41-year-old will...
Read more on Sport Balla
 
Ryan Reynolds can't keep his hands off Blake Lively
Ryan Reynolds was ''really sweet'' to Blake Lively at the Angel City Ball. The couple, who got married in September 2012, made their first red carpet appearance together in New York City on Monday night (10.20.14) since...
Read more on Celebrity Balla
 
Kris Jenner doesn't know who Bruce Jenner is dating
Kris Jenner has ''no idea'' whether Bruce Jenner is dating her best friend. The 58-year-old reality TV star, who split from the Olympic gold medallist last October after 23 years of marriage, claims she doesn't know if...
Read more on Celebrity Balla
 
When Rihanna dressed like 'Harry Potter'
New York, Oct 22 (IANS) Singer Rihanna was spotted here in a Harry Potter style costume. She wore the wizard-like get-up while heading for a business meal here Monday, reports mirror.co.uk. The 26-year-old combined a...
Read more on Celebrity Balla
 
Germany raises humanitarian aid to Iraq
Berlin, Oct 22 (IANS) Germany has pledged a further 20 million euros (about 25.5 million dollars) in humanitarian aid to Iraq, the foreign ministry said in a statement Tuesday. The additional funds are immediately...
Read more on Politics Balla
 
India calls on Israel, Palestine to resume peace process
United Nations, Oct 22 (IANS) India has called upon Israelis and Palestinians to resume the peace process as "dialogue remains the only viable option" to address the issues confronting the region. In a brief statement...
Read more on Politics Balla
 
Airstrikes help ground forces fight IS: Pentagon
Washington, Oct 22 (IANS) Kurdish forces are in control of the majority of the Syrian city of Kobane despite efforts by the Islamic State (IS) to take the town, a spokesperson for US defence department said Tuesday....
Read more on Politics Balla
 
Palestine, Israel urged at UN to halt unilateral initiatives
United Nations, Oct 22 (IANS) UN Secretary-General Ban Ki- moon Tuesday called on Palestine and Israel to overcome differences and halt unilateral initiatives that fuel mistrust, so as to pursue long-term stability in...
Read more on Politics Balla
 
China urges Israel to create conditions for peace
United Nations, Oct 22 (IANS) Chinese government has called on Israel to create necessary conditions for the resumption of peace talks with Palestine. At an open debate of the Security Council on the situation of the...
Read more on Politics Balla