Tesla Invests $2 Billion in New Gigafactory

By | February 27, 2014
With plans to introduce a mass market electric vehicle within the coming years, Tesla needed to find a way to reduce costs. The electric automaker has decided to build a new factory where it can mass produce lithium ion batteries. Known as the Gigafactory, this innovative facility is expected to not only drive down kWh battery pack cost by 30 percent, but produce more lithium ion batters than the number produced worldwide in 2013. To create this factory, Tesla will invest around $2 billion. Although the factory isn't expected to be up and running until 2017, the electric automaker is hopeful that it will be able to produce battery packs for up to 500,000 vehicles annually by 2020. Tesla said on its blog that the new factory will help "to achieve economies of scale and minimize costs through innovative manufacturing, reduction of logistics waste, optimization of co-located process and reduced overhead." With the opening of the new plant, Tesla plans to employ 6,500 people. Tesla's current lithium ion battery supplier, Panasonic Corp., plans to invest in the gigafactory, as the company wishes to expand supplies to the automaker when their current contract ends. The new plant may also supply other automakers like Toyota Motor Corp., according to the Nikkei daily business report.
Source: Tesla, Automotive News (Subscription Required)