Gigafactory: Tesla to invest $2 billion into a US car battery plant

Article by Eugene Conan, on February 28, 2014

Tesla Motors Inc. is intending to invest $2 billion into a car battery site in the United States that could supply lithium ion packs for 500,000 vehicles annually by the end of the decade. The site -- expected to commence operations in 2017 -- is part of Tesla's blueprint for a more affordable electric vehicle. It would also be the first major, integrated US site that builds battery cells for electric cars.

Tesla said in a blog that it has already narrowed the list of sites for the facility to locations in Nevada, Arizona, New Mexico and Texas, adding that "final site selection activities are underway." Tesla and partners are expected to spend between $4 billion and $5 billion into the site through 2020. The site will enable Tesla "to achieve economies of scale and minimize costs through innovative manufacturing, reduction of logistics waste, optimization of co-located processes and reduced overhead," according to the carmaker.

By end of the decade, the plant is expected to build more lithium ion batteries annually than were produced globally in 2013. "By the end of the first year of volume production of our mass market vehicle, we expect the Gigafactory will have driven down the per kWh cost of our battery pack by more than 30 percent," Tesla disclosed.

The company expects the site to have around 6,500 employees. Panasonic Corp., is mulling investing in the site, sources privy with the plan told Reuters. Last week, Tesla initially hinted about plans for the lithium ion battery plant that would likely have Panasonic and other suppliers as partners. Panasonic is aiming to expand its cooperation with Tesla.

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