Tesla Motors Inc. is considering creating a "giga factory" to build electric vehicle battery packs for its own use, according to chief executive Elon Musk. He remarked that Tesla's long-term ambitions to produce 500,000 electric vehicles annually could “chew up” majority of current lithium ion battery supplies in the world.
Tesla’s CEO remarked that the new site would be "something comparable to all lithium ion production in the world, in one factory." While Musk didn’t provide a timeframe for the site, but with the smaller third generation cars set to arrive in 2017 with a $35,000 price point, Tesla production is expected to ramp up rapidly.
Musk said in a conference call with analysts that if Tesla was to build half a million cars, it would need cell capacity matching that. Since that capacity would be at more or less at par with the current global lithium ion production, there might be a need for a “giga-factory.”
Tesla’s CEO said the factory would take "raw materials to finished packs, with partners, in North America." He remarked that raw materials are not an issue and there would be no need to worry about lithium supply.
Musk remarked that the plant would be "a green factory, a lot of solar power,” with no toxic elements coming out. Tesla recently signed an agreement for Panasonic to increase cell supply volumes for the carmaker. While Panasonic has "got it covered" for Tesla's battery demand for 2014, it is for expected volumes of 40,000 global units.