Tesla Gigafactory begins battery production
Tesla Motors has begun pumping out battery cells at its mushrooming Gigafactory just east of Reno, the company announced Wednesday.
Tesla, in partnership with Japanese battery-maker Panasonic, successfully tested a batch of its lithium-ion cells last month. The lipstick-case-shaped cells are the life-blood of both electric cars as well as Tesla's line of electricity storage units.
The initial run of batteries will be built by "several thousand" employees, but that workforce will swell to 6,500 at peak production sometime next year. According to a company statement, that 2018 peak would yield "35 GWh/year (gigawatt-hours per year) of lithium-ion battery cells, nearly as much as the rest of the entire world’s battery production combined."
Tesla officials say that ultimately employment at the Gigafactory will peak at 10,000, with an additional 20,000 to 30,000 jobs created "in the surrounding regions." That's in line with previous job projections.
Reno-area media got a tour of the massive building in 2016. Brian Duggan, Jason Bean/RGJ
Tesla's U.S. job creation claims come at a time when the incoming administration of President-elect Donald Trump has been squarely focused on job flight. On Tuesday, Ford Motor, which has been criticized by Trump for manufacturing its cars outside the country, announced that it was scrapping plans for a new plant in Mexico and instead would reinvest in an existing facility in Michigan.
Tesla CEO Elon Musk is part of a Trump economic advisory committee that includes Uber CEO Travis Kalanick and Pepsi CEO Indra Nooyi.
The new batteries, which previously had to be shipped to Tesla from Japan, initially will be installed in the company's Powerwall and Powerpack storage units.
Eventually, the batteries will find their way into Tesla's forthcoming Model 3 sedan, a comparatively mass-market product that starts at $35,000 compared to the nearly $100,000 for loaded versions of the Model S and X sedans. Model 3 should begin production this summer.
The Model S and X will, for now, continue to use batteries imported from Japan.
Dubbed the 2170 Cell, the U.S.-made battery is critical to Tesla's mission of making electric vehicles affordable.
"By bringing down the cost of batteries, we can make our products available to more and more people, allowing us to make the biggest possible impact on transitioning the world to sustainable energy," the company said.
Musk, who also runs rocket company SpaceX, has a broad vision for the Tesla brand, which now includes solar panel manufacturer SolarCity. The idea is to have consumers drop into a Tesla showroom to purchase solar panels, a Powerwall unit to store the electricity, and a car.
Analysts have been impressed with the scope of Musk's plans — he's also talked about sending humans to colonize Mars — but remain concerned about his ability to meet investor expectations. Tesla shares dropped 2% in after-hours trading Tuesday after the company announced that it had missed its delivery target for Q4 2016.
Model 3, which currently has $1,000 deposits from nearly 400,000 customers, will be a make or break product for the Palo Alto, Calif-based company, a vehicle that Musk believes can more than quintuple Tesla's production current output of around 80,000 cars a year to 500,000 units a year.