Tesla is still two years away from completing Gigafactory-1 -- a massive lithium-ion battery production facility outside Reno, Nevada, which will cover 15 million square feet -- but that doesn't seem to stop the company from investing even more in manufacturing. We knew there would be another battery production facility in Europe with construction starting as soon as Tesla would decide on a good location but a recent company announcement claims there will be at least five Gigafactories.
“Installation of Model 3 manufacturing equipment is underway in Fremont and at Gigafactory 1, where in January, we began production of battery cells for energy storage products, which have the same form-factor as the cells that will be used in the Model 3,” a letter to Tesla shareholders reads. “Later this year, we expect to finalize locations for Gigafactories 3, 4 and possibly 5."
Gigafactory-2, up until recently a name attributed to the planned Europe plant, is now the SolarCity Gigafactory in Buffalo, New York. Rooftop solar production should start in the second half of 2017.
After Tesla Motors merged with SolarCity, it was clear the company aimed to dominate the consumer sustainable energy market. To achieve this goal, Tesla put its money on a sustainable trident: electric cars, solar energy (both rooftop and utility-scale), and energy storage. Elon Musk has been able to grow Tesla from near bankruptcy into a $30 billion company by making good use of economy of scale. Musk knows that if his products are to compete with mainstream liquid fuel-powered cars and utilities, then these have to be cheaper and better.
"We are excited about 2017, as we expect to see significant advances across our transport, energy generation and storage product lines," Tesla wrote to its shareholders.
"You will not buy a better car for $35,000," Elon Musk said after Tesla gave the green light for Model 3 pre-orders -- more than half a million units have been ordered so far. Tesla's first affordable electric vehicle should start production in July. By September, 5,000 vehicles will roll out of the south Fremont, California plant every week. At least twice as many vehicles will be produced per week in 2018.
At Gigafactory-1, Tesla wants to make as many batteries in a year as all lithium-ion manufacturers all over the world produce -- and that's only the beginning. Already, a small section of Gigafactory-1, which is about 14% complete, is churning out PowerPacks and PowerWalls that are 35% cheaper, as we reported earlier this week.
But over-expansion can also be dangerous. In its letter to shareholders, Tesla claims the company will invest "$2 billion and $2.5 billion in capital expenditures ahead of the start of Model 3 production." Musk once said that the world would require 200 Gigafactories to sustain a 100% transition to electric cars and renewable energy. Hopefully, shareholders will let him build five, at least.