Tesla Plans Monster ‘Giga Factory’ To Handle Increasing Battery Demand

You’re an automaker who has just signed a four-year deal with a major electronics supplier to secure the supply of at least 1.8 billion battery cells to use in your high-performance luxury cars. But with massive expansion plans, you need more.

What do you do? Build your own battery processing plant, of course.

When Elon Musk sets his mind to something, it usuall happens. Image by Brian Solis

When Elon Musk sets his mind to something, it usually happens. Image by Brian Solis

At least, that’s what Tesla is considering, in order to ensure it has enough battery packs to keep up with increasing demand for current and future electric car models.

That’s according to documents released yesterday (via theverge.com) as part of Tesla’s quarterly earnings report. In it, CEO Elon Musk hints that Tesla is in the early stages of planning a battery factory which could very easily dwarf existing battery manufacturing facilities around the world.

Nick-named the ‘Giga Factory’ by Musk, the battery plant would not only produce battery cells and battery packs from their raw constituent materials, but would also recycle and reuse battery packs at the end of their useful life inside a Tesla electric car.

As you might expect, the factory won’t be a run-of-the-mill facility using industry-standard practice: it will be the largest, greenest battery plant the world has seen.

“This is going to be a very green factory. There’s going to be a lot of solar power. It’s going to have essentially zero emissions and there are no toxic elements that are going to come out… and we will build in recycling capability right into the factory,” Musk disclosed in Tesla’s official quarterly report.

European Tesla Model S

Tesla needs so many lithium-ion cells, making them itself makes perfect sense.

At the moment, Japanese electronics giant Panasonic provides Tesla with the battery cells it needs to power its Model S electric car. But with the Model X crossover SUV due next year and future models — including the enigmatic third-generation ‘affordable’ car and possibly even a fourth-generation car now in planning — Tesla will need an unimaginable amount of lithium-ion cells to keep up with consumer demand.

Producing its own battery cells to its own exacting specifications will not only give Tesla the chance to refine and develop its own battery cell technology, but will also enable it to insulate itself somewhat from a burgeoning price war as lithium-ion battery cell demand outstrips supply in an increasingly high-tech marketplace.  By making cells from their raw materials, Tesla should also be able to dramatically reduce the cost of cell production per watt-hour.

Likewise, while Tesla already has several battery recycling programs in place in the U.S. and Europe to help responsibly recycle and reuse battery packs from its Model S sedan and Roadster EVs, bringing recycling in house should save Tesla a lot of money in reprocessing and recycling fees. Further still, by reprocessing used batteries in the same location where new battery packs are made, Tesla could keep transportation costs to an absolute minimum.

Sadly, Musk wouldn’t give any more details about Tesla’s plans for the ‘Giga Factory, saying that the time hasn’t yet come to talk specifics. But as with other projects Musk is involved with, we suspect his willingness to broach the subject means Tesla is already looking into potential factory sites and is already in initial planning stages to make the Giga Factory a reality.


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  • Kalle Centergren

    Do you think he plans to putt it in texas in exchange for them changing their dealershipp laws?

    • Michael Ireland

      I doubt it, Kalle. Texas has been an “Oil Stronghold” for a long time, and its leaders don’t seem to be in the mood to change that any time soon. There are strategic reasons why it could be useful to build there, with some excellent Gulf-Coast shipping access, an existing heavy industrial base, and tons of sunshine for the solar aspect of things. But really, I’m inclined to think they’d choose somewhere else. I wouldn’t be surprised if they chose somewhere in California. It would be close to their headquarters, and I think the Californian economic climate is more friendly to alternative energy industries. On the other hand, they could build somewhere in Asia where the vast majority of battery production already exists. Or they could choose somewhere in Europe where they’re already working on manufacturing facilities. The options world-wide, each with its own benefits, make me think that Texas is pretty far down the list.

    • ivyespalier (Randy)

      I think it will near one of the coasts, likely the southern or western US. It would allow easy access to ships that bring in materials for batteries. The western US allows lithium from western South America to be shipped in easily and allows materials from Asia to be shipped in easily… South would have lower costs labor costs, i would think, and there is always the canal… The batteries could take a train to Cali. Either way, i think it will be on a large river or close to the coast.

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