Tesla Motors Gigafactory Announcement – All The Details


Tesla Gigafactory Rendering

Tesla Gigafactory Rendering

It’s the announcement we’ve all been waiting for: Tesla Gigafactory

“As we at Tesla reach for our goal of producing a mass market electric car in approximately three years, we have an opportunity to leverage our projected demand for lithium ion batteries to reduce their cost faster than previously thought possible. In cooperation with strategic battery manufacturing partners, we’re planning to build a large scale factory that will allow us to achieve economies of scale and minimize costs through innovative manufacturing, reduction of logistics waste, optimization of co-located processes and reduced overhead.”

“The Gigafactory is designed to reduce cell costs much faster than the status quo and, by 2020, produce more lithium ion batteries annually than were produced worldwide 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. Here are some details about what the Gigafactory will look like.”

And that concludes Tesla’s official announcement. Yep, that’s all.Β  We’re actually a bit disappointed that Tesla didn’t provide more details. However, you can enjoy the below graphics that Tesla Motors put out concurrently with the Gigafactory announcement.

Separately Tesla announced a new offering of convertible senior notes worth between $1.6 to $1.85 billion to help fund the plant as well as accelerate US sales, and development of their 3rd gen car.Β Β  (Full story can be found here)

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85 Comments on "Tesla Motors Gigafactory Announcement – All The Details"

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So they haven’t picked a location yet. But looks like my home state of Texas is on the short list!

I’m rooting for New Mexico, the one state in the US I confess to really loving in that irrational way you sometimes love a person.

– best solar potential,
– the most tolerant and inclusive social environment (relative to the competition),
– and a workforce that has proved its technological muster in running Intel’s most cost-effective factory cluster in the US for over two decades.

I’m surprised Oregon is not on the short list.

It is right across the border from lithium resources in Nevada, and seems better placed than others from a transport position, to send the finished packs to Fremont, and for getting the c.15GWh/yr from Panasonic that it looks like they plan on still importing, which makes sense as they don’t want to cast the capacity lose.

Oregon also has excellent renewable resources for energy.

Well, its out, although why is unclear.

Because it rains all the time in Oregon – just like it does in Seattle πŸ˜‰

That is why no one has ever considered founding a high tech company in Seattle………….

Not one which relies heavily on solar generation. πŸ™‚

I think they’re going to tell Texas to scrap their dealer franchise laws or kiss the gigafactory and its jobs goodbye.

That might be just the leverage they need…

That is my assumption, as well.

The State of Texas doesn’t allow Tesla Motors to sell the Model S directly to buyers, unless it is a “dealership”, so Musk may decide against Texas if this problem isn’t resolved. I am in favor of Texas since my Dad lives there, but Musk has a different opinion.

Hey, Elon, bring your gigafactory to the Valley of the Sun in Phoenix! Plenty of year-round solar, lots of open land, a lot of skilled employees, and we’re nearby.

New Mexico, please – Arizona’s gotten more that their share in proximity-to-valley
Sure, you hafta’ transport alla way through ‘zon, but we have Plenty o’ breaks available and an under-employed populace. Hell we’ll throw in UPS air transport to offset delivery costs.
uhmm.. pretty-please?

Texas won’t even sell tesla cars so so un-american. Texas is the most un-american state out there I think not

I assume that slide 1, where they give cell output at 35GWh/yr, but battery packs at 50GWh/yr, is accounted for by continuing imports of Panasonic packs from Japan, at 15GWh/yr?

Any thoughts, anyone?



They must be planning on scrapping a lot of Teslas! πŸ™‚

No silly, they are just thinking ahead. Li-ion battery recycling is still in its infancy with no high-volume process anywhere AFAIK.

This is a huge environmental issue (recycling should cut battery footprint by 50% according to ANL experts), but also an economic one.

Tesla integrating its own recycling operation into its Gigafactory is great news.


It looks as though you missed the smiley!

Indeed. I guess we need InsideEVs to give us a sarcasm font…

Its just capacity. They may be coming from a giga factory in china, Korea, etc.

Ultracapacitors, duh. πŸ˜‰

(to be clear, this post is sarcasm, while I think UCs are a great idea, I don’t think they’re going to meaningfully contribute to EVs for a long time, if ever)

Anthony, UC and Lithium batteries have already been combines in the BlueCar and has about 150 mile range. A UC can help an EV with small cost . They just put them in parallel with the batteries.


Yes. Make 35GWh/yr of cells in-house, bring in 15GWh/year from other cell factories, deliver 50GWh/yr of finished packs ready to install on cars.

Correct, except it would be cells coming not packs and those cells could be coming from plants located anywhere else not necessarily Japan.

Recycling is part of the in-plant 35GWh/yr capacity according to the slides. The old cells will be broken down and separated into their base materials. Those materials will combine with other raw material in the production of new cells. Looks like they plan the facility to also be a recycling center as well according to the flow chart.

Very ambitious, very Tesla!

I sincerely hope it works, because recycling will be imperative. Between Tesla and SolarCity and (maybe) third-party buyers, there are going to be a staggering amount of spent cells before too long…

How can the cell output is less than the pack output.. In ideal world isn’t it should be other way round?

By Claudia Assis
SAN FRANCISCO (MarketWatch) — Tesla Motors Inc. TSLA +2.13% is looking for sites between 500 acres and 1,000 acres in Arizona, New Mexico, Nevada or Texas to build a giant battery factory, which could cost as much as $5 billion, the electric car maker said in a regulatory filing late Wednesday. The plant would open in 2017 and employ about 6,500 people. It would reach full capacity by 2020, enough to supply power for 500,000 cars a year.

That is just a carrot to dangle in front of the Texas statehouse, before they snatch it away and give it to AZ of NM. Oh we can’t sell our cars directly there, oh well…I guess we can’t build our factory there. Of course if they did build it there Texans could say…everything is bigger in Texas, now including the battery factory.


+1 right in line with previous comments about building pickup trucks in Texas. Sooner or later, as Texans see the spoils going only to neighboring states, legislators will get phone calls and letters in sufficient quantity to swing the vote.

David, Texas is a great location for the factory. I am sure Musk is looking at cost of solar, wind, transportation, labor, and what each state will give. I would think that Arizona would have been higher than texas, but the propensity of this latest bill may make it a worse place to do business than texas or Nevada. The goal of ramping up to batteries for 500,000 cars by 2020 means even if they are 40kwh packs, that is 20 Million kwh of batteries.

I would add on details, it looks like partners will contribute about $1B according to the previous story. Tesla is issuing $1.6B of convertable bonds, anounced today.

They are claiming 50GWh/yr at the pack level, so for 500,000 vehicles they are reckoning at an average of 100kwh.

I’m not sure that the figures are supposed to be accurate enough to draw conclusions about average pack size from, as they are probably more on the lines of saying that they intend to produce ‘in the area of’ 50GWh and 500,000 vehicles, but if that were not the case then the pack in what they see as overwhelmingly their biggest seller, the Model E, and the range of 200 miles, would have to shoot way up by 2020!

Of course, I forgot about Solar City.

As well as the 500,000 EVs, at an average of maybe 60-70kwh, Musk is apparently allowing for vast amounts of storage for home solar.

Its about time he stopped thinking small!

My only problem with this is that power batteries used for storing solar will probably charge and discharge fully everyday where the batteries in a tesla tend to be discharged maybe 25% most days and recharged every night. These require different chemstries to deal with different cycling levels. Then again, Tesla probably has someone much smarter than me working on that issue.

I don’t they they will fully discharge. They will only supplement the grid when necessary, to even the load out. (Like a big capacitor)

Windmills and more than day’s capacity in battery storage. They will likely never see 100% discharge nor very close to it.

Dr. Kenneth Noisewater

Nevada makes more sense, as it’s closer to both the lithium supply and the assembly plant. Plus, its tax regime is much friendlier.

However, Texas is a bigger market, and if they can use their factory as a lever to get a dispensation to sell there, it could be worth the difference. Plus, presumably any future Tesla assembly plants will be sited near their gigafactory, so that’s something else they can use as a carrot..

Eyeballing the charts, by the time Tesla is producing 35GW/h/yr in 2020 that will represent perhaps 40% of the total volume produced worldwide.

All of the states have great renewable resources. Nevada, Arizona, and New Mexico have lots of sun and Texas has lots of wind (and sun).

Nevada would be closest to Fremont Factory. Cheap land and cheapest transportation cost to Fremont of any of the finalist locations.

Nevada also has new lithium mining operations starting this summer that will be able to produced 26k tons per year of lithium at full capacity. At full capacity Gigafactory will consume 25k tons of lithium per year. Imagine that?

Nevada wins on the transportation front – a quicker trip down I-80 vs. I-40 and then coming up the 5 in California.

Plus Nevada is very mining friendly – so if the raw materials are here in the state, feel free to dig them up! πŸ˜‰

I’m pretty sure the finished packs will not go by highway. There is a rail yard right at the back of the Fremont factory. There is also a rail line from Reno basically parallel to I-80 and I-880 straight to the Fremont factory.

Correct. The rail line at Fremont is the old SP, IIRC, so a trip from Reno would be via one railroad (UP), no interchange needed. OTOH, if just-in-time delivery is the model the old transcontinental route over Donner Pass gets blocked a lot, and the backup route of the old WP through Feather Canyon is often blocked at the same time. This gives some advantage to rail coming from TX, NM, and AZ via BNSF, then trackage rights to Fremont.

Realistically, via rail transport costs will not be significantly different either way

The sun belt choices suggest heavy solar powering – all 4 places not only have lots of sun but also lots of effectively empty land begging for large scale solar.

I’m sure that Tesla will do the whole bidding thing with all of the states to get the best deal. At at some level it might really be fun to repurpose all those old well jockies in Midland/Odessa/Big Spring to be EV factory workers. But if it comes to a tiebreaker I’ll bet the culture of NM (thinking mainly Santa Fe/Taos) wins over the sophisticated decision-makers at Tesla.

“oil well jockies”

Is it just me or does the rendering show two rail sidings and loading/offloading equipment?

I think so.

He could build an experimental Hyper-loop between Fremont and the Nevada location!

Hyper loop. I like it! Reno/Sparks area seems a perfect fit. Lots of skilled educated folks there.

http://www.westernlithium.com/media/industrynews ‘The Energy Report Interview with Chris Berry (3/27/12) “Western Lithium has a clay deposit in northern Nevada called Kings Valley. It recently completed a prefeasibility study, which shows very strong economic potential. Western Lithium will have the ability to produce up to 27 Kt/year of lithium carbonate several years down the road after commercial production commences. One of the keys to Western Lithium is its potential operating costs, which are sub-$1,000/t when byproduct credits are included. This is what would allow a company like Western Lithium to compete with the big boys.’ Be careful of the distinction between lithium carbonate,which contains around 18.2% pure lithium by weight, and lithium. Car batteries use ~1kg/kwh of lithium CARBONATE. 27kt/yr is enough then for around 27Gwh/yr of car batteries. The figure of 1kg/kwh is not exact however, and the ~4kg of lithium in the Leaf battery runs to around 22kg of lithium carbonate, or enough for ~30GWh/yr of batteries. Of course, nothing about these figures are exact anyway, not the lithium carbonate production, or the battery production, as well as the exact amount per kwh. What it boils down to is that Musk intends to use the entire Nevadan output of lithium… Read more »

“So where would the lithium carbonate be got from, quickly to enable the further ramp up to, initially, 5 million that would be required?”

My guess Wyoming or Chile.

Once we have “proof of concept” and mass market demand then Elon can go to mining companies and say ” we will need x tonnage of lithium by x date” without being laughed out of the room.

The mega mining companies that would not listed to some nerd CEO from silicon valley selling electric cars to wealthy hippies. But once you are selling hundreds of thousands at full price like hot cakes and Wall Street is projecting millions sold in the very near future……

Where there is proven demand supply is not far behind.

I’m going to look into the figures tomorrow.
Depending on where they are it is not in general however that easy or quick to bring new mining resources online.
Some of the best locations such as Bolivia have very underdeveloped infrastructure, so you have to build that out first before you can start thinking about the actual mining.
That is why there was the recent kerfuffle about rare earths, not due to any absolute shortage of them, but because the lead times to bring them on line especially in remote locations like Greenland are several years, whilst China could if it were so inclined cut the supply of 90% or so of several of them overnight.

Ramping supply by the factor of 30 which would be needed just for the US to switch to battery cars from the projected output of the Gigafactory would be tough to do quickly.

Success by 2020 for Tesla’s plans would mean that would be what was needed though, as the demand and cost would be proven.

Mining companies have three years.

Spanish mining companies have been wanting to invest in Bolivia for over a decade but the Socialist Government there prohibits it. They don’t want to export lithium they want to export batteries.

No such problems in Chile or Wyoming. The deal with rare earths is China underpriced the market and bankrupted non-Chinese mining operations. Now they are pulling back and want to control the export of rare earths for what they think are strategic reasons.

In Greenland you have the natives wanting jobs and the environmentalist in Denmark being extra cautious in protecting the environment. Greenland is to Demark what Puerto Rico is to the USA.

Again Western Lithium is already opening their new lithium facility in Nevada THIS summer. It will be able to supply all of the first Gigafactory’s lithium needs once fully operational . I pretty sure they will achieve that by the time the Gigafactory comes online.

You don’t seem to have been following how many years the pipeline to take EXISTING tar oil sands production to market has been in the work.
And it is still not built.

Its just a touch optimistic to think that they are going to be able to prospect to find which bits of this resource are rich enough and most suitable for early development, develop the mine and also build the transport infrastructure by 2020.

Maybe somewhere which doesn’t have the US planning system, environmental impact statements and so on, but surely not in the US.

Now we just need a Hyper Loop to transport the batteries from the battery factory to the car factory… hehe…

The Gantt chart makes it look like the building of the factory will start as early as in April this year. I hope that is true, Tesla will deliever once again. Elon Musk talks big and I’m a big fan of his but I did not think he would actually build the Giga factory, at least not for a year or two.

I’m surprised that they are sticking to cylindrical cells instead of prismatic. Why? Perhaps to use the space between cylindrical cells for thermal management?

From a cost per kWh level, cylindrical cells are the cheapest to produce. Plus Tesla has years of experience designing packs with these cells.

I wonder how much weight is taken up by the cylindrical shell on a thousand batteries? I’m sure they want to make it as thin as possible?

Yeah, the weight and shape just don’t seem great. I’d think the plastic/foil pouches assembled into packs would be pretty damn cheap. That way there is only one hard container (the pack structure) instead of two (the cylindrical shell and pack structure)

The purpose of the announcement of multiple locations in the Great Southwest is to institute a bidding war between the listed states, to see who will offer the best deal to have the factory located within their state. At least it could be a factor if one state offers their first born, for example. Figuratively speaking.

I would have to imagine any state in the union would be falling all over themselves trying to get at shot at this factory. I mean 10 million square ft., 6500 employees, high tech industry…wow! Those 4 states are going to need to be very accommodating to win this project.

I think it’s interesting that California is already off the table.

Probably on the principle of spreading the goodness, and the political support, as California will already be a backer due to Fremont being located there.

That is the only reason I can see Texas still being in with a shout, as if the battery factory was there two out of three of the most populous states would have already bought in to Tesla.

Otherwise Nevada is by far the most obvious as the mines are there, but it is short of political clout.

California has other problems. If we assume a location suitable for lots of solar – meaning cheap land with lots of sunshine – you have to go south. You run into problems with housing costs and possible water too. Even the cheapest housing locations in California are more expensive than most of the nation. In addition, if you are going to employ 6500 you would ideally like a place where labor is already cheap and ideally underemployed. This is why Nissan chose locally-depressed Smyrna back in 1982, for example. Except for the area immediately around Santa Fe none of the prospective locations bad for housing and labor – and most of them are really good. As I pointed out in another post, ironically one of the best locations may be the center of the west Texas oil country – Odessa/Midland/Big Spring – where the land is useless, sun is plentiful, housing is dead cheap (if you’ve ever been there you know why) and lots of labor available. And being Texas, basically no workers rights. But I’m guessing NM or NV. Of the 4 states listed those are least likely to see an anti-EV legislative backlash take hold, re: Georgia and… Read more »

You also forgot, probably the best wind resource in the country. From the wind/solar side, the Texas panhandle is the best choice.

I also think there is some red tape with doing chemical work that would be easier to get through in Texas. SpaceX does their rocket testing in Texas for those reasons.

Texas can’t try to pass the “Tesla law” for retail sales for another year and a half. So I think Texas will end up losing this bid because of that law not passing. Nevada seems like the next most logical choice.

Dr. Kenneth Noisewater

Perry (or his successor, likely Abbott) can call a special session if he wants to.

Nevada is my odds-on. Low cost labor pool, the state with the highest unemployment rate, having just broke below 10%. It’s got the NREL sun going for it (though Josh has a good point about TX wind). Neighboring northern CA might be worth a few points, too.

As suggested by DaveMart and echoed by Anthony, Nevada seems to be the front-runner:
Tesla didn’t pinpoint potential sites in those states, but the Reno, Nev., Gazette-Journal reported last week that Tesla is interested in a site near the Stead airport and the Tahoe Reno Industrial Center, east of Reno. It would be the closest state to Fremont, Calif., where Tesla makes its electric cars.

The Tesla factory, although large for a battery factory, is hardly ‘Giga’ by other industrial standards.
6,500 employees, and around a square mile of space?
I doubt that that is enormous by the historic standards of Detroit.

Even the cost of $5 billion or so is not too extraordinary,

It is not Ford’s River Rouge Plant.

Maybe in 2019 when Tesla is well on its way to maxing out capacity at the Gigafactory they will announce the Googlefactory πŸ™‚

‘The Rouge measures 1.5 miles (2.4 km) wide by 1 mile (1.6 km) long, including 93 buildings with nearly 16 million square feet (1.5 kmΒ²) of factory floor space. With its own docks in the dredged Rouge River, 100 miles (160 km) of interior railroad track, its own electricity plant, and ore processing, the titanic Rouge was able to turn raw materials into running vehicles within this single complex, a prime example of vertical-integration production. Over 100,000 workers were employed there in the 1930s.’ (wiki)

So they are not too far apart in area, but the workforce is projected to be small in comparison.

Not too surprising with modern automation, really.

The largest number with a name isn’t “Google”. It is “Googol”. Look it up at Google!

BTW, after Giga we have Tera, and Peta, so no “Google” or “Googol” is needed.

Huh? It would double the entire world’s 2013 lithium battery production.

Which bits of:
‘ although large for a battery factory, is hardly β€˜Giga’ by other industrial standards’

are unclear?

Large and doubling the entire world’s current production describing the same concept. Giga seems more appropo, rather than simply large by battery but nothing special by totally unrelated industry standards.

I assumed that the term referred to the order of magnitude of cell capacity manufacturing, as in 35 GWh/yr of cells.

They could get Texas to allow direct sales as part of their incentive package….pretty hard for politicians to ignore 6,500 jobs no matter who is whispering in their ears!

Texas does not deserve to be on the list, Tesla should choose an state that supports EVs and progress, Texas is a rich oil state and the oil special interest would fight any company that may affect their bisiness model.

However, the prospect of getting the Gigafactory might give the Texas legislators some pause, and turn a deaf ear to the oil and dealership lobbyists.

The Gigafactory is big… and Texas does like big things.

Looks like the rendering slide is missing a dotted arrow line to the solar on the roof. Can’t imagine they have a “sustainable” project with that much area under roof and not have solar on top, especially in the hot desert. The color for some of the roofs also matches the solar land areas.

The rendering is a concept drawing, not in any way intended to be accurate to details. This railroad buff can tell that by the non-usable track layout alone.

The wind turbine siting is actually worse than the solar siting. There are rotors in there that would literally be colliding with each other mid-air. That is not addressing the issue of wake propagation to downwind rotors and construction difficulty of ridge line placement.

So like Red said, this is just a concept graphic. Created by graphic designers, for poliliticians, not engineers.

The person that did the site rendering didn’t think Texas has a chance.

Nevada is the easiest decision.
Low transportation costs and easy reach to equipment from the coast.

As far as personnel, it’s not even worth considering. The technical population in the US are mobile and will move anywhere.

I live in New Mexico and the brain drain here is pathetic.
I better leave before someone needs to feed me…..
Nevada, YEAH!!

Brain drain can be solved, ask Arizona

I’ve voting for an Arizona giga factory. We have the most Sun, lots of High Tech companies and the University. We have INTEL, a new Apple factory and 60 chip companies. No weather issues so shipping can run smooth all year. Lots of workers for the 6,500 jobs too.

We could even allow direct Tesla sales to make it even sweeter . Tax breaks and incentives. I hope they can’t resist.

Avondale, AZ would be a great place for the Gigafactory. It is on west side of the Phoenix metro area so freeway traffic is optimal for shipping west and for commuters heading west in the morning and east in the afternoon. Goodyear, AZ, Tolleson, AZ, and Buckeye, AZ are also very good locations nearby Avondale. Buckeye being almost too far west. The new Apple plant will be in Mesa, AZ. That is on the wrong side of town. All shipping from Nevada and California would need to pass through the entire metropolis to get to Mesa. A perfect location for the factory in my opinion is south of I-10 a couple miles between 91st Ave and Litchfield Rd. There are a lot of farm fields and open area prime for development. Infrastructure has been heavily built in the area due to the housing boom and bust. An underused yet active east-west railroad runs through this district. Numerous shipping depots are located in this area for the same reason. Two new large distribution warehouses are in cunstruction right now in this area. Avondale Mayor Marie Lopez Rogers, Maricopa Association of Governments Economic Development Committee head is very much on board with… Read more »