Tesla’s latest models have captured hundreds of thousands of buyers, which has led CEO Elon Musk to focus efforts on upgrading manufacturing capacity, by building a Gigafactory in the outskirts of Reno, Nevada.
The $5 billion Gigafactory will be a major job source in Nevada, with 6,500 potential job positions over the first couple of years of operation. It is expected to stretch along 10 million square feet. Musk pointed out that it will be common to see wild horses in the proximity of the factory. He described the whole project as “incredibly romantic.”
Musk: ‘the Gigafactory is an incredibly romantic project’
The Gigafactory would satisfy a high demand for lithium-ion batteries. It would be capable of manufacturing three times more electric cells than it was expected in 2014. The project comes as a joint effort between Tesla and Panasonic.
The electric-car maker would also buy SolarCity, an American provider of energy, for $2.86 billion. This acquisition would allow Tesla to expand efforts on developing power grids and batteries. SolarCity is the U.S.’s most successful rooftop solar technology seller. Earlier in May, the company released an important amount of new services for power grids.
SolarCity’s goal is similar to Tesla’s: providing new alternatives to traditional fossil fuel technology. According to SolarCity, solar energy is always cheaper than other sources of energy, while it protects consumers from oil’s volatile prices.
“I think we’ll get into grid services eventually. The goal of Tesla is to accelerate sustainable energy, so we’re going to take a step back and think about what’s most likely to achieve that goal,” stated Elon Musk to Fortune.
Should mention that Gigafactory will be fully powered by clean energy when complete & include battery recycling
— Elon Musk (@elonmusk) July 27, 2016
Tesla and Panasonic are working together
As of last Tuesday, the factory was 14 percent complete. Initially, the plan was to make 35-gigawatt hours per cell and 50-gigawatt hours per module, but it appears that the companies will be able to manufacture 150-gigawatt hours under the same conditions.
This is mainly due to Panasonic and Tesla’s cooperation, as both companies have held close talks and determined what should be their goals for 2017 and 2018. Musk has compared joint plans with the Japanese giant to a production ramp in a shape of an S, which grows exponentially as time passes.
Executive vice president of Panasonic, Yoshihiko Yamada, commented on Tesla and Panasonic’s relationship. He explained that he was head of components when Tesla first approached the company as a supplier and a customer. As time went by, the plans for the Gigafactory started to flourish. Yamada attributes the unexpected possibility of doubling the factory’s efficiency thanks to joint efforts
Among the features of the factory, Musk showed the manufacturing robots in charge of the Powerwall, a 220-pound battery designed to provide energy in residential applications. It will be available in two versions: 7 kilowatts per hour for $3,000 and 10 kilowatts per hour for $3,500. Its purpose is to serve as a backup power unit to be combined with solar panels. This would allow users to benefit from sunlight at late hours and to reduce dependency on typical power sources.
Looking forward to the Gigafactory opening party on Friday next week. The scale blows me away every time I see it.
— Elon Musk (@elonmusk) July 22, 2016
An unexplored market
Elon Musk remarked that manufacturing batteries and power grids might once become as profitable as selling cars. He told journalists at the Gigafactory tour that the curve for electric grid cells appeared to be significantly faster than car sales, even when Tesla’s car manufacturing abilities are much more developed at the moment.
Most sources of electricity may one day be replaced by solar energy. Tesla’s objective is to provide a global alternative to traditional fuels, thus lowering manufacturing costs, impact on the environment and in the end, improving the user’s experience.
Although the near future for Tesla seems promising, the company still has to deal with the world’s t first reported death linked to an autonomous vehicle. Musk has already stated that Tesla would publish a blog post answering many questions about their Autopilot system, as there is still some discrepancy about the role of drivers managing autonomous vehicles. The system has a powerful machine learning structure and it is able to learn roads and communicate with online services.
Musk’s plans and projects have been criticized by Wall Street analysts, but as an entrepreneur, he has learned that critique is an indication of doing something right. The 45-year-old man is the co-founder of Paypal, Tesla and Space X. The latter has already conducted private travels to the International Space Agency.
Rather than shying out from risks, he has once more launched himself towards achieving his vision of the future of car manufacturing. He now wants to embrace the business of batteries and power grids. Tesla and SolarCity are reportedly working on grids and cells. This relationship would bring projects in the coming years, as both companies ally with Panasonic.