Tesla's products — the Model S, Model X, the up-and-coming Model 3, and the Powerwall — all require batteries to function optimally. And not just ordinary batteries — those that run Tesla's complex machines are quite expensive and heavy.
Even if Tesla manages to find a battery supplier that would be able to produce the huge volume of batteries that its products need, shipping them to Tesla's factories would still incur a huge bill. That is why Tesla decided to build the Gigafactory, a massive construction of buildings located in the middle of the Nevada desert.
Gigafactory was created so that Tesla would be able to come up with the special kind of batteries its machines need. The facility is being made in partnership with Panasonic and will cost $5 billion to build. It will take up to 6 million square footage of space and will employ 6,500 people.
Elon Musk refers to the Gigafactory as "a machine to build the machines."
The Gigafactory's Opening
The Gigafactory was launched on July 29 this year. Back then, only three out of the 21 blocks of structures were ready. The factory is currently manufacturing battery packs and will start the production of battery cells next year.
Tesla says its battery facility will be operating at a full capacity by 2020. By that time, the company claims, it will be able to produce more lithium-ion batteries than the world produced in 2013. Plans are now being made to build a second Gigafactory somewhere in Europe.
Tesla believes that having its own battery facility will reduce its battery prices by as much as 30 percent. This is a crucial point in Tesla's plans; it needs the Gigafactory to be up and running so that it can reduce the cost of the Model 3 and offer it at the starting price of $35,000. The company hopes that the factory construction will go according to plan just in time for the production of the Model 3 during the latter part of 2017.
Biggest Producer And Consumer Of Lithium-Ion
Tesla is currently the largest consumer of lithium-ion batteries in the world, and once Gigafactory becomes fully operational, it will also become its largest manufacturer.
For now, you will be mightily impressed with what the drone footage of the construction progress will reveal. The video shows four nearly completed portions in the south end of the Gigafactory. Take note that the video shows only 30 percent of what the structure will be like when it's complete.
