• 02.27.14

Tesla’s Gigafactory Could Drive Down Electric Vehicle Battery Costs

The electric car maker is trying to make a mass-market electric vehicle. But first it needs to make cheaper batteries–a lot of them.

Tesla’s Gigafactory Could Drive Down Electric Vehicle Battery Costs
[Image: Tesla Motors]

One state is about to be the lucky recipient of a $4 to $5 billion battery production plant, courtesy of electric car maker Tesla.


Tesla, the company that has kept the phrase “electric car” at the forefront of popular culture’s consciousness, has so far only produced luxury vehicles: the Roadster, and the slightly cheaper Model S. Now, after years of production, Tesla is finally taking a swing at mainstream vehicles, aiming to produce a mass market electric car in the next three years.

But in order to make an affordable vehicle, Tesla needs cheaper lithium ion batteries. Hence, Tesla’s new “Gigafactory,” which will employ up to 6,500 people, span up to 1,000 acres, and churn out lithium ion batteries for 500,000 cars each year. Right now, it’s considering building the plant in Nevada, Arizona, Texas, or New Mexico.

On its blog, Tesla says that the factory will produce more lithium ion batteries in 2020 than the entire world produced in 2013. During the first year of the mass market vehicle’s production, the factory “will have driven down the per kWh cost of our battery pack by more than 30%.” Tesla should, in other words, be able to singlehandedly drive down EV battery costs.

Tesla plans on selling $1.6 billion in bonds to help finance the pricey plant. The company will invest $2 billion, and as-yet-unnamed partners will also pitch in.

About the author

Ariel Schwartz is a Senior Editor at Co.Exist. She has contributed to SF Weekly, Popular Science, Inhabitat, Greenbiz, NBC Bay Area, GOOD Magazine and more.