Tesla names potential sites for Gigafactory as either Arizona, New Mexico, Texas, or Nevada according to reports from the electric car maker. The new factory is expected to cost over a billion dollars and will allow Tesla to build lithium-ion batteries at a breakneck speed, reducing costs of their cars and catapulting production numbers to that of major automotive manufacturers such as Ford and GM. Past sales have been brisk despite the Model S price tag of $69,000 but founder Elon Musk is not satisfied with a minor portion of the market. The Model S has proven itself to be a luxurious, capable machine, carrying passengers and cargo 200 miles on a single charge, with sports sedan performance all the while. The new Gigafactory will employ roughly 6,500 hundred people and is expected to cover an area of 500 to 1,000 acres.
The announcement of the Gigafactory stirred up speculation about more than where it would eventually be built, but also who would partner with Tesla in the construction of the factory and the batteries it will produce. Musk was quoted as saying that since Panasonic has been such a close partner with Tesla so far, they can expect to be called upon in this new venture as well. Panasonic stock rose after the announcement. Musk went on to say that he has always planned to partner with companies that are intimately familiar not just with building batteries, but also with the components that go into them, anode and cathode materials, as well separators and electrolytes. Because the factory is expected to produce more batteries in a year by 2020 than were made globally in 2013, it is imperative that access to vast quantities of these materials be secured. After Tesla names potential sites for the Gigafactory, electronics and manufacturing companies around the world are waiting with bated breath to see who will be invited to benefit.
Although the main effect of the plant will be low-cost high effectiveness batteries to be used in Tesla Model S sedans and the upcoming Model X SUV, it is expected that the Gigafactory will be putting its massive production capabilities to work for other ends as well. With mobile devices on the rise every day, and no end in sight for demand of cheap, small, long-lasting batteries, Tesla stands to make a killing leasing out portions of their production floor, to either Panasonic or other partners that may be announce in the future. There was talk of Tesla executives meeting with Apple figures, but Musk declined to confirm what they could mean. What car buyers can bet on however, is a drop in price and an increase in sightings of the very desirable electric roadster. As America warms further to the idea of electric cars and other vehicles, advancements in infrastructure will not be far behind, but until major power plants begin to burn something other than coal or oil, reduction in foreign dependency may lag behind. Since Tesla named potential sites for their Gigafactory, where will the new Silicon Valley be located?
By Daniel O’Brien