Tesla Motors to Develop Gigafactory With Apple?


Tesla Motors, the Californian designer and manufacturer of electrical vehicles and powertrain components for automakers, might develop a partnership with Apple Inc. for the construction of a huge center for lithium-ion batteries to be named “Gigafactory.”

The car company from Palo Alto was founded by Elon Musk whose visionary goal is to revolutionize the car industry  by starting the production of a mass-market electrical car.

Tesla is no ordinary car manufacturer, in that it owns both production and distribution networks and has no dealership for retailing. The selling of its vehicles takes place exclusively through the company’s website.

Since its foundation, a decade ago, the factory has only produced two different models, the Tesla Roadster, the first sports car to be powered by a fully electrical engine, and the Tesla Model S, which is currently the only vehicle available. Both these products are entirely electrical, emit no carbon dioxide and can travel more than 200 miles on a single charge.

With the arrival of the economic downturn of 2008, Tesla was forced to let go many of his employees and in 2010 the electric car manufacturer received a half-billion dollar loan from the government to stay afloat.

In recent months, however, there have been positive developments thanks to the success of the Tesla Model S. The latter was the best-reviewed car of all times in America and its customer appeal allowed the factory to growth rapidly, to repay its debt and to strike a considerable success on the stock market, with the price of one share rising to $230 and almost doubling in value since last November.

In an article appeared few days ago on The Globe and Mail growth investment expert Chris Umiastowski wrote that Tesla Motor’s solid plans for the future, and its tremendous growth potential, may soon lead the group to become an influential global actor in the automobile industry.

With things looking up and the number of orders on the increase, Tesla’s greatest challenge at the moment is to produce battery components on a large scale in order to cover the growing demand for its S model and lower production costs.

To this end the company planned to build the Gigafactory which, according to rumors, might be realized with the help of the tech giant Apple Inc. The common interest in boosting the production of lithium-ion batteries and Apple’s availability of $160 billion to invest would make the two companies natural partners.

Furthermore, the inflow of cash that Apple could provide feeds hopes that Tesla might very soon increase its production and develop new models of clean vehicles with huge benefits for California  in terms of higher employment rates and lower air pollution.

Many analysts compared the two groups, especially on account of their capacity to open up entirely new markets with their innovative ideas. According to Umiastowski, Tesla’s interest in investing heavily in lithium-ion battery production will soon give it control of a critical sector, as it happened to Apple.

Plans to build the Gigafactory will also help Tesla to make a bigger dent into the Chinese automobile market, to which the factory from Palo Alto is expecting to start exporting vehicles in the spring.

In a recent article appeared on The Los Angeles Times, Tesla Motor’s CEO Elon Musk was quoted as saying he had talks with Apple and that the Gigafactory will be developed “with more partners,” but he defined “very unlikely” the possibility of a takeover, as the company is “super focused” on the goal of creating a mass market affordable car.

By Stefano Salustri

Latin Post
The Globe and Mail
The Los Angeles Times

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