Tesla has finally begun producing batteries at its massive Gigafactory

Tesla gigafactory

Tesla began production of battery cells at its Gigafactory
on Wednesday.

The battery cells currently in production will be used for Tesla’s rechargeable home battery, Powerwall 2, as well as its massive commercial battery, Powerpack 2. The electric-car maker said in a statement that it aims to begin production of battery cells for the Model 3, its first mass-market car, sometime in the second quarter.

Producing the batteries at the Gigafactory will bring down costs, enabling the company to price its Model 3 at about $35,000.

The Gigafactory is Tesla’s massive battery plant located in Sparks, Nevada. It plays an integral role in helping the company bring down the cost of its electric cars because it allows the company to use economy of scale to bring down the cost of making batteries, which are one of the most expensive parts of an electric car.

Tesla has partnered with Panasonic to produce the battery cells at the plant.

Tesla gigafactory

The factory itself is still less than 30% finished, but already spans 1.9 million square feet and houses some 4.9 million square feet of operational space across several floors, Tesla said.
The company is building the Gigafactory in phases so that Panasonic can begin manufacturing immediately in finished areas of the building and gradually expand, the company said.

This gradual approach also lets Tesla learn on the go, allowing for it to make adjustments in manufacturing techniques on the fly.

By 2018, Tesla aims to be producing 35 gigawatt-hours per year of lithium-ion battery cells and 500,000 vehicles per years, an ambitious goal considering the company produced some 83,992 vehicle in 2016.

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