Tesla Bets its Future on Battery ‘Gigafactory’
(3BL Media/Justmeans) â Tesla Motors is set to make an announcement about its plans to build the worldâs largest lithium battery factory in the US. Tesla founder Elon Musk has called it the âGigafactory,â and claims that it will potentially transform the companyâs future.
The massive plant is critical to Teslaâs goal to produce an affordable long-range electric car in numbers that are large enough to put the company in the league of major automakers. Market analysts believe that Tesla needs to cut the cost of the battery in half in order to produce half a million cars. The company plans to achieve this aim with the building of the Gigafactory.
Musk indicated recently that the size of the plant will so huge that it would have a capacity equal to all lithium ion producing factories around the globe put together. That also includes lithium batteries that go into laptops, tablets and smartphones. Tesla is likely to build the factor in partnership with Panasonic, its current major battery supplier.
Tesla believes that the constraint of limited supply of batteries has held back the sales and growth of its cars. The companyâs consistent aim has been to produce a mass market car in the range of $30,000 to $40,000 that can travel long distances on only an electric charge. The current Model S from Tesla can travel over 200 miles on an electric charge, but its starting price is $69,000.
With the new proposed plant, Tesla expects to release the mass market car within three years. The sales estimate for 2014 for Tesla is about 35,000 vehicles. However, the company wants to sell more than 10 times this number, which would dwarf all other electric passenger cars now on the market. It would also catapult Tesla to the ranks of traditional carmakers.
Analysts say that Tesla is close enough to change the entire industry in the next 10 years to a level where electric cars are the preferred mode of transportation. While the company has not provided any clues regarding the cost of the Gigafactory, the estimates of market analysts range from $2 billion to $10 billion.
Image Credit: Flickr via randychiu