What Gigafactory Means For Electric Vehicles


Tesla‘s new Gigafactory opened at the end of July in Nevada, with much excitement from both the media and the general public.

Only 14 percent of the massive structure has been built, with the rest of the $5 billion project to be concluded by 2020.

According to Tesla, battery cell production will start in 2017; by 2018, the Gigafactory should be cranking out cars to the tune of 500,000 Model 3s per year.

A big part of Tesla’s need to build the Gigafactory lies in the reduced expenses for lithium-ion battery production it provides.

tesla-gigafactoryThe Gigafactory is a marvel of modern production technology, “a machine that builds machines,” as Tesla CEO Elon Musk puts it.

In addition to being cool, it offers unprecedented economies of scale for lithium-ion battery production, lowering the price from $190 per kWh in April 2016 to an estimated $130 per kWh once complete.

The huge scale of the production, coupled with reduction of waste and a vastly reduced supply chain, provide significant savings and ultimately a 30 percent reduction in battery production costs.

The Gigafactory is a big statement from Musk, and a clear sign that Tesla believes the world is ready for full electrics. But does the world agree?

Are lithium-ion batteries the way to go?

The total number of cars sold in 2015 was around 72.37 million.

Electric vehicles accounted for around 0.8 percent, or 540,000, of that number, a significant step up from about 376,000 EVs sold in 2014, but still less than 1 percent of cars sold worldwide.

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Source: What Tesla’s new Gigafactory means for electric vehicles

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