Tesla recently announced its plans to build the world´s largest and most advanced battery factory in Nevada. It goal is to have 50 GwH in annual battery production by 2020, enough power for 500, 000 Tesla cars.
Over 6,000 jobs are expected to be created at the new Gigafactory, along with accelerated economic growth in the surrounding area. Nevada has offered a substantial incentive package to Tesla in order to attract the company to the state.
The Gigafactory may help to further the advances of the electric car. Currently, electric cars are at a huge disadvantage because of the cost of batteries (the batteries are approximately 50 percent of the car´s total cost). It’s hoped the factory will result in lower battery costs and thus the car price will decrease.
Tesla and battery producer Panasonic are investing roughly $5 billion in the lithium-ion battery plant. The factory will produce batteries for the Model 3 which is expected to be launched after 2017. The costs need to be cut to $100 per kilowatt-hours which means a 30 percent reduction in costs over the next ten years. Elon Musk (CEO and founder of Tesla) said he would be disappointed if it took ten years to fulfill this goal.
In September, California-based consulting firm Menahem Anderman published a report on the Tesla´s battery project. Anderman states that a cost of $200 per kWh is “unlikely before 2020.”
Either way, the Gigafactory is a step in the right direction for electric cars and another challenge to traditional oil and gas.
(Photo by Max Whittaker/Getty Images)