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Tesla will build a complete lithium-ion battery plant in U.S.

By: AUTOMOTIVE NEWS

February 27, 2014

Tesla Motors Inc. said it plans to invest $2 billion in a U.S. car battery plant that will be capable of supplying lithium-ion packs for 500,000 vehicles a year by 2020, including an in-house separator manufacturing.

The "Gigafactory," which is expected to go online in 2017, is part of Tesla's blueprint for a more affordable electric vehicle and would be the first major, integrated U.S. facility producing battery cells for electric cars.

Although the company has not released many details yet, it does call for a complete production cell, from separators to final battery packs. Separators are a thin thermoplastic film at the center of every battery.

The company said in a blog post on its website Feb. 26 that it has narrowed the list of sites for the plant to locations in Nevada, Arizona, New Mexico and Texas and that "final site selection activities are underway."

In addition to its own investment, Tesla will involve key suppliers who are in turn expected to invest another $2 billion to $3 billion by 2020.

The giant factory will allow Tesla "to achieve economies of scale and minimize costs through innovative manufacturing, reduction of logistics waste, optimization of co-located processes and reduced overhead," the company said.

By 2020, the plant is projected to produce more lithium-ion batteries annually than were produced worldwide in 2013.

"By the end of the first year of volume production of our mass market vehicle, we expect the Gigafactory will have driven down the per kilowatt cost of our battery pack by more than 30 percent," Tesla said.

Tesla expects the plant to employ 6,500.