In a letter to shareholders about the company’s earnings, Tesla Motors CEO Elon Musk announced plans for the electric vehicle manufacturer to begin producing its own battery cells at a massive ‘Gigafactory’ in California. Included in the last paragraph of the letter, the details of the company’s plans were scant, but it was clear that the purpose of the plant–which will be the largest of its kind in the world–will be to drive cost reductions and innovation in lithium-ion batteries.
Batteries will be manufactured from the ground up at the Gigafactory so that the company is able to streamline the production process all under one roof. At the moment, Tesla’s battery cells are supplied by Panasonic. It is unclear if Panasonic or any other 3rd-party battery manufacturers will be brought in on the venture, but there is speculation that they will.
“With this facility, we feel highly confident of being able to create a compelling and affordable electric car in approximately 3 years. This will also allow us to address the solar power industry’s need for a massive volume of stationary battery packs,” Musk said of the plant.
The synergy between Tesla’s and sister company SolarCity’s endeavours is obvious and intentional, with cross-overs between the two companies already underway. With the Gigafactory, Tesla Motors could make big waves in the way that people get around and generate/use electricity.
Quoted in Greentech Media, Morgan Stanley analyst Adam Jonas said that, “We are witnessing the most disruptive intersection of manufacturing, innovation and capital experienced by the auto industry in more than a century. … Tesla may be in position to disrupt industries well beyond the realm of traditional auto manufacturing. It’s not just cars.”
Top image: Tesla manufacturing plant, by Steve Jurvetson
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