Elon Musk: 200 gigafactories must be built to lower lithium battery prices


Auto industry game-changer Elon Musk believes the world will need at least 200 gigafactories producing longer-lasting and more affordable lithium-ion batteries just to meet the demand for high-performance electric cars.

Speaking at the World Energy Innovation Forum, the Tesla chief executive said the world needs several of the massive battery factories to satisfy future demands for energy. Musk said the advanced lithium-ion cells would be able to store wind and solar power to be used for powering buildings, aside from cars.

"There are going to need to be a lot of gigafactories, if not from Tesla, then from someone else. There's essentially a quasi-infinite demand for energy storage, if the energy density and the price are good enough," Musk said.

Tesla itself is planning to build the world's largest lithium-ion battery plant for $5 billion somewhere in the U.S. in the company's attempt to push its growth even further as it makes its way into the European and Asian markets.

Musk believes that efficient manufacturing processes and economies of scale will double the production of battery packs and drive down costs by 30%, which Tesla hopes will make its upcoming third-generation model commercially viable. Currently nicknamed Model E, the 200-mile-plus Tesla sedan will hopefully be available by 2017. By 2020, the company aims to sell at least 500,000 new cars, which is more than 10 times its current output and more than the 300,000 vehicles Musk's contract with Tesla tasked him to produce nine years from now.

Steve Levine, a Future Tense fellow at the New America Foundation calls the move a "classic Musk," saying where other automakers are waiting for technology to evolve in their favor, Musk forges ahead with "ingenuity and brute force," convinced he can work his way to better and cheaper battery packs with commodity batteries.

Tesla said it will break ground for its new gigafactory in June and named Texas, Arizona, New Mexico, Nevada and California as the most likely sites. In another classic Musk move, Tesla announced it will break ground in two sites, although the company has not yet revealed the locations. Whichever site is held back by permitting and construction delays will be repurposed.

The move seems overly ambitious, given that Tesla has only sold 20,000 cars in 2013, yet Musk has built up Tesla on seemingly high-reaching projects that have proven to be the world's best electric cars.

In 2008, Tesla proved critics wrong when it produced the Roadster, a powerful sports car with an acceleration time of 0 to 60 mph in 3.7 seconds and 245 miles per charge. Four years later, the company baffled the doubters of the electric car once again when Tesla released its Model S SUV, an electricity-powered luxury car which trumped the California sales of mainstream luxury brands such as Cadillac, Porsche and Chrysler in California in 2013.  

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