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Tesla Motors' $5 Billion Gigafactory Now Online: World's Biggest Factory Starts Battery Production

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The $5 billion Gigafactory of Tesla Motors is now online, with mass production of lithium-ion battery cells now started.

The move marks a major milestone for the massive factory in Nevada, as Tesla Motors transitions from an electric vehicle manufacturer into a sustainable energy company.

Tesla Motors Initiates Battery Cell Production At Gigafactory

The start of mass production for lithium-ion battery cells at the Gigafactory was announced through a blog post on the official website of Tesla Motors.

The high-performance cylindrical 2170 cell, which was designed and engineered by Tesla Motors in partnership with Panasonic, will be used in the energy storage products of Tesla Motors and the upcoming mass-market electric vehicle, the Model 3.

The 2170 cell looks to offer the best possible performance at the lowest cost of production, with an optimal form factor that will allow it to be used in both energy storage products and electric vehicles. The battery cells currently being produced at the Gigafactory will first be utilized for the Powerwall 2 and Powerpack 2 energy storage products of Tesla Motors, with the battery cells to be used for the Model 3 to begin production in the second quarter.

The start of mass production at the Gigafactory also launches the battery manufacturing industry in the United States, which is an industry previously dominated by China, South Korea, and Japan. Tesla Motors and Panasonic will be hiring several thousand local employees over 2017, and upon reaching peak production, the Gigafactory will have a workforce of 6,500 people and indirectly create around 20,000 to 30,000 jobs in the surrounding area.

The Future of Tesla Motors' Gigafactory

According to Tesla Motors, the plan is to have the Gigafactory, described as the biggest factory in the world, producing 35 gigawatt-hours per year of lithium-ion battery cells by 2018. This figure is almost as much as the battery production from the rest of the world combined. The company is also expecting that the Gigafactory will be able to decrease the per-kilowatt-hour cost of its battery packs by over 30 percent by the end of this year.

However, even as the mass production of battery cells has started at the Gigafactory, less than 30 percent of the facility's structure has actually been completed. The Gigafactory is being built in phases so that Tesla Motors, along with partners such as Panasonic, could start manufacturing immediately within finished sections while waiting for the facility to be completed.

How long that will take, however, is not yet clear. A recently taken drone footage on the Gigafactory's construction reveals that the facility is expanding, but a significant portion is still incomplete.

The Gigafactory And The Model 3

If it seems that Tesla Motors is rushing the launch of battery production at the Gigafactory, it might have something to do with the fact that the company has already received about 400,000 pre-orders for the Model 3. Priced at $35,000, the Model 3 will be the cheapest model of Tesla Motors once it is launched, as the company looks to extend the accessibility of electric vehicles to more customers across the world.

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