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Tesla to Invest Up to $5 Billion into Gigafactory

Tesla Motors will directly invest approximately $2 billion in its new Gigafactory, while its partners will pump another $2 to $3 billion into the project through 2020, the Palo Alto-based company revealed earlier this week.
Telsa Gigafactory rendering 1 photo
Photo: Tesla Motors
Designed to produce cheaper, mass market lithium-ion batteries and to help Tesla deliver an affordable electric car smaller than the Model S, the large-scale factory will be completed by 2015. The facility will be equipped throughout 2016, while production will be launched in 2017.

To help finance the Gigafactory, Tesla will offer $1.6 billion in senior convertible notes, half of them due 2019 and half due 2021. By 2020, the Gigafactory is expected to roll out about 500,000 vehicles per year and have a cell output of 35 GWh/year, while pack output will be rated at 50 GWh/year. The factory will employ about 6,500 workers.

Tesla Motors has yet to announced where the Gigafactory will be built, but it seems they’re looking at Nevada, Arizona, New Mexico or Texas. A decision will be taken by the end of the year.

“In cooperation with strategic battery manufacturing partners, we’re planning to build a large scale factory that will allow us to achieve economies of scale and minimize costs through innovative manufacturing, reduction of logistics waste, optimization of co-located processes and reduced overhead,” Tesla said in a statement.

“The Gigafactory is designed to reduce cell costs much faster than the status quo and, by 2020, 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 kWh cost of our battery pack by more than 30 percent.”
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About the author: Ciprian Florea
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Ask Ciprian about cars and he'll reveal an obsession with classics and an annoyance with modern design cues. Read his articles and you'll understand why his ideal SUV is the 1969 Chevrolet K5 Blazer.
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