9/5/2014

Tesla to Build Gigafactory in Nevada

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Tesla Motors Inc. has chosen Nevada for its $5 billion factory to make batteries for electric vehicles.

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Tesla Motors Inc. has chosen Nevada for its $5 billion factory to make batteries for electric vehicles.

The company said earlier it had begun Nevada site prep work in June even as it pursued possible deals in other states. The so-called gigafactory is expected to begin production in 2017.

Panasonic Corp. reportedly will contribute roughly $250 million in the project initially but could raise its investment to $1 billion.

CEO Elon Musk has predicted the high-volume factory eventually will be able to cut the cost of lithium-ion batteries 30%.

The plant is expected to reach a target capacity by 2020 to make enough cells to power about 500,000 EVs per year. Initial production is likely to be at a far lower level. The battery in one of Tesla's Model S EVs contains more than 7,000 cells.

The company intends to use much of the factory's output for its own vehicles, including next year's Model X crossover and the $35,000 Model III sedan due in 2017. Tesla has said the 10 million sq-ft facility could eventually supply other electric vehicle manufacturers too.