Tesla to invest $3.6bn in Nevada Gigafactory expansion
Tesla last week (24th January) announced plans for $3.6bn of new investment in its Nevada Gigafactory, creating two new factories in the process. The EV manufacturer stated the new buildings will focus on the production of its ‘first high-volume Semi factory’ and added expansion to its battery cell development.
The Nevada Governor and Tesla CEO Elon Musk discussed plans for the expansion the day before, with the company confirming the news the next day. The announcement came just ahead of Tesla’s fourth-quarter earnings update which saw it surpass anticipated revenue expectations.
Estimated to total a combined four million square feet, the two factories will see the hiring of 3,000 more staff in efforts to ramp up production on its Semi trucks and capacity to produce 100GWh of the 4680-type cylindrical lithium-ion battery cells – enough for two million light-duty vehicles. This would see an almost triple jump from the 37GWh currently produced at the Gigafactory (enough for around 500,000 vehicles), generated from this smaller additional facility.
The investment focus follows the company’s December 2022 announcement where it finally revealed the first production version of the Semi, which it then handed over to Pepsi. Tesla had reportedly started a separate manufacturing line for the Semi in October 2022 in a new building near the main plant, and so the site is poised to become the area where the expansion to a full-blown assembly plant for the Semi begins. With production of the Semis originally planned for 2019, Musk claimed the 18-wheel, 500-mile range Semi had experienced delays due to supply chain challenges and limited availability of battery cells. Musk has stated he aimed to produce 50,000 Semis in 2024.
To meet this pledge and its wider ambitious vehicle production targets of 20 million units a year by 2030, Tesla, which was previously powering its vehicles with batteries purchased from the big cell manufacturers like Panasonic, LG, and Samsung, has begun foraying into internal battery manufacturing business with the manufacturing of the company’s new 4680 cells. The 4680 was introduced as a way to improve the power-to-weight ratio, streamline manufacturing, and lower cost, which would see an increase in production.
But even before this announcement, the Gigafactory is currently one of the biggest battery cell, pack & electric motor factories in America, with the company having already spent $6.2 billion on it. 2022 saw it open two additional Gigafactories: in Germany and Texas, with both plants producing vehicle and 4680 cell manufacturing and with both having expansions already being brought forward. Musk had also said in January that Tesla would likely announce a new Gigafactory location by the end of this year, with speculation being on Nuevo León in Mexico.
The announcement at its Nevada facility is only ‘phase two’ according to Musk, and it’ll go through ‘phase three, four and so on’. Tesla has said it even expects Giga Nevada to be almost entirely solar-powered as time goes on.