Business

Elon Musk reveals new details about Tesla's plans to build Gigafactories around the world

Business Insider US

Tesla CEO Elon Musk said the company's Gigafactory in Sparks, Nevada, is one-third of its planned size.

  • Tesla CEO Elon Musk provided details about the company's plans for its current and future Gigafactories at Tesla's annual shareholder meeting on Tuesday. 
  • Musk discussed Tesla's plans to build Gigafactories in China and Europe.
  • He also said the Nevada Gigafactory is about one-third of its planned size and "will be, by far, the biggest building in the world." 


Tesla CEO Elon Musk provided details about the company's plans for its current and future Gigafactories at Tesla's annual shareholder meeting on Tuesday. 

The company currently has one Gigafactory in Sparks, Nevada, that makes batteries and powertrains for its vehicles. Future Gigafactories will house battery, powertrain, and vehicle production. On Tuesday, Musk discussed Tesla's plans to construct a Gigafactory in China, which will be located in Shanghai. Musk said Tesla will announce details about the Chinese Gigafactory as soon as next month.

Musk also said Tesla will build a European Gigafactory, which may be announced by the end of the year. Tesla plans to ultimately build between 10 and 12 Gigafactories, according to Musk, which is part of the company's plan to reduce production costs for its vehicles.

"Particularly as we try to make cars more and more affordable, it’s getting important to localize production to at least the continent level," Musk said on Tuesday.

Musk also discussed plans for the Nevada Gigafactory, which he said is about one-third of its planned size and "will be, by far, the biggest building in the world." 

Tesla will continue building the Nevada Gigafactory for at least four more years, Musk said.

The company began building the Nevada Gigafactory in 2014 amid concerns that the global supply of batteries would not be sufficient to meet the demand for its Model 3 sedan, which starts at $35,000 (R444,825) and is Tesla's first mass-market vehicle. Since its founding, Tesla has made an effort to decrease its reliance on third-party suppliers and produce an increasing percentage of its vehicles in-house.

Bottlenecks at the Nevada Gigafactory have contributed to production delays that have slowed the Model 3's rollout. In January, CNBC reported that Tesla was making some parts of the batteries by hand that would normally be made by machines, despite concerns about precision and safety. Tesla called the report "extremely misinformed and misleading" and denied that Model 3 batteries were potentially dangerous.

On Monday, Business Insider reported that Tesla expects up to 40% of the raw materials used in its battery and powertrain production process to be reworked or scrapped before being sent to the Fremont, California, factory where it assembles its vehicles. Tesla has spent nearly $150 million (R1.9 billion) on scrap materials this year, according to internal estimates reviewed by Business Insider, a figure the company disputed.

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