Tesla’s Gigafactory

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Tesla announced earlier this year that it’s embarking on a project to build a massive, lithium-ion battery-producing plant — dubbed the “gigafactory.”

While some information on the factory has trickled out, Visual Capitalist, an online platform for investors, took a deeper look on Tuesday at what will go into Tesla’s battery production.

“The most expensive part of a Tesla is the battery pack,” Visual Capitalist founder Jeff Desjardins wrote in a blog post. “When costs drop below $200 a kWh, battery-powered cars start to become competitive with conventional cars even without subsidies. The gigafactory could bring Tesla close to that.”

The opening of Tesla’s gigafactory is slated to coincide with the unveiling of its upcoming cheaper third-generation electric car, the Model 3, in 2017. Being able to produce its own batteries would help the company efficiently manufacture its cars while also being cost effective. The Model 3 is expected to cost around $35,000, which is far cheaper than the $70,000 Model S.


Tesla’s goal is to produce more lithium-ion batteries in one year at its factory than all 2013 production worldwide. By making its own batteries, the company could lower its costs per kWh by 30 percent, according to Visual Capitalist.

The production of lithium-ion batteries includes the use of natural minerals, such as graphite, cobalt, and lithium. According to Visual Capitalist, 70 percent of the cost of each battery is these minerals. World production of flake graphite was 375,000 tons in 2013 — Tesla’s gigafactory would increase this amount by 126,000 tons.

The majority of the world’s cobalt comes from the Democratic Republic of Congo. However, Tesla said it would not source from that country. It’s unclear where the company plans to get its cobalt. As for lithium, Visual Capitalist predicts Tesla will get it from Chile where it’s plentiful and not difficult to source.

Tesla hasn’t yet settled on a location for its gigafactory — location finalists are Nevada, New Mexico, Arizona, and Texas — but it already has some design elements in the works. The plant will be solar-powered, employ 6,500 people, and be 10 million square feet, which is nearly 174 football fields. Tesla has said it will directly invest nearly $2 billion into the factory.

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