Top view, August 2017
|Built||January 2015 -2020|
|Location||Storey County, Nevada, U.S.|
The Tesla Gigafactory 1 is a lithium-ion battery factory under construction, primarily for Tesla, Inc., at the Tahoe Reno Industrial Center (TRIC) in Storey County (near the community of Clark, Nevada, United States).
The factory started limited production of Powerwalls and Powerpacks in the first quarter of 2016 using battery cells produced elsewhere, and began mass production of cells in January 2017. Nevada Governor Brian Sandoval estimated that Nevada would enjoy $100 billion in economic benefit over two decades from the construction and operation of this factory. The grand opening event was held on July 29, 2016.
Tesla began to refer to the SolarCity Gigafactory at Buffalo, New York, in February 2017, as Gigafactory 2. The Europe Gigafactory will be named either Gigafactory 3, 4, or 5 and the location was to be announced in 2017. Gigafactory 1, in Nevada, is aligned on true north, which was done so that the equipment can be mapped by GPS and solar panels on the roof can be accurately aligned. Also the factory has been designed to be entirely energy self-reliant. Tesla intends to power the structure through a combination of on site solar, wind and geo-thermal sources.
In July 2014, it was announced that Panasonic had reached a basic agreement with Tesla to invest in a factory, estimated to cost $5 billion. The TRIC owners gave the first 1,000 acres to Tesla for free. The Reno site and plans were announced with Nevada officials on September 3, 2014. Panasonic will lead the battery cell production portion of the manufacturing, and Tesla CEO Elon Musk indicated in 2015 that the total Panasonic investment would be US$1.5–2 billion, and that Tesla would not expand beyond original plans. In early 2016 Panasonic president Kazuhiro Tsuga confirmed a planned total investment of about $1.6 billion by the company to equip the factory to full capacity. However, after the number of Model 3 reservations became known in April, Panasonic moved production plans forward and announced a bond sale for $3.86 billion, most of it to be invested in Gigafactory.
Tesla held a grand opening on July 29, 2016 of the operational facility, having only three of the final 21 "blocks" of the gigafactory built out, or approximately 14 percent of the final factory size, which is expected to be completed by 2020. By September 2016 Tesla had spent $608 million on Gigafactory.
In October 2016, it was announced that Tesla would build motors and drive units at the Gigafactory, in addition to the previously announced batteries and assembled battery packs called Powerpacks.
Tesla expects that Gigafactory 1 will reduce the production cost for their electric vehicle battery and Powerwall and Powerpack packs by 30%. Its projected capacity for 2018 is 50 (GW h)/a of battery packs, and its final capacity upon completion was, as of May 2016[update], planned to be 150 GWh/yr of battery packs. This would enable Tesla to produce 1,500,000 cars per year.[non-primary source needed][not in citation given]
The factory is designed to optimize quality while minimizing cost of production and raw material utilization through vertical integration. Tesla expects to achieve a cost target for production battery packs of under US$100 per kWh of energy storage by 2020, near the "inflection point at which it begins [to cost] less to build an electric powertrain than [an internal combustion engine powertrain] even without subsidies or [considering] the savings of electricity vs. gas."
Gigafactory is expected to produce batteries for significantly less cost using economies of scale, innovative manufacturing, reduction of waste, and the simple optimization of locating most manufacturing process under one roof.
Tesla initially considered several sites, but Reno was not one of them. A manager at Reno–Tahoe International Airport offered some of its 3,000 available acres at Reno Stead Airport, and persuaded TRIC owner to split the bill for a private jet to fly Tesla people to Reno. Reno tried several times, and Tesla eventually came to TRIC and was pleased by the speed of regulatory work.
At least five states competed to attract Gigafactory by offering tax incentives, cash grants and other methods in the hope of future business; California, Arizona, Nevada, New Mexico, and Texas, where San Antonio had offered bigger incentives with no sales tax, but did not get the factory. States without sales tax were topping the list of preferred sites.
Nevada estimates a tax base of $1.9 billion over 20 years. After sticky negotiations, Tesla chose the Tahoe-Reno Industrial Center (TRIC) as the location of the Gigafactory mainly due to speed and a State of Nevada incentive package. Other location reasons were rail access, direct sale ability, and low air humidity.
The incentives include $195 million in transferable tax credits depending on Tesla's investment schedule and job creation, similar to the Volkswagen Chattanooga Assembly Plant deal and others. Tesla's investments earn them about $10 million in tax credits per quarter, and by July 2016 had sold these for $20 million cash. At the end of 2016, Tesla and Panasonic had 477 employees and 5,591 construction workers, mostly Nevada residents, and invested $1.1b earning $59m in tax credits.
The incentive package also includes 20 years free from sales tax and 10 years free from property tax, depending on Tesla's ability to meet performance expectations (like investing $3.5 billion in Nevada). By 2034, this package could have accumulated to a value of $1.25 billion in missed taxes; the 10th largest in the US. The $725M sales tax abatement was particularly important, as 5 other states charge no sales tax at all and 34 states, including Arizona and Texas, don't charge sales tax on manufacturing equipment. With a tax base of $1.9 billion and an incentive package of $1.25 billion, the projected end result was calculated as a tax-per-abatement ratio of 1.52. The nearby data centers from Apple Inc. and Switch also received incentives.
Nevada estimates the construction impact at $2.4 billion and the economic impact from the project at $100 billion over two decades ($5 billion/year, of which $353 million are wages). Some economists said that number was "deeply flawed", for instance, it counted every Tesla employee as if they would otherwise have been unemployed and made no allowance for increased government spending to serve the influx of thousands of local residents. Tesla agreed to pay $7.5M per year for 5 years ($37.5M) to the school system.
The 6-mile Nevada State Route 439/USA Parkway was built by TRIC, and connects TRIC to Interstate 80. Since 2004, the TRIC owners had planned to extend SR 439 south to U.S. Route 50. In 2014, Nevada Department of Transportation advanced the otherwise dormant south extension. This improves traffic conditions for the many large logistics centres at TRIC and Gigafactory, bypassing Reno on the way to U.S. Route 50. Tesla plans to ship batteries by rail to its car factory in Fremont.
Water is scarce in Nevada, and some of the water for the Gigafactory is piped from a treatment plant in the neighboring Washoe County. A 1.5 million U.S. gallons (5.7 million L) water tank is also used (about two Olympic-size swimming pools).
TRIC built high-pressure natural gas lines to its sites, but Tesla decided to use electricity and not connect natural gas to Gigafactory. Heat pump technology is used for heating, and a $6.8 million energy storage tank is scheduled for the site. In 2014 Navigant estimated 100 MW electricity delivery which could be supplied (on average) by nearby wind turbines and roof solar panels, whereas a former Tesla logistics manager in 2016 estimated 300 MW to produce 35 GWh of battery capacity per year.
Tesla works with a mining company to extract lithium 200 miles (320 km) to the southeast, at Silver Peak in Esmeralda County. They intend to process the underground brine water industrially over hours rather than the traditional way of letting the water evaporate from ponds over a year.
Tesla had already started brush clearing and grading during the summer of 2014 (prior to official announcement in September; permit date was June 26), with vertical construction reported in January 2015. Tesla and its partners intend to complete the facility by 2018. On March 18, 2016 a group of journalists were allowed to visit the Gigafactory under strict conditions and found that 14% of the final building area had been completed. By April 2016 there were around 600 construction workers. Depending on season and building stage, the number of construction workers has fluctuated between 250 and 1,800. On June 13, 2016, Tesla filed for a $63m expansion into section E on the site. By September 2016, the building had grown to 1.9 million sq ft (0.2 million m2) with further areas under construction. As of January 2017[update] the building's footprint is 1.9 million sq ft (0.2 million m2) with 4.9 million sq ft (0.5 million m2) of usable area across several floors. A combined permit value of $322m was registered in July 2016, and $1.2b in July 2017. Gigafactory and the other large companies affect the local area by increased needs in transportation (SR 439) and housing; house prices increased by 17% in 2015 from half of the peak in the previous 2008 building bubble. Local businesses were wary of building new homes, which is being done mostly by out-of-state companies.
HVAC equipment is located "between the floors rather than on walls and ceilings of a floor." All steel is from the US. Tesla is its own contractor on the project, learning how to build other factories should they choose so.
Prior to the building of more gigafactories (see below), Tesla may expand and potentially double the size of Gigafactory 1. In June 2015, Tesla announced it exercised its option to buy 1,864 acres (754 hectares) of land adjacent to the original 1,000-acre (400 ha) Gigafactory site. According to Tesla spokeswoman Alexis Georgeson, "The purchase gives us the opportunity for future growth." In Tesla's dealings with the state of Nevada expanding the size was always an option should the company choose to do so, said Steve Hill, director of the Governor's Office of Economic Development. "Tesla had said that the factory will be up to 10 million square feet [1 million square meters] in one or two stories," Hill said. "On the earnings call (in May 2015), Elon said they aren't yet committing to this but that they are considering increasing the size of the gigafactory here by 50 to 100 percent." 
Early estimates from 2014 projected that the factory would employ approximately 6,500 people by 2022, requiring at least half of them to be Nevadans.
Tesla owns the land and building, and leases part of the building to Panasonic, which owns some of the cell production equipment. The gigafactory is operated by a management team under executive Jens Peter Clausen, formerly a LEGO executive, who is VP of Gigafactory at Tesla. By April 2016 Gigafactory had 317 Tesla employees and 52 by Panasonic, most of them from Nevada, and 850 by December 2016.
The factory is intended to gradually provide cradle-to-cradle handling of batteries, from raw material over components to finished products, and recycling old batteries into new. Cells constitute most of the value creation, whereas packing and electronics are minor parts. Tesla views production as more important than products, and assigns more engineers to developing production equipment than to developing products.
The basis of the energy storage system of Tesla products are lithium-ion cells in the 18650 form factor. These cylindrical cells have a diameter of 18 mm and are 65 mm in length, a size used for the batteries of laptops. Cylindrical cells are generally less expensive (costing 190–200 dollars per kWh as of 2014) than large format cells whose active layers are stacked or folded (approximately 240–250 dollars per kWh).
The battery cells produced at the Gigafactory are of a new form factor, larger than the 18650 cells used in the Model S and Model X automobiles. While the cells were originally expected to be at least 20 mm in diameter and 70 mm in length, revised specifications for the optimized form factor are 21 mm (0.83 in) by 70 mm (2.8 in). Tesla thus refers to it as the '21-70', whereas Samsung refer to the size as '21700'. Panasonic is expected to begin cell production in 2016, and continue for at least 10 years. Only Panasonic cells are to be used in the Model 3. Among the machines spotted at the opening in July 2016 were presses and rollers for cathodes. Gigafactory began mass production of the 2170 in January 2017. Tesla uses Nickel Manganese Cobalt (NMC) lithium cells for stationary storage (Powerwall and Powerpack), and Nickel Cobalt Aluminum Oxide (NCA) for vehicles.
In October 2015, Tesla moved the Tesla Powerwall and Powerpack production from its Fremont factory to the Gigafactory. The Tesla Powerwall has been produced in the finished portion since the third quarter of 2015.
As of 2014[update], the projected capacity of Gigafactory for 2020 was to have been 35 gigawatt-hours per year of cells as well as 50 gigawatt-hours per year (5.7 MW) of battery packs. Production could be equivalent of supplying 500,000 Tesla cars per year. When finished, the factory is planned to produce more lithium ion batteries in a year than were produced in the entire world in 2013.
On April 30, 2015, Elon Musk announced that the factory heretofore known simply as the Gigafactory was now to be known as Gigafactory 1 as Tesla plans to build more such factories in the future. At the same event, Musk also said that he believed that other companies would build their own similar "Gigafactories". After receiving $800M of orders ($179M PowerWall, $625M PowerPack) within 1 week of unveiling, Musk estimated that the Gigafactory 1 is not enough to supply demand.
In May 2017 at a TED Talk, Elon Musk stated his intention to announce three or four new Gigafactory sites. These factories will manufacture both batteries and complete cars to enable "global production" of their products.
Free of charge, they dished Tesla nearly 1,000 acres to build its factory at TRIC
We have incurred $608.4 million of costs for our Gigafactory as of September 30, 2016.
the company must invest a minimum of $3.5 billion in manufacturing equipment and real property in the state. Five other states charge no sales tax at all and 34 states, including Arizona and Texas, don't charges sales tax on manufacturing equipment.
Originally, they hadn't considered Northern Nevada at all. But Tina Iftiger, vice president of airport economic development at Reno-Tahoe International Airport, helped convince Tesla executives to visit the region over and over again until they put it on the list.
A variety of factors will enter into Tesla's decision. First, you have your obvious ones for any such project like land availability, taxes, and tax incentives
It's a real get things done state. That was a really important part of the decision .. Tesla does not want to deal with stalled development
We didn't have the biggest incentive package, we know that," said Mike Kazmierski, president of the Economic Development Authority of Western Nevada. Since the Great Recession, states have shelled out billions of dollars in incentives. Tennessee, with the 11th highest poverty rate in the nation, helped Volkswagen amass $566 million in tax breaks in 2008 to build a $1 billion plant in Chattanooga. Nearly $400 million in additional state and local incentives have gone toward expanding the plant since then, according to the Institute for Southern Studies. In 2012, Pennsylvania agreed to $1.6 billion in tax credits for Royal Dutch Shell PLC to build an ethane cracker north of Pittsburgh. Shell hasn't said whether it plans to build the plant. The Legislature in Washington state agreed to a record $8.7 billion package for Boeing in 2013. Tesla was "really concerned about scheduling risk.
Nevada was fourth in line for the plant with its RFI, about $650 million short on the abatements and $900 million short overall. Hill said he believed that Texas and New Mexico were the main competition. But O’Connell said it was never that simple, that the process was multilayered and not linear. “It’s a dynamic process, it’s an iterative process and it’s taking place at at least two levels,” he explained. “At one level, we had teams literally looking at dirt…the viability of a physical location. At another level, the conversation was between ourselves and the economic development folks about what kinds of financial programs can be used.” ..if Nevada was going to win out over other states with larger incentive packages: “We’ve got to close this gap somehow. It just has to happen or we’re not going to be able to do this” said Steve Hill from the Nevada authorities
Battery production requires very low humidity
331 employees at the factory with 89% of them Nevada residents.
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Battery production is both energy and power consuming and a Gigafactory about 35 GWh estimated to have a connection of 300 MW
workers and robotic arms still processed some of the battery storage products that went on sale in October
it’s being built as a series of mini facilities, each one iterating on the design of the last. Although the first phase of the Gigafactory is not yet complete, construction is already underway on t the next (the factory’s exterior walls are removable). The first phase is more than double the capacity of a similar sized factory in Asia, said Yoshihiko Yamada, executive vice president of Panasonic, who was on-site working with Tesla’s engineers. Tesla plans to repeat this process numerous times.
The Gigafactory is being built in phases so that Tesla, Panasonic, and other partners can begin manufacturing immediately inside the finished sections and continue to expand thereafter. Our phased approach also allows us to learn and continuously improve our construction and operational techniques.. ..bringing cell production to the U.S.
As the machine that builds the machine, our factories are so important that we believe they will ultimately deserve an order of magnitude more attention in engineering than what they produce.
The factory itself is a product. It's the machine that builds the machines and demands more problem solving than the product it makes
It takes a hundred to a thousand times more resources, and far more difficulty, to build the machine that builds the machine, compared to creating an individual product, said Musk.
|Wikimedia Commons has media related to Tesla Gigafactory 1.|
|Development of Gigafactory|
|Inside the Tesla Gigafactory (gallery), March 18, 2016|
|Factory size comparison|
|Aerial view, July, 2017|
|The 2170 cell|
|Timelapse of construction|
|Tesla Gigafactory, March 18, 2016|
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