JB Straubel, Tesla Inc.’s (NASDAQ:$TSLA), chief technical officer and co-founder, spoke at the Midwest Renewable Energy Association’s Annual Energy Fair over the weekend in Wisconsin. While there, he informed the audience of Tesla’s progress in manufacturing the Model 3 vehicle, which will integrate performance, safety, and range into a premium sedan.
Elon Musk, Tesla’s CEO, disclosed several years ago that the California-based company will have their Gigafactory 1 in Sparks, Nevada manufacture more lithium ion cells than the entire globe’s capacity at the time. Straubel, who was a keynote speaker at the Energy Fair, confirmed Musk’s statement by sharing that “the Model 3 alone, when it’s at half a million vehicles per year, will use the world’s entire lithium ion battery supply.”
Putting the updated scale of the Model 3 into perspective, Straubel’s statement also highlights the competitive edge that Tesla has against it’s rivals. If, for example, another manufacturer were to throw money at electric cars in order to gain market share, there would not be enough batteries to supply these cars. Despite more factories being built, Tesla’s Gigafactory in Nevada is continuing to prove just how much of an advantage it has, especially with every additional Gigafactory the company builds. Musk, for instance, has stated that Tesla plans to build between 10 and 20 additional gigafactories.
Straubel announced that the Gigafactory 1 has now commenced making the cells needed for the Model 3. Hearing this, investors are even more optimistic about the vehicle as this is the first real confirmation investors have had from a Tesla executive that the Model 3 batteries are being manufactured. If all goes as planned, the first shipments of the Model 3 vehicle will be in July of this year.
Additionally, Straubel explained why the affordability of the Model 3 is so significant. “Most of our work has been on reducing the cost and increasing the volume of the cars we build.” said Straubel. “Many people tend to think of Tesla as just a luxury or performance brand — they kind of put us in the category forever — but that isn’t the mission statement, that’s not what we’re actually trying to do.”
Tesla currently has two additional gigafactories being manufactured with the Gigafactory 1. These will act as the heart of the battery production. Straubel and his team have previously disclosed that the Gigafactory 1 will manufacture the newer 2170 cells that will be used in the Model 3. Additionally, these cells are already being used in Tesla’s Powerpack energy products and Powerwall. Contrary to popular belief, Musk announced that Model S and Model X will not be using the new 2170 battery cell, for now at least.
As mentioned, Tesla plans on building between 10 and 20 additional Gigafactory plants worldwide. As of right now, the company plans to disclose the locations of the plants by the end of 2017. These additional gigafactories are important as it will allow Tesla to manufacture enough batteries to equip several million vehicles every year. With a number of new products, such as the Tesla Semi, the Tesla pickup truck, and the highly anticipated Tesla Model Y, the California-based company has a channel of products that will keep their Gigafactory plants busy for a number of years.
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