On June 6, at Tesla Inc.’s (NASDAQ:$TSLA) 2017 Annual Shareholder Meeting, Elon Musk, the CEO of the California-based automaker company, opened up about the company’s plans to finalize three new locations for future gigafactories. Though Tesla’s first Gigafactory in Nevada is not yet operational, Musk believes that it’s possible for Tesla to build roughly 10 to 20 gigafactories around the globe, in the long run.
Right now, Tesla has plans to build the Model 3, Model S and Model X at the company’s main factory in Fremont, California. However, the CEO mentioned at the meeting that Tesla will need to either find or build a new gigafactory in order to manufacture the Model Y vehicle which is thought to be very similar to the Model 3.
Why does Tesla need to build a new gigafactory for the Model Y vehicle? Well, according to Musk, the factory in Fremont is “bursting at the seams” with all of the work being done there. In fact, Musk reported that the factory is dealing with parking problems as there are hundreds of employees reporting for duty and little parking space to accommodate their vehicles. Tesla is currently working on this problem by expanding the Fremont facility and offering public transit on location. That said, if Model Y sells more or as many units as the Model 3 vehicle, Tesla will be forced to build or find a new facility, just to meet the demand.
The news did not come as a surprise to those who attended the meeting as Tesla had already disclosed plans to manufacture the Model Y on a different platform than the Model 3. Therefore a new factory makes total sense. Plus, Musk is optimistic that the capital expenses required to manufacture the Model Y could be reduced in half through a number of manufacturing improvements. If this were to happen, Tesla could “build the car in a way that a car’s never been built before.”
Released in February, Tesla disclosed in their 2016 earnings report that the company was deciding whether or not to build three new gigafactory locations in addition to Gigafactory 1 in Nevada and the Buffalo solar factory. This means that Tesla could have five separate gigafactories in the works. And on June 6, 2017, Musk confirmed that the company was serious about three factory locations in regards to the additional gigafactories.
Mentioned previously, Tesla’s gigafactory in Nevada is not yet operational nor are the three factory locations finalized, but that doesn’t mean that the company is a sitting duck. Tesla is continuing to look for ways to improve the company’s future and on June 6, Musk pledged that the California-based company will have “at least ten, maybe as many as twenty” gigafactories around the globe.
Musk was interviewed by Leonardo DiCaprio, who is a known environmental activist, and he stated that it would take roughly 100 gigafactories to manufacture enough batteries to move the world to sustainable energy. The company’s earlier announcement accounted for 5% and it now looks like Tesla is planning on meeting 10% to 20% of global sustainable energy demand on their own.
Featured Image: YouTube/National Geographic
