Tesla Gigafactory 1 is just one third of its potential size: Reno Gazette Journal

Tesla’s massive battery facility outside Reno, Nevada has grown five-fold in the last two years, from 1.1 million square feet by the end of 2016 to the current 5.4 million square feet, but Tesla’s most substantial moat is still barely scratching its potential surface. 

According to Reno Gazette Journal (part of USA TODAY Network), Tesla Gigafactory “is just 30 percent of its potential size and is already producing more batteries than all other carmakers combined”. But the real number could be less than 30% because Tesla keeps increasing its output projections for Gigafactory. 

One acre is 43,560 square feet. Tesla owns 3,000 acres in Storey County, Nevada

If you are thinking about whether or not Tesla has enough land to expand Gigafactory, let me tell you this: Tesla has so much land in
Storey County that they can build another ten Gigafactories if they want to. 

Gigfactory 1, located in Storey County, Nevada sits on a 3,000-acre lot. The footprint of the current building stands at 5.4 million square feet, the equivalent of 124 acres. 

The original site was only 1000 acres, but in June 2015 Tesla exercised its option to buy 1,864 acres of adjacent land, giving them more than enough land for future expansion. 

Gigafactory Projections: The Original Plan

2020 Tesla Vehicle Volume: ≈500,000/yr

2020 Gigafactory Cell Output: 35 GWh/yr

2020 Gigafactory Pack Output:50 GWh/yr

Space Requirement:Up to 10M square feet with 1 or 2 levels

Total Land Area (acres): 500-1000

Employees: ≈6,500

But the projections took a huge turn when CEO Elon Musk told investors during the company’s Annual Tesla Shareholder Meeting in June 2016 that Tesla will triple the planned battery output at Gigafactory, 105 GWh of cells and 150 GWh of battery packs annually, instead of 35 Gwh of cells and 50 GWh of battery packs. 

What’s Gigafactory’s current output?

“In mid-2018, battery production at Gigafactory 1 reached an annualized rate of roughly 20 GWh“. CFO Deepak Ahuja told analysts during the third quarter 2018 earnings call that Gigfactory output is around 20 GWh and Model S and X may add another 4 or 5 Gwh. 

He said, “For Q3, all electric vehicles made around the world, their total battery capacity was about 20 or 19 gigawatt hours. And what we produced in Q3 was about the same or a little bit higher, so about half of world’s batteries basically“. Then he added, “Just the Giga itself is about 20 and on top of that S and X is – I don’t know, another 4 or 5.”

The Immediate Plan

In the third quarter of 2018, Tesla built 80,142 Model S, 3 and X, an average of 6,164 units per week

Tesla wants to build 7,000 to 10,000 Model 3s in Fremont and if we add another 2,000  Model S and X, then the company is looking at a max production rate of 12,000 units per week. 

Tesla has to double its current production capacity at Gigafactory to reach that level. The more batteries the company builds, the better its cost advantage will be. 

“Certainly incremental improvements to the battery pack range are important, but the thing that is really is reducing the cost per kilowatt hour…the fundamental focus is the cost per unit of energy. So that is what the Gigafactory is about. It’s taking economy of scale as far as we can possibly imagine, to a very extreme level,” Musk said
during Baron investors conference in 2015.

To be continued…………….

Stay tuned for: The Future Plan.