Published: Thu, January 05, 2017
Research | By Elizabeth Houston

Tesla starts battery cell production at gigafactory

Tesla starts battery cell production at gigafactory

Electrical vehicle manufacturer Tesla on Wednesday began producing lithium-ion battery cells at its gigafactory east of Reno for use in its new Model 3 and for its storage products. The carmaker, along with its main battery production partner Panasonic, are building custom-developed "2170" battery cells (named after the dimensions of each battery) that will be installed in battery packs for all Tesla's products, including the Model S, Model X, and upcoming Model 3.

The lithium-ion battery cells that are entering production today will first be used in Tesla's Powerwall 2 and Powerpack 2.

When Tesla's new "2170" battery cell will be added to its vehicles, which is expected to be in the second quarter for the Model 3, Tesla's vehicles will become 95% made in the USA and potentially become the "most American cars" in production according to the definition provided above.

It is expected to employ more than 6,500 workers and create between 20,000 and 30,000 additional jobs in the surrounding regions, according to the company. Production of the 2170 for qualification, which is to say for testing and quality assurance purposes ahead of mass production, started in December.

At full capacity, the Gigafactory will have to feed not only the demand for Model 3s, but also Tesla's Powerwall storage solutions. While many critics were quick to scoff at the goal, Tesla has spared no expense with respect to construction efforts as part of its broader effort to roll out cars much more quickly.

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Dubbed the 2170 Cell, the USA -made battery is critical to Tesla's mission of making electric vehicles affordable. Put in other terms, this scale of production could power New York City for about three years, Tesla has previously said.

Tesla said it took a "phased approach" with the battery factory's production to allow it "to learn and continuously improve our construction and operational techniques as we continue to drive down the cost of energy storage".

Musk, who also runs rocket company SpaceX, has a broad vision for the Tesla brand, which now includes solar panel manufacturer SolarCity.

"And we are still less than 30 percent done". Tesla may need the good graces of Wall Street and investors this year as it spends heavily to expand production to 500,000 vehicles annually by 2018, some 10 times the number of vehicles delivered in 2015.

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