On July 30th, the grand opening ceremony of Tesla’s Gigafactory based outside Sparks, Nevada took place. Although nowhere near full planned capacity, this is a major step for Tesla moving towards their mission of accelerating the world’s transition to sustainable energy. The plant will produce the lithium-ion batteries required to power the planned production rate of 500,000 cars per year by the end of this decade. Tesla alone will require today’s entire worldwide production of lithium-ion batteries, and the company expects to be at full working capacity by 2020, with the first cell production commencing in 2017.
The Gigafactory will produce batteries for significantly less cost using economies of scale, innovative manufacturing, reduction of waste, and simply having the whole process under one roof. The expectation is that the per kilowatt hour (kWh) cost of the battery pack will be reduced by 30%.
This massive $5 billion investment is on a 3000 acre (12.14 SqKm) site and now employs 1,000 workers building seven days a week on two shifts in an effort to have lithium-ion batteries rolling off the manufacturing line earlier than originally planned. The current structure is still less than one sixth the size of the completed construction.
The popularity of lithium-ion batteries has been growing steadily over the last few years, but since the announcement of Tesla’s plan to build the Gigafactory, the price of lithium has skyrocketed in the last year. The price of lithium carbonate surged 30% to around $8,000 a ton, with some spot market trades apparently hitting $25,000. This makes for a welcome change, certainly in traders’ eyes, as the last ten years have not been been on a high. It is expected that market volatility will settle and supply will eventually creep above demand over the next few years.
Tesla Might Have a Big Problem Finding All the Heavy Metals It Needs
