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The Tesla Gigafactory 1 is a lithium-ion battery and electric vehicle subassembly factory near Reno, Nevada.[3][4][5] The facility is owned and operated by Tesla, Inc. to supply the battery packs for its electric vehicles and stationary storage systems. It is located at the Tahoe Reno Industrial Center (TRIC) in Storey County, and employs around 3,000 people as of August 2018.[6]

Gigafactory 1
Tesla's Gigafactory on 2017-08-08 by Planet Labs.jpg
Top view, August 2017
Gigafactory 1 is located in Nevada
Gigafactory 1
Location of Gigafactory 1
Gigafactory 1 is located in the United States
Gigafactory 1
Gigafactory 1 (the United States)
BuiltJanuary 2015[1] -2020
OperatedJanuary 2016[2]
LocationStorey County, Nevada, U.S.
Coordinates39°32′17″N 119°26′24″W / 39.538°N 119.440°W / 39.538; -119.440Coordinates: 39°32′17″N 119°26′24″W / 39.538°N 119.440°W / 39.538; -119.440
IndustryEnergy storage
ProductsElectric vehicle, Vehicle parts, Lithium-ion batteries
Owner(s)Tesla Inc.

The factory started limited production of Powerwalls and Powerpacks in the first quarter of 2016[7][2] using battery cells produced elsewhere, and began mass production of cells in January 2017.[8] Nevada Governor Brian Sandoval estimated that Nevada would enjoy $100 billion in economic benefit over two decades from the construction and operation of this factory.[9] The grand opening event was held on July 29, 2016.[10]

Gigafactory 1, in Nevada, is aligned on true north, which was done so that the equipment can be mapped by GPS and solar panels on the roof can be accurately aligned. Also the factory has been designed to become entirely energy self-reliant. Tesla intends to power the structure through a combination of on-site solar, wind and geo-thermal sources.[11] The building will have the largest footprint in the world and second largest volume when completed.[12]

Tesla also has Gigafactory 2 in Buffalo, New York, and has begun construction for Gigafactory 3 in Shanghai, China,[13][14][15][16] with plans underway to build another Gigafactory in Europe.

According to Elon, in order to maintain and preserve the electrical power for one day, for all the humanity population, there is need for 100 factories like Gigafactory . [17]


Initial public mention of the gigafactory concept was made in November 2013,[18][19] although Tesla's internal plans predated that; Tesla had investigated almost 100 sites.

In July 2014, it was announced that Panasonic had reached a basic agreement with Tesla to invest in a factory,[20][21][22] estimated to cost $5 billion.[23][24] The TRIC owners gave the first 1,000 acres to Tesla for free.[25] The northern Nevada site and plans were announced with state officials on September 3, 2014.[5] Panasonic will lead the battery cell production portion of the manufacturing, and Tesla CEO Elon Musk indicated in 2015 that the total Panasonic investment would be US$1.5–2 billion,[26] and that Tesla would not expand beyond original plans.[27] In early 2016 Panasonic president Kazuhiro Tsuga confirmed a planned total investment of about $1.6 billion by the company to equip the factory to full capacity.[28] However, after the number of Model 3 reservations became known in April,[29] Panasonic moved production plans forward[30][31] and announced a bond sale for $3.86 billion, most of it to be invested in Gigafactory.[32][33][34]

Tesla held a grand opening on July 29, 2016 of the operational facility, having only three of the final 21 "blocks" of the gigafactory built out, or approximately 14 percent of the final factory size, which is expected to be completed by 2020.[35] By September 2016 Tesla had spent $608 million on the Gigafactory.[36]

In October 2016, it was announced that Tesla would build motors and drive units at the Gigafactory, in addition to the previously announced batteries and assembled battery packs called Powerpacks.[37]

By November 2018, as the Model 3 production had successfully ramped up to approximately 5000 vehicles a week for several months, the production rate of battery cells in the Gigafactory had reached 3.5 million 2170 cells per day.[38]:1:08


Elon Musk on a March 2015 tour of the construction of Gigafactory 1

Tesla expects that Gigafactory 1 will reduce the production cost for assembling electric vehicle battery packs from overseas suppliers of batteries and Powerwall and Powerpack packs assembly by 30%. Its projected capacity for 2018 is 50 (GWh)/yr of battery packs, and its final capacity upon completion was, as of May 2016, planned to be 150 GWh/yr of battery packs.[39] This would enable Tesla to produce 1,500,000 cars per year.[40][non-primary source needed][24][failed verification]

The factory is designed to optimize quality while minimizing cost of production of battery packs and raw material utilization through vertical integration. Tesla expects to achieve a cost target for production battery packs of under US$100 per kWh of energy storage by 2020, near the "inflection point at which it begins [to cost] less to build an electric powertrain than [an internal combustion engine powertrain] even without subsidies or [considering] the savings of electricity vs. gas."[35]

Tesla claims that Gigafactory will assemble battery packs from batteries purchased overseas for significantly less cost using economies of scale, innovative manufacturing, reduction of waste, and the simple optimization of locating most manufacturing assembly processes under one roof.[41]

Factory locationEdit

Grants and tax abatements for Gigafactory until year 2034[42][43][44]

  $120M: Investment-dependable transferable tax credits, mostly from film tax (9%)
  $75M: $12,500-per-job transferable tax credits (6,000 jobs) (6%)
  $725M: 20-year 100% sales tax abatement (56%)
  $332M: 10-year 100% property tax abatement (26%)
  $27M: 10-year 100% modified business tax abatement (2%)
  $8M: Discounted electricity rates for eight years (1%)

Tesla initially considered several sites, but northern Nevada was not one of them. A manager at Reno–Tahoe International Airport offered some of its 3,000 available acres at Reno Stead Airport, and persuaded TRIC owner to split the bill for a private jet to fly Tesla people to the area. They tried several times, and Tesla eventually came to TRIC and was pleased by the speed of regulatory work.[45][46][47]

State competition and incentivesEdit

At least five states competed to attract Gigafactory by offering tax incentives, cash grants[48][49] and other methods in the hope of future business; California,[50][51] Arizona,[52] Nevada,[53] New Mexico, and Texas,[54] where San Antonio had offered bigger incentives with no sales tax, but did not get the factory. States without sales tax were topping the list of preferred sites.[42][53][55][56][57]

Nevada estimates a tax base of $1.9 billion over 20 years.[44] After sticky negotiations,[57] Tesla chose the Tahoe-Reno Industrial Center (TRIC) as the location of the Gigafactory mainly due to speed[53] and a State of Nevada incentive package. Other location reasons were rail access, direct sale ability,[49][55] and low air humidity.[58]

The incentives include $195 million in transferable tax credits depending on Tesla's investment schedule and job creation, similar to the Volkswagen Chattanooga Assembly Plant deal and others.[42][56][57][59] Tesla's investments earn them about $10 million in tax credits per quarter,[60][61][62] and by July 2016 had sold these for $20 million cash.[63] At the end of 2016, Tesla and Panasonic had 477 employees and 5,591 construction workers, mostly Nevada residents, and invested $1.1b earning $59m in tax credits.[64]

The incentive package also includes 20 years free from sales tax and 10 years free from property tax, depending on Tesla's ability to meet performance expectations (like investing $3.5 billion in Nevada).[42][57] By 2034, this package could have accumulated to a value of $1.25 billion in missed taxes; the 10th largest in the US. The $725M sales tax abatement was particularly important, as 5 other states charge no sales tax at all and 34 states, including Arizona and Texas, don't charge sales tax on manufacturing equipment.[42][56] With a tax base of $1.9 billion and an incentive package of $1.25 billion, the projected end result was calculated as a tax-per-abatement ratio of 1.52.[43][53][65] The nearby data centers from Apple Inc. and Switch also received incentives.[53][66]

Nevada estimates the construction impact at $2.4 billion and the economic impact from the project at $100 billion over two decades ($5 billion/year, of which $353 million are wages).[43][44] Some economists said that number was "deeply flawed," for instance, it counted every Tesla employee as if they would otherwise have been unemployed and made no allowance for increased government spending to serve the influx of thousands of local residents.[9][67][68][69][70][71][72] Tesla agreed to pay $7.5M per year for 5 years ($37.5M) to the school system.[42]


The 6-mile Nevada State Route 439/USA Parkway was built by TRIC, and connects TRIC to Interstate 80. Since 2004, the TRIC owners had planned to extend SR 439 south to U.S. Route 50.[73] In 2014, Nevada Department of Transportation advanced the otherwise dormant south extension.[74][75][76][77] This improves traffic conditions for the many large logistics centres at TRIC and Gigafactory, bypassing Reno on the way to U.S. Route 50.[78][79] Tesla plans to ship batteries by rail[80] to its car factory in Fremont.[49][81]

Water is scarce in Nevada, and some of the water for the Gigafactory is piped from a treatment plant in neighboring Washoe County.[57] A 1.5 million U.S. gallons (5.7 million L) water tank is also used (about two Olympic-size swimming pools).[82][83][84]

TRIC built high-pressure natural gas lines to its sites, but Tesla decided to use electricity and not connect natural gas to Gigafactory.[85] Heat pump technology is used for heating,[86][87] and a $6.8 million energy storage tank is scheduled for the site.[82] In 2014 Navigant estimated 100 MW electricity delivery which could be supplied (on average) by nearby wind turbines and roof solar panels,[88] whereas a former Tesla logistics manager in 2016 estimated 300 MW to produce 35 GWh of battery capacity per year.[89]

Tesla works with a mining company to extract lithium 200 miles (320 km) to the southeast, at Silver Peak in Esmeralda County. They intend to process the underground brine water industrially over hours rather than the traditional way of letting the water evaporate from ponds over a year.[54][90]


Steve Jurvetson on a tour of Tesla Gigafactory 1

Tesla had already started brush clearing[91] and grading[53] during the summer of 2014[92] (prior to official announcement in September; permit date was June 26),[82] with vertical construction reported in January 2015.[1] Tesla and its partners intend to complete the facility by 2018.[93] On March 18, 2016 a group of journalists were allowed to visit the Gigafactory under strict conditions and found that 14% of the final building area had been completed.[94] By April 2016 there were around 600 construction workers.[95] Depending on season and building stage, the number of construction workers has fluctuated between 250 and 1,800.[96] On June 13, 2016, Tesla filed for a $63m expansion into section E on the site. By September 2016, the building had grown to 1.9 million sq ft (0.2 million m2) with further areas under construction.[97] As of January 2017 the building's footprint is 1.9 million sq ft (0.2 million m2) with 4.9 million sq ft (0.5 million m2) of usable area across several floors.[98] A combined permit value of $322m was registered in July 2016,[99] and $1.2b in July 2017.[82] Gigafactory and the other large companies affect the local area by increased needs in transportation (SR 439) and housing;[100] house prices increased by 17% in 2015 from half of the peak in the previous 2008 building bubble. Local businesses were wary of building new homes, which is being done mostly by out-of-state companies.[101]

Design features

HVAC equipment is located "between the floors rather than on walls and ceilings of a floor."[35] All steel is from the US. Tesla is its own contractor on the project, learning how to build other factories should they choose so.[29][83]

Future expansionEdit

Prior to the building of more gigafactories (see below), Tesla may expand and potentially double the size of Gigafactory 1. In June 2015, Tesla announced it exercised its option to buy 1,864 acres (754 hectares) of land adjacent to the original 1,000-acre (400 ha) Gigafactory site. According to Tesla spokeswoman Alexis Georgeson, "The purchase gives us the opportunity for future growth." In Tesla's dealings with the state of Nevada expanding the size was always an option should the company choose to do so, said Steve Hill, director of the Governor's Office of Economic Development. "Tesla had said that the factory will be up to 10 million square feet [1 million square meters] in one or two stories," Hill said. "On the earnings call (in May 2015), Elon said they aren't yet committing to this but that they are considering increasing the size of the gigafactory here by 50 to 100 percent." [102]

Early estimates from 2014 projected that the factory would employ approximately 6,500 people by 2022, requiring at least half of them to be Nevadans.[43]


Tesla owns the land and building, and leases part of the building to Panasonic, which owns some of the cell production equipment.[103] The gigafactory is operated by a management team under executive Jens Peter Clausen, formerly a LEGO executive, who is VP of Gigafactory at Tesla.[104] By April 2016 Gigafactory had 317 Tesla employees and 52 by Panasonic, most of them from Nevada,[95] and 850 by December 2016.[105]


The factory is intended to gradually[106][107] provide cradle-to-cradle handling of batteries, from raw material over components to finished products, and recycling old batteries into new.[24] Cells constitute most of the value creation, whereas packing and electronics are minor parts.[108] Tesla views production as more important than products, and assigns more engineers to developing production equipment than to developing products.[109][110][111]

Cylindrical cell (18650) prior to assembly. Several thousand of them form the Tesla Model S battery.

Cell levelEdit

The basis of the energy storage system of Tesla products are lithium-ion cells in the 18650 form factor. These cylindrical cells have a diameter of 18 mm and are 65 mm in length, a size used for the batteries of laptops. Cylindrical cells are generally less expensive (costing 190–200 dollars per kWh as of 2014) than large format cells whose active layers are stacked or folded (approximately 240–250 dollars per kWh).[112]

The battery cells produced at the Gigafactory are of a new form factor, larger than the 18650 cells used in the Model S and Model X automobiles. While the cells were originally expected to be at least 20 mm in diameter and 70 mm in length,[113][114] revised specifications for the optimized form factor are 21 mm (0.83 in) by 70 mm (2.8 in). Tesla thus refers to it as the '21–70',[35] whereas Samsung refer to the size as '21700'.[115] Panasonic is expected to begin cell production in 2016,[104] and continue for at least 10 years.[103] Only Panasonic cells are to be used in the Model 3.[116] Among the machines spotted at the opening in July 2016 were presses and rollers for cathodes.[117] Gigafactory began mass production of 21700 cells in January 2017.[8][107] Tesla uses Nickel Manganese Cobalt (NMC) lithium cells for stationary storage (Powerwall and Powerpack), and Nickel Cobalt Aluminium Oxide (NCA) for vehicles.[118]

Product levelEdit

In October 2015, Tesla moved the Tesla Powerwall and Powerpack production from its Fremont factory to the Gigafactory. The Tesla Powerwall has been produced in the finished portion since the third quarter of 2015.[94]

Output goalsEdit

As of 2014, the projected capacity of Gigafactory for 2020 was to have been 35 gigawatt-hours per year of cells as well as 50 gigawatt-hours per year (5.7 MW) of battery packs.[20] Production could be equivalent of supplying 500,000 Tesla cars per year.[24][93][119] When finished, the factory is planned to produce more lithium ion batteries in a year than were produced in the entire world in 2013. As of May 2019, Gigafactory 1 has achieved a theoretical capacity of 35 gigawatt-hours per year but utilization levels have resulted in a 24 gigawatt-hour output, according to Panasonic President Kazuhiro Tsuga. Tesla is aiming to increase this utilization significantly in 2019 by optimizing their higher-speed production lines, rather than relying on further investments for new production lines.[120]

Scrap levelEdit

An April 2019 report quoting former and current employees at Panasonic's side of the Gigafactory details how half a million of battery cells are consistently scrapped every day because of production defects related to carelessness, lack of respect for operating procedures and the overall pressure to increase output.[121] Panasonic delivers 3 million battery cells daily to Tesla.

Future GigafactoriesEdit

On April 30, 2015, Elon Musk announced that the factory heretofore known simply as the Gigafactory was now to be known as Gigafactory 1 as Tesla plans to build more such factories in the future. At the same event, Musk also said that he believed that other companies would build their own similar "Gigafactories".[3] After receiving $800M of orders ($179M PowerWall, $625M PowerPack) within 1 week of unveiling, Musk estimated that the Gigafactory 1 is not enough to supply demand.[122]

In May 2017 at a TED Talk, Elon Musk stated his intention to announce three or four new Gigafactory sites. These factories will manufacture both batteries and complete cars to enable "global production" of their products.[123]

In May 2019, Tesla announced that in order to alleviate the pressure from the trade war on its business in China, the company is pushing to rapidly start production at its new Gigafactory 3 in Shanghai and avoid any tariff. Tesla started construction in January and said that it “will take roughly two years” until they start volume production. They have since accelerated the plan and now want to produce 3,000 Model 3 vehicles in Shanghai by end of year.[124]

See alsoEdit


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