Shocking Growth! Tesla’s Nevada Gamble

Shocking Growth! Tesla’s Nevada Gamble

For decades, the title of “largest building” in the world by volume has belonged to the same owner: Boeing. Their factory in Everett, Washington employs more than 30,000 skilled workers, producing airliners from start to finish on vast assembly lines that buzz around the clock. That Boeing’s manufacturing colossus has remained the world’s largest for so long should come as no surprise; building airplanes is literally big business. But if all goes to plan, Everett will have a challenger in the [incredibly] appropriately named city of Sparks, Nevada-where one of the world’s most notorious billionaires is making a historic bet on the future.

To say that Tesla’s Gigafactory 1 will produce lithium batteries is an understatement. CEO Elon Musk’s plan for the massive plant is to produce three times the current global output of lithium batteries. By bringing battery production in­house, Tesla is looking to leverage economies of scale to reduce cost, spark giant growth in the electric vehicle market, and potentially change how we think about cars.

Until recently, Tesla’s focus has been on producing high-end, luxury sports cars, playing on techie cachet and an early-adopter mindset to move product. While Tesla’s offerings have been critical darlings, they have not yet challenged the core of the car manufacturing market-until now. Tesla’s next step is to go very big and broad, increasing overall production by more than fifteen-fold. At the heart of this strategy is the introduction of Tesla’s Model 3. Priced significantly lower than its predecessors [at $35,000] the car of the future has already been pre-ordered by more than 370,000 people [who have all paid $1,000 for the privilege]-even though the Model 3 won’t start shipping until late 2017. But the Model 3 cannot be feasible unless Tesla can reduce the cost of batteries and increase their availability dramatically-which is where the Gigafactory comes in.

Gigafactory I is still in its first phase-currently representing about 14% of its planned footprint. It stands stark in the middle of the red Nevada desert, on a giant section of leveled earth. Today, the factory is geared toward producing Tesla’s Powerwalls and Powerpacks, massive batteries produced for residential and commercial applications.

However, everything about the Gigafactory is geared for future growth. Its exterior walls are temporary in anticipation of expansion, and Musk has purchased 3,000 acres of land in total so that the Gigafactory can continue to grow in an incremental, modular fashion over the next decade.

When completed [predicted to be in 2020), the 13.6 million-square-foot building will be shaped like a diamond. From above, it will resemble a shiny, clean computer chip, covered entirely with solar panels and oriented toward true North. Unsurprisingly, one of the project’s key goals [and indeed central to all of Musk’s projects] is to be net-zero, using 100% renewable energy to drive production and recycling all industrial waste as effectively as possible.

The Gigafactory will be home to 6,500 employees and a massive fleet of robots, including automated guided vehicle-which roam the factory using digital maps and sensors. Raw materials will be transported into the factory on rail cars, making the transition from mine to finished product virtually seamless. At full force, the Gigafactory will produce enough batteries to support 1.5 million cars each year, both in the form of onboard vehicular batteries and in the form of stationary power storage, which will become more ubiquitous as the electric revolution takes over the country.

At least that’s the plan. Overall, the Gigafactory will cost upwards of $9 billion­ which explains the building’s four earthquake­proof foundations protecting Tesla’s massive investment. With such a large investment, a lot is riding on the next few years of Model 3 sales. If it succeeds, we may see more Gigafactories in the future-and the biggest change in automobiles since Ford rolled out the Model T in 1908.

As atmospheric carbon continues to climb, Musk is focused full-throttle on transitioning our energy sources toward sustainable alternatives, both with Tesla and SolarCity, where he serves as Chairman. While we’ve seen incremental growth in alternative energy sources with the slow adoption of wind and solar power, a massive and sudden paradigm shift hasn’t yet occurred. If it does, it may be ignited in a town called Sparks.

Originally Published in:

THE NETWORK / DECEMBER 2016 – Amazing Buildings