Elon Musk is on a mission to revolutionize the automobile industry and make a mark in history. Tesla, the worlds most powerful electric car company, has plans that go way beyond than just manufacturing cars. Gigafactory is a massive battery plant, that has one single goal – power Tesla cars. The factory will take up 1,000 acres of land and will include on-site wind and solar energy plants. Elon Musk has narrowed down 4 states in the US for this – Nevada, New Mexico, Texas, or Arizona. But instead of choosing just one lucky winner, he aims to start factories in all the states. Jakki Mohr who teaches marketing at the University of Montana says having multiple possibilities to site the Gigafactory is a savvy negotiating move.
“States give huge incentives to get this kind of business in their regions, playing one state against another to receive better incentives to locate there.”
says Mohr.
The factory is expected to come to life by 2020. An exhaustive plan by them reveals that facility construction will be done by the year 2015, and production launch will happen by the end of 2017. After that, the factory is estimated to produce about 50 GWh/yr, and it is said to power about 500,000 vehicles every year which includes its Model S sedans, a new SUV, and a more affordable car (at $35,000, it might not be affordable to all of us)! In fact, powering that many vehicles is more than the combined effort of the 2013 global production. That’s changing the world. This will lead to a 30% decrease in the cost of battery packs that power electric cars. The new factory will also provide employment to about 6,500 people.
The amount of work, money, and politics that goes into building such a huge factory, is well huge.
“You can talk about millions and even tens of millions [of dollars] to do this for just one extra site”
says Ben Kallo, senior equity analyst with Robert W. Baird.