Tesla Inc. announced on Tuesday that it will invest more than $3.6 billion to expand its Nevada Gigafactory complex with two new factories, one for mass production of its long-delayed Semi electric truck and the other for the production of its new 4680 battery cell.
The cell plant would be able to produce enough batteries for two million light-duty vehicles per year, including 4680-cell batteries. The 4680 is essential for Tesla to achieve its goal of halving battery costs and nearly doubling battery production by 2030.
Tesla Struggles To Increase Production
Together, the facilities will employ approximately 3,000 individuals, expanding the electric vehicle manufacturer’s complex east of Reno, where it operates a battery joint venture with Panasonic Corp (6752.T) and manufactures vehicle parts and power backup systems.
Currently, Panasonic supplies cells to the gigafactory, where Tesla assembles them into battery packs.
Actually, the project will expand an existing operation at the Truckee Reno Industrial Center, located approximately 20 miles (32 kilometers) east of Reno-Sparks along Interstate 80. However, this plan brings the company one step closer to its previously announced goal of producing 50,000 Tesla Semi trucks in North America by 2024.
The White House released a statement touting the plans on Tuesday, as Musk concluded his three-hour testimony in a class-action lawsuit in a federal court in San Francisco regarding his operation of Twitter, one of three major corporations he owns, including Tesla and SpaceX.
Tesla has struggled to increase 4680 productions at its factories in Fremont, California, and Austin, Texas.
Nevada Investment
According to experts, the dry-coating technique used to produce the larger cells in these batteries is novel and unproven, and the company has had trouble scaling up production to achieve significant cost savings.
The move suggests that Tesla is finally committing to large-scale production of the Semi, which was originally scheduled to begin in 2019. Tesla made its first Semi deliveries to PepsiCo (PEP.O) in December, but there is no indication of a high output rate for the model.
Mitch Landrieu, the infrastructure chief for President Joe Biden, stated on Tuesday that Tesla’s additional investment in Nevada is evidence of a continuing manufacturing boom since Biden’s inauguration two years ago. He stated that the expansion would promote clean energy and strengthen US security while creating 3,000 jobs in Nevada.
Lombardo tweeted a photo of himself with Musk at Tesla’s “Gigafactory” in the industrial park east of Reno-Sparks, where the company manufactures batteries for electric vehicles, on Tuesday night.
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