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Electric car-maker Tesla has revealed ambitious plans to build what it has called a “Gigafactory” in the US, that by 2020 will produce enough lithium-ion batteries to power 500,000 Tesla cars a year.
The factory will cover 10 million sq ft over two floors and employ 6,500 people when production starts in 2017. The batteries it produces will supply the Tesla car production line in Fremont, California, other automotive OEMs and eventually other markets, such as consumer electronics.
Tesla hopes that its single Gigafactory will produce more lithium-ion batteries a year by 2020 than were produced in the entire world last year. After the factory has operated for one year it expects the effect on the battery market to be a reduction of the cost of lithium-ion batteries by almost a third.
The company said: “We’re planning to build a large-scale factory that will allow us to achieve economies of scale and minimize costs through innovative manufacturing, reduction of logistics waste, optimization of co-located processes and reduced overhead.”
The plant will be partly powered by renewable energy sources and also include recycling facilities.
Elon Musk, chief executive of Tesla Motors, said: “Current lithium-ion production isn’t particularly bad environmentally. But we can take it a step further with the Gigafactory. It will be heavily powered by wind and solar and have built into it a recycling plant for battery packs, so we account for the whole lifecycle of battery packs.”
The company has taken steps to raise an initial $1.6bn to pay for the factory, which it anticipates will cost up to $5bn to build. The rest of the funding will come from Tesla, with up to $3bn coming from partners in the lithium-ion battery market already. Reports from Reuters indicate that Panasonic is planning to invest up to $1bn in the plant.
Tesla is considering building the Gigafactory in Arizona, Nevada, New Mexico and Texas.
Tesla was launched 10 years ago and in that time has produced two electric vehicles - the “Tesla Roadster” sports car, and the “Model S” luxury sedan. Production of the Roadster stopped in 2011 and by 2012 the company had sold more than 2,250 of the vehicles. Some 6,090 Model S cars were sold last year, 20% more than the company predicted.
Both cars are powered by the same type of lithium-ion battery packs that are used in consumer electronic devices such as laptops. The Model S has aluminium and steel body and a weight of 2100 kg and uses an AC induction motor with regenerative braking. When equipped with the higher end 85 kilowatt-hour battery and drive inverter it has a top speed of 124 miles per hour, can reach 60 miles per hour in 4.2 seconds and has a range of 312 miles.
Last month, the company recalled 29,000 charging adaptors for the Model S that it said could could overheat and become a fire hazard.