Tesla’s monster lithium ion battery production facility has been under construction since 2014. What’s crazy to me is that by 2020, the Gigafactory will be producing more lithium ion batteries than the entire world did in 2013.
While it’s still a ways away from full completion, the facility is already manufacturing battery equipment for its current vehicles. The facility is being built in anticipation for the Model 3 – A $35k electric vehicle meant to bring battery powered vehicles to the Average Joe – which was unveiled earlier this year.
The Gigafactory is critical to Tesla’s mission of bringing a reasonable priced battery-powered vehicle to the average person. Go big or go home, right? It’s part of the plan for them. Economies of scale will allow Telsa to put out the batteries with a savings of 30% being passed right down to the cost of the vehicle. Pre-sales for the model 3 by mid-May were already at 373k according to Tesla. The Model 3s won’t even ship until mid-2017. There is quite a bit of excitement and obvious demand for a vehicle like the Model 3.
In cooperation with Tesla, a drone captured the construction site back in April. You can get a real feel for the enormity of the facility. I’m looking forward to seeing a similar video once the factory is completed.
In full disclosure, I should point out we do have Tesla stock in our portfolio. I’m not a big fan of individual stocks. A matter of fact, I tend to stick with mutual/index funds, but that’s a post for another day. But with as exciting as this technology is to me, it was as much a no-brainer to own this stock much like we do Apple. I am excited to see such advances in technology like this; how can you not be when you think about our reliance on fossil fuels?
What really got me interested in Tesla stock was CEO Elon Musks attitude about increasing battery technology for “the greater good” so to speak. Back in June 2014, Tesla announced they would not initiate any patent lawsuits against anyone who wants to use the technology in good faith. It’s almost like he’s giving an open-sourced version to the world and saying, go ahead make it better. It reminds me much of the Linux open source movement.