Tesla Gigafactory is open for business

January 5, 2017

The contrasts between Tesla Motors and its would-be rival, Faraday Future, are pretty stark right now. Earlier this week, Faraday unveiled its second curious, high-tech prototype, but it has yet to produce anything that consumers can drive. Worse, due to financial troubles, construction of the company's planned $1 billion auto plant outside Las Vegas ground to a halt just two months after it began.

Meanwhile, the older, slightly wiser Tesla has three all-electric models on the road, another hugely popular one in the wings, and yesterday the company opened the doors to its long-awaited Gigafactory outside Reno.

To be fair, the facility is far from complete. Less than one-third of the plant is currently in operation, with the remainder still under construction. 

Then again, considering that the Gigafactory site was only announced in September 2014, the fact that a sizable portion of the $5 billion, 4.9 million square-foot facility is already producing batteries seems pretty impressive. The opening bodes well for Tesla's upcoming Model 3, which will require batteries manufactured at the plant.

The Gigafactory's debut comes at an interesting time in history, as two major shifts are occurring:

1. The world's auto industry is moving away from vehicles that run on fossil fuels, shifting instead toward electric vehicles--mostly those that run on batteries like those produced at the Gigafactory.

2. The United States has a president-elect who has vowed to grow the country's manufacturing sector, and the Gigafactory is a rare example of an American battery plant.

In other words, Tesla is poised to reap huge benefits from the Gigafactory, provided that battery production goes as planned and that construction stays on schedule.

Most importantly, manufacturing batteries on a massive scale--both for Tesla vehicles and possibly those from other automakers--could cause the price of electric cars to plummet, making them more attractive to consumers and thus driving future demand. 

But the Gigafactory isn't just a boon to electric cars. Tesla also stands to make huge gains in the field of solar energy and backup power, because the Gigafactory's batteries will be used in Tesla's Powerwall devices, which will be deployed in conjunction with solar energy systems from SolarCity

The fact that Tesla is bringing battery manufacturing back to the U.S.--along with some 6,500 jobs--won't hurt its standing with consumers or the president-elect, either. Roughly 2,900 workers are already employed at the plant, with the remainder hired between now and 2020, when the Gigafactory is to be fully complete.

For more about the Gigafactory and its significance to Tesla and electric cars in general, check out this piece at Green Car Reports

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