Here’s How Tesla Plans to Build More Batteries

tesla giga nevada factory
Here’s How Tesla Plans to Build More BatteriesTesla
  • Tesla plans Gigafactory Nevada expansion, investing over $3.6 billion to produce batteries for its assembly plants.

  • The Tesla Semi will also be built at the same site, after a long development period and deliveries of a number of early examples.

  • The EV maker plans to focus on increasing its current production this year, in addition to starting to build the long-delayed Cybertruck in Austin.

After a record fourth quarter, in which it produced 439,701 vehicles and delivered 405,278, Tesla is seeking to boost its output in a crucial year for the company, with the production launch of the Cybertruck planned for later this year and as Semi assembly finally gets rolling. With two new plants opened in the past 12 months, in Berlin-Brandenburg, Germany, and Austin, Texas, the automaker will need more batteries than ever as it continues to grow.

Tesla has revealed details of a significant expansion of Gigafactory Nevada just outside of Reno that is designed to boost battery output for several of its models, including the long-awaited Semi.

The automaker indicated it will invest over $3.6 billion for two new factories, including a 100-GWh 4680 cell factory, and a new factory for the Semi. Tesla also said the new battery site in Nevada will produce enough batteries for 1.5 million light-duty vehicles annually. The automaker plans to hire some 3000 new workers for the two efforts, both of which will be added to the Gigafactory Nevada site.

"Located less than an hour from Lake Tahoe, Gigafactory Nevada is one of the world's highest volume plants for electric motors, energy storage products, vehicle powertrains, and batteries—producing billions of cells per year," the automaker said.

The 5.4-million-square-foot Gigafactory Nevada has been on line since 2014, and to date has produced 7.3 billion battery cells and 1.5 million battery packs for the company's models, which is the same number that Tesla now wants to produce each year. The factory also produces drive units, with 3.6 million having been built so far at the site.

"In 2014, we made a commitment to invest $3.5 billion in Nevada with our first Gigafactory," the automaker said. "Our goal was to build a facility capable of producing 35 GWh of battery cells annually—enough to manufacture about 500,000 vehicles per year."

2021 tesla model 3
Tesla Model 3.Tesla

When it comes to Semi production the automaker intends to keep it in Nevada, where the small batch of the first trucks that have already been delivered were built. However, the Semis that had been delivered were said to be pre-production models, as Tesla has not yet transitioned to mass production of the Semi.

Cybertruck production, meanwhile, is expected to start in Austin by the end of this year, having been delayed for some time due to various pressures including the availability of the 4680 cells.

While all eyes will be on Cybertruck's advancement to production this year, the automaker is expected to focus on boosting production at its two new plants, amid plenty of new competition in a number of segments, including pickup trucks. Tesla's existing lineup, especially its two older models, have received updates within the last two years, while the Model 3 and Model Y have accounted for the vast majority of its annual output.

Still, industry watchers expect Tesla will need to update its two smaller models in the next couple of years to keep the lineup fresh, even though for the 3 and the Y these could amount to interior and exterior facelifts.

Semi production, recently estimated by Elon Musk to reach an annual output of 50,000 trucks by 2024, is expected see a much more modest start given the timing of the Nevada plant expansion, among other issues. At the moment, several other truck makers, including Volvo and Mercedes-Benz, have the momentum when it comes to battery-electric semis—momentum they're unlikely to lose in the next 24 months.

Will the Cybertruck achieve the needed volume for Tesla, or has Tesla lost the initiative to Detroit automakers when it comes to this segment? Let us know your thoughts.