While Tesla missed Q4 2016 car delivery expectations, the company's battery production plans are on schedule as test production at the Gigafactory near Sparks, Nevada started last month. In a joint press release, Tesla and Panasonic announce they're now kicking off mass production of the new 2170 cells that will be used by Tesla's Powerwall 2 and Powerpack 2 energy products. Production of batteries for the highly anticipated Model 3 will start in the second quarter.
Next year the huge factory should be capable of churning out 35GWh worth of batteries, about the same figure as the 2013's total annual li-ion battery production. According to Tesla CEO Elon Musk, the Gigafactory will produce the highest energy density cell in the world and also the cheapest.
Tesla’s mission is to accelerate the world’s transition to sustainable energy through increasingly affordable electric vehicles in addition to renewable energy generation and storage. At the heart of these products are batteries. Today at the Gigafactory, Tesla and Panasonic began mass production of lithium-ion battery cells, which will be used in Tesla’s energy storage products and Model 3.
The high performance cylindrical “2170 cell” was jointly designed and engineered by Tesla and Panasonic to offer the best performance at the lowest production cost in an optimal form factor for both electric vehicles and energy products.
Production of 2170 cells for qualification started in December and today, production begins on cells that will be used in Tesla’s Powerwall 2 and Powerpack 2 energy products. Model 3 cell production will follow in Q2 and by 2018, the Gigafactory will produce 35 GWh/year of lithium-ion battery cells, nearly as much as the rest of the entire world’s battery production combined.
The Gigafactory is being built in phases so that Tesla, Panasonic, and other partners can begin manufacturing immediately inside the finished sections and continue to expand thereafter. Our phased approach also allows us to learn and continuously improve our construction and operational techniques as we continue to drive down the cost of energy storage. Already, the current structure has a footprint of 1.9M square feet, which houses 4.9 million square feet of operational space across several floors. And we are still less than 30 percent done. Once complete, we expect the Gigafactory to be the biggest building in the world.
With the Gigafactory online and ramping up production, our cost of battery cells will significantly decline due to increasing automation and process design to enhance yield, lowered capital investment per Wh of production, the simple optimization of locating most manufacturing processes under one roof, and economies of scale. By bringing down the cost of batteries, we can make our products available to more and more people, allowing us to make the biggest possible impact on transitioning the world to sustainable energy.
Finally, bringing cell production to the U.S. allows us to create thousands of American jobs. In 2017 alone, Tesla and Panasonic will hire several thousand local employees and at peak production, the Gigafactory will directly employ 6,500 people and indirectly create between 20,000 to 30,000 additional jobs in the surrounding regions.
The new 2170 cells measure 21mm by 70mm, making them taller and thicker than the currently used custom 18650 cells.