Tesla Races to Finish Gigafactory

Tesla Motors Inc. is scrambling to finish building its massive $5 billion battery factory here years ahead of schedule to meet demand for its coming cheaper sedan and provide power for new types of vehicles Chief Executive Elon Musk says are under development.

Tesla has doubled the amount of people constructing the “gigafactory,” which sits on more than 3,000 acres near Reno. Now, 1,000 workers build seven days a week on two shifts in an effort to start churning out lithium-ion cells by early 2017.

The goal is to have the factory operational before the launch next year of the $35,000 Model 3 sedan. A strong demand led Mr. Musk to pull a 500,000 sales target ahead two years to 2018. He also raised $1.7 billion through a stock offering in hopes of speeding up battery production expected to lower the cost of the batteries for electric vehicles.

As of now, the gigafactory’s structure is less than one-sixth the size of what the final building is expected to occupy. Already finished is a four-story rectangular portion of the facility, housing 1.9 million square feet of floor space.

Tesla already is building battery packs for its battery storage business there, but is importing the battery cells from Panasonic Corp. facilities in Japan.

Panasonic has committed up to $1.6 billion to the factory. Joe Taylor, chief executive of Panasonic North America, said the company is struggling to find qualified workers with manufacturing abilities.

Mr. Musk in recent weeks has laid out aggressive expansion plans for Tesla, including heavier vehicles and an energy-storage business that marries Tesla’s battery business with SolarCity Corp.’s solar panels. Mr. Musk, chairman and largest shareholder of both companies, has proposed a $2.8 billion merger of Tesla and SolarCity.

The roof of the new factory will be covered in SolarCity’s panels. A solar-panel field will be constructed nearby to provide additional power to the factory.

Once completed, Mr. Musk anticipates the new plant could be capable of producing a total of 105 gigawatt hours of battery cells by 2020, or enough to power 1.2 million Model S sedans—though up to one-third of those batteries are slated for stationary battery storage.

Tesla’s gigafactory will be the first ever to make a new format of battery—a 21/70, rather than the 18/650 that the auto maker uses today for the Model S and Model X. The latter cylinder-shaped battery is commonly used in portable electronics and has been used by Tesla since the beginning. The numbers stand for the width and length in millimeters.

Nevada has promised Tesla incentives that could be worth $1.3 billion over 20 years, including the construction of a highway that speeds travel from near Carson City to the industrial park where the factory is located.

Through the first quarter of 2016, the state had given Tesla tax credits worth $9.6 million.

If Tesla is successful at its plant in Nevada, it could outpace all the world’s existing plants’ production by a factor of 10. The factory’s size has led to a string of efforts to mine commodities, like lithium, in North America and to bring more processes to the region.

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