Tesla Motors to Build Gigafactory at Electric Avenue, MxCarran, Nevada
Tesla Motors to Build Gigafactory at Electric Avenue, MxCarran, Nevada

Leading up to the planned, and affordable, Tesla Model 3, Tesla Motors really needs to get lithium-ion battery prices down, which is the whole purpose of the so-called “Tesla Gigafactory.”

Currently, for Tesla Motors’ electric vehicles, the Tesla Model S and upcoming Tesla Model X, individual lithium-ion cells are sourced from Panasonic. True, the cells are commodity cells, cheaper en masse, but wasteful in terms of transport emissions and import taxes. Thus, the 85 kWh lithium-ion battery pack in the Tesla Model S costs somewhere around $12,000. The Tesla Model III is expected to be about 20% smaller than the Tesla Model S, have a 200-mile range, and cost about $35,000, or half the price of a Model S.

As current lithium-ion battery packs, at least from Tesla Motors, are worth about $140/kWh, the only way to get Tesla Model 3 pricing down is to reduce that price. The so-called Tesla Gigafactory, by way of locally-sourced raw materials and tariff-free in-country mass-production, is expected to drive lithium-ion battery prices down far enough to make a profitable Tesla Model 3 possible, perhaps even lower than $100/kWh. Up until now, the location of the ≈$5 billion factory was up for grabs, multiple states competing for the high-tech wünderfactory to be built within their borders, but it seems as if a deal has been struck.

According to a recent report, Tesla Motors has worked out a tax deal with the State of Nevada, one that will secure Tesla Motors in the State for at least the next twenty years. All told, Tesla Motors will built its state-of-the-art lithium-ion battery factory about twenty miles outside of Reno, Nevada, saving about $1.3 billion in taxes. Nevada, whose economy has been struggling, stands to create nearly 25,000 new jobs, about 3,300 at the factory itself, plus another 3,000 in construction, as well as another 16,000 or so in indirect fields. The new address? Electric Avenue, McCarran, Nevada

Image © Tesla Motors

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