One-upmanship is commonplace in the new age of energy innovation, as manufacturers continually try to outdo their competitors with the next big thing. Electric vehicles (EVs) are no exception.
In February, Tesla—the Palo Alto, Calif., company that manufactures the car of the same name—announced plans to build the world’s first Gigafactory.
The facility is expected to transform the process of making batteries. Tesla projects it will lower the per-kilowatt cost of building a lithium-ion battery pack by more than 30 percent. Speed will be another byproduct. Tesla boldly expects to produce more batteries at the new facility by the year 2020 than were manufactured worldwide last year.
The facility will save costs and time through economies of scale, innovative manufacturing, reduced logistic waste and overhead, and co-located processes.
The long charging times and short driving range of most EVs has diminished their mass appeal. The Tesla S and X models crack that nut with faster charging times and longer range between chargers. However, these vehicles are still way out of the reach of the average car buyer at a retail price that is only slightly below six figures.
Tesla hopes to solve that problem by dramatically lowering the cost to manufacture the car’s battery. It expects the Gigafactory to help the company reach its goal of producing a mass-market EV in about three years. By 2020, the output is projected to reach 500,000 vehicles.
Site selection for the Gigafactory is currently underway, with the finalists narrowed down to sites in Nevada, New Mexico, Arizona and Texas. Production is scheduled to begin 2017.
If Tesla can achieve a significant price reduction of such a key contributor to the cost of EVs, we could see more EVs on the road sooner than expected, and the electrical distribution industry will need to adapt quickly to the new load.