Being able to produce massive batteries is a core part of Tesla's electric car business, and the company has just announced plans to get even better at that. The company just announced plans to build a "Gigafactory," a US-based facility that'll focus on manufacturing lithium ion batteries — and Tesla's plans for this factory are highly ambitious. By 2020 Tesla says it hopes its Gigafactory will produce as many batteries as were produced worldwide in 2013.
To meet that goal, Tesla will be partnering with other battery-manufacturing partners in an effort to improve the economics of scale and reduce costs — the company says after one year of operation, it expects the per kWh cost of its battery pack will drop by 30 percent.
This isn't the first we've heard of Tesla's battery ambitions — the Gigafactory was mentioned last November by CEO Elon Musk on Tesla's earnings call:
This is going to be a very green factory. There's going to be a lot of solar power. It's going to have essentially zero emissions and there are no toxic elements that are going to come out ... and we will build recycling capability right into the factory.
It's definitely a bold move for Tesla, but there are a number of concrete benefits the company could realize. Tesla's trying to anticipate projected upcoming demand for batteries and put itself in a position to be a mass-market electric car maker — and simultaneously help jumpstart a new American manufacturing center. As for when the Gigafactory will be open, Tesla hopes to start construction this year with a proposed opening date of 2017 — and by 2020, the company hopes its factory will produce batteries for a whopping 500,000 vehicles.