By Mark Rechtin, Crain News Service
LOS ANGELES (Nov. 7, 2013) — Tesla Motors Inc. is mulling plans to create a "giga-factory" to manufacture electric vehicle battery packs for the auto maker's consumption, Tesla CEO Elon Musk said.
Mr. Musk said Tesla's long-term ambitions to build 500,000 electric vehicles annually could chew up the vast majority of current lithium ion battery supplies globally—for all industries, including computers and cellphones.
The Tesla plant would be "something comparable to all lithium ion production in the world, in one factory," Musk said.
He declined to give a time frame for the plant, but with the company's smaller Gen III cars slated to arrive in 2017 with a $35,000 price point, Tesla production should ramp up rapidly.
"If we were to produce 500,000 [cars], we need cell capacity commensurate with that. That might be more, or at least on par with, all lithium ion production in the world today. We're in the process of figuring that out. There might need to be some giga-factory built," Mr. Musk said in a conference call with analysts.
He foresees such a plant that would take "raw materials to finished packs, with partners, in North America.
"Raw materials are not an issue. I would not worry about lithium supply. The main constituents, by weight, are nickel, cobalt, aluminum, then lithium," Mr. Musk said, adding that the plant would be "a green factory, a lot of solar power. No toxic elements are going to come out of this plant."
Tesla recently inked a deal with Panasonic to increase cell supply volumes for the auto maker. Panasonic has "got it covered" for Tesla's demand for the next year of battery supply. But that is for projected volumes of 40,000 global units—far below Tesla's long-term aspirations.
This report appeared on the website of Automotive News, a Detroit-based sister publication of Tire Business.