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Tesla to decide on battery 'gigafactory' by year's end

A Tesla Model S automobile, manufactured by Tesla

A Tesla Model S automobile, manufactured by Tesla Motors Inc., stands connected to an electrical charger at the Auto Mobil International (AMI) automotive trade fair, at Leipziger Messe in Leipzig, Germany, on Friday, May 30, 2014. Credit: Bloomberg News / Krisztian Bocsi

MOUNTAIN VIEW, CALIF. - Tesla Motors Inc., the electric-car maker led by Elon Musk, won’t decide until year-end where to build a battery “gigafactory” even as it readies multiple plant sites, the billionaire clarified for investors.

The company first proposed the sprawling battery plant in February to supply lower-cost lithium-ion cells for its cars and packs for home-power storage devices. Tesla will soon start preparation in as many as three states “all the way to creating a foundation,” completing plans and gaining local approval, Musk, 42, said Tuesday at Tesla’s annual shareholder meeting in Mountain View, California.

“It might actually be three states that we do it in,” he said. “I would expect that we do a down-select for gigafactory 1 before the end of the year.”

Tesla plans to boost deliveries of its Model S sedan that’s priced from about $71,000 by more than 56 percent this year as sales to China and other international markets expand. Musk has said the Palo Alto, California-based company’s goal of selling lower-priced electric cars within the next three years depends on opening its gigafactory by 2017.

Plans for the plant are “quite advanced” and discussions with Panasonic Corp., Tesla’s main supplier of battery cells, about its involvement in the project take place daily, Musk said. The proposed plant would eventually cost as much as $5 billion to build and employ as many as 6,500 people, Tesla has said.


The company is studying sites in Arizona, New Mexico, Nevada and Texas. Musk last month said California is also a potential candidate for the factory, which he has said should cut lithium-ion cell costs by at least 30 percent.

Separately, Musk said he’ll travel to the U.K. this week to mark the start of customer deliveries there with Tesla’s first right-hand-drive units of the Model S. Shipments to Japan, Hong Kong and other right-hand-drive vehicle markets will follow, he said.

South Africa-born Musk, who also runs rocket maker Space Exploration Technologies Corp., reiterated Tuesday that he wouldn’t consider stepping down as Tesla’s chief executive until after volume sales of its third-generation car begin. That wouldn’t occur for at least four or five years, he said.

Tesla is also readying software upgrades for the Model S to increase owner customization, Musk said. Additionally, the carmaker is advancing plans to add self-driving, or “auto- pilot” features, to its electric cars, he said.

By next year, “I’m confident that you’ll be able to go from highway on-ramp to highway exit without touching any controls,” he said.

Tesla, which saw its stock climb fourfold last year, rose 0.1 percent to $204.94 at the close in New York. The shares have gained 36 percent this year.

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