Photographer: David Paul Morris/Bloomberg

Inside the Gigafactory That Will Decide Tesla’s Fate

Elon Musk’s enormous, $5 billion factory is seriously ramping up production.

To get to Tesla’s Gigafactory, you drive east from Reno, Nevada, turn into a sprawling industrial center, and make a left on Electric Avenue. The high desert landscape dwarfs everything, even the vast white building with the red stripe along the top. As you reach the gate with the security guard, the breadth of Tesla’s ambitions becomes clear. Even the name itself suggests more to come: Gigafactory 1.

The lobby décor is classic Tesla: large windows, high ceilings, gleaming white floors, black leather chairs. One of the Powerwall home batteries made at the factory hangs like a piece of modern art. Guests receive hard hats, reflective vests, and safety glasses along with the complimentary bottled water and coffee.

Tesla Gigafactory lobby
The lobby of Tesla’s Gigafactory east of Reno, Nevada, features the chassis of a Model X and S and the model of a Supercharger.
Photographer: David Paul Morris/Bloomberg

The $5 billion Gigafactory was born of necessity. Tesla needs a hell of a lot of batteries, for both the forthcoming mass-market Model 3 sedan and the Tesla Energy product line. The timeline for getting those batteries made just became much shorter, too. On Wednesday, Tesla Chief Executive Elon Musk stunned investors by announcing a sped-up production schedule that calls for a half-million electric vehicles per year by 2018, not the previously stated goal of 2020. For a company that delivered just 50,658 vehicles in 2015, the ramp looks like a hockey stick.

Tesla has worked with Panasonic to collapse the supply chain and drive down costs. Battery production—all the way down to the cell level—will happen in one facility. Conference rooms are named after chemical elements that are key parts of the battery supply chain, including lithium, cobalt, nickel, aluminum, and silicon.

Powerwall batteries for the home and the larger Powerpack for commercial users are already made at the Gigafactory. Eventually battery packs for the Model 3 will be made there as well and then shipped by rail to Tesla’s factory in Fremont, California. About 350 Tesla employees currently work inside the facility.

“We’ve accelerated some of our plans there,” Tesla Chief Technology Officer JB Straubel said of the Gigafactory during Wednesday’s earnings call. “And we’re still on track to have first cell production starting at the end of this year so that we’ll be able to ramp up to match the Model 3 schedule as well.”

The place remains a very active construction site, filled with contractors, cranes, and pickup trucks. The factory is being built in sections and is now only 14 percent complete. Ninety percent of the interior space is under construction.

A lot will change in the coming months. Interior rooms are being prepared to handle raw materials. Tesla Energy products are produced on what’s called the “pod line.” It has the startup vibe: rows of desks, plenty of whiteboards.

The completed structure will have a footprint of 5.8 million square feet, roughly the size of 100 football fields. Inside, however, will be at least twice as much floor space because some sections will stand four stories tall. Tesla has also purchased land around the site for potential expansion. Eventually the entire roof will be filled with fixed-tilt solar panels.

Tesla says that the Gigafactory is designed to reduce battery costs by at least 30 percent, with capacity to produce 35 gigawatt-hours of battery cells and 50 gigawatt-hours of battery packs per year. (“Giga” is a unit of measurement that represents billions: 1 GWh is the equivalent of consuming, or generating, 1 billion watts for one hour.)

But that’s not the upper bound, and Straubel said the Gigafactory will be able to exceed those targets even before it expands. “We won’t need to rob from Tesla Energy plans in order to meet the Model 3 schedule,” he told investors on Wednesday. “We definitely have a way to solve both.”

Tesla Gigafactory
The Gigafactory is a secure facility. Visitors with appointments must check in at the front gate.
Photographer: David Paul Morris/Bloomberg
Tesla Gigafactory
When complete, the Gigafactory will have a footprint of 5.8 million square feet. It is being built in sections, so battery production will begin before the entire building is finished.
Photographer: David Paul Morris/Bloomberg
Tesla Gigafactory
Photographer: David Paul Morris/Bloomberg
Tesla Gigafactory
Building materials at the Gigafactory site. Visible are footings for a new section of the facility.
Photographer: David Paul Morris/Bloomberg
Tesla Gigafactory
The Gigafactory is a work in progress, only 14 percent complete.
Photographer: David Paul Morris/Bloomberg
Tesla Gigafactory
Photographer: David Paul Morris/Bloomberg
Tesla Gigafactory
JB Straubel, Tesla’s chief technology officer, walks on the roof of the company’s Gigafactory on a windy day. The roof will eventually be covered with solar panels.
Photographer: David Paul Morris/Bloomberg
Tesla Gigafactory
Tesla employees and a member of the media walk on the roof of the company’s Gigafactory.
Photographer: David Paul Morris/Bloomberg
Tesla Gigafactory
An architectural model of the site in the Gigafactory’s lobby.
Photographer: Dana Hull/Bloomberg
Tesla Gigafactory
The lobby features a Powerwall, which is being marketed to homeowners. Powerwalls, as well as the larger Powerpacks for businesses and utilities, are made at the Gigafactory.
Photographer: David Paul Morris/Bloomberg
Tesla Model 3
Tesla's Model 3 sedan is scheduled to begin deliveries in late 2017 and start at $35,000.
Source: Tesla Motors