Skip to Content

Tesla Bets “Gigafactory” Will Enable Affordable Electric Cars

A factory that takes in raw materials and produces finished battery packs could lower costs for the most expensive part of an EV.
February 19, 2014

Tesla Motors released its 2013 shareholder letter this afternoon, declaring record vehicle sales in the fourth quarter and annual revenue of over $2 billion. Looking forward, Tesla says its growing network of superchargers and service centers will help spur more sales this year in the United States. It also expects big sales in Europe and China. It thinks sales will hit 35,000, about 55 percent higher than this year (with sales of 22,477 cars).

Even at 35,000 cars, Tesla sales are a drop in the bucket of world auto sales. We’re following the company because of its goal of bringing down costs and making electric vehicles mainstream. In the letter, CEO Elon Musk says the company will soon release details about its proposed “Gigafactory,” which he says is key to the company’s goal of producing an electric vehicle that will cost about $35,000 (the cheapest Model S sells for $72,000, and you can pay well over $100,000 for some packages).

Batteries are the most expensive part of an electric vehicle (see “Driving Innovation”). Ordinarily, batteries components are made in separate factories–one makes electrode powders out of raw materials, another assembles cells, and yet another packages the cells into complete battery packs. The new factory will consolidate those pieces.

“[The Gigafactory] will allow us to achieve a major reduction in the cost of our battery packs and accelerate the pace of battery innovation. Working in partnership with our suppliers, we plan to integrate precursor material, cell, module and pack production into one facility. With this facility, we feel highly confident of being able to create a compelling and affordable electric car in approximately three years.”

Keep Reading

Most Popular

Muhammad bin Salman funds anti-aging research
Muhammad bin Salman funds anti-aging research

Saudi Arabia plans to spend $1 billion a year discovering treatments to slow aging

The oil kingdom fears that its population is aging at an accelerated rate and hopes to test drugs to reverse the problem. First up might be the diabetes drug metformin.

Yann LeCun
Yann LeCun

Yann LeCun has a bold new vision for the future of AI

One of the godfathers of deep learning pulls together old ideas to sketch out a fresh path for AI, but raises as many questions as he answers.

images created by Google Imagen
images created by Google Imagen

The dark secret behind those cute AI-generated animal images

Google Brain has revealed its own image-making AI, called Imagen. But don't expect to see anything that isn't wholesome.

Europe's AI Act concept
Europe's AI Act concept

A quick guide to the most important AI law you’ve never heard of

The European Union is planning new legislation aimed at curbing the worst harms associated with artificial intelligence.

Stay connected

Illustration by Rose WongIllustration by Rose Wong

Get the latest updates from
MIT Technology Review

Discover special offers, top stories, upcoming events, and more.

Thank you for submitting your email!

Explore more newsletters

It looks like something went wrong.

We’re having trouble saving your preferences. Try refreshing this page and updating them one more time. If you continue to get this message, reach out to us at customer-service@technologyreview.com with a list of newsletters you’d like to receive.