Tesla's $5B Gigafactory to call Nevada home

ELECTRIC vehicle maker Tesla has announced that Nevada in the United States has been chosen as the home for its $US5 billion ($A5.32 billion) ‘Gigafactory’ battery-making facility which, the company said, will match the rest of the world’s combined lithium-ion cell output, under one roof.

Joined by Nevada’s governor Brian Sandoval, for the announcement in Reno, Tesla chairman and CEO Elon Musk called the decision an important step for the future of the company.

“I would like to recognise the leadership of Governor Sandoval and the Nevada Legislature for partnering with Tesla to bring the Gigafactory to the state,” Mr Musk said.

“The Gigafactory is an important step in advancing the cause of sustainable transportation and will enable the mass production of compelling electric vehicles for decades to come. Together with Panasonic and other partners, we look forward to realizing the full potential of this project.”

Mr Sandoval welcomed Tesla’s choice, saying it was “great news for Nevada”.

“Tesla will build the world’s largest and most advanced battery factory in Nevada which means nearly one hundred billion dollars in economic impact to the Silver State over the next twenty years.

“I am grateful that Elon Musk and Tesla saw the promise in Nevada. These 21st century pioneers, fueled with innovation and desire, are emboldened by the promise of Nevada to change the world. Nevada is ready to lead.”

A US location was necessary to allow for easy transportation of the completed battery packs to the company’s assembly facility in Freemont, California, with other potential sites for the factory said to have included California, Arizona and Texas.

Construction on the Gigafactory is due to start before the end of this year with production kicking off in 2017.

According to Tesla just the building itself requires 930 million square metres in floor area over two levels and will be powered by a variety of renewable energy supplies, including solar panels and its own wind farm.

Tesla said that when the plant is operating at full capacity in 2020 it will employ 6500 workers and produce battery packs for 500,000 cars each year, equal to the output of the world's current lithium-ion cell producers combined.

Tesla said the cost of the battery pack will be reduced by 30 per cent if it produces them itself, while improving quality, performance and supply. This has been a driving factor in the decision to build the plant.

The Gigafactory is expected to cost about $A5.32 billion with Tesla directly investing about $A2 billion. Other parties including the Nevada state government and battery partner Panasonic will provide the balance of the funds required.

Tesla currently has one car on the market – the four-door mid-sized Model S, but next year it will add the Model X crossover, while the recently announced BMW 3 Series rivaling Model 3 will follow.