For those of us who grew up in the “batteries not included” era, it still might seem a little hard to grasp that an automaker’s entire future and near-term viability depend on what looks like a supersize AA battery. But that’s the case for Tesla. As the massive CES technology show bustled with electric-vehicle and mobility-tech announcements in Las Vegas, hundreds of miles away at the Gigafactory, near Reno, Tesla and Panasonic started production on lithium-ion battery cells that are bound for actual products.
For now, the Gigafactory is producing only Tesla’s Powerwall 2 and Powerpack 2 “energy products,” although Tesla says that cell production for the upcoming Model 3 will be starting in the second quarter of 2017.
The 2170-format cells (also called 21700) now being made at the factory are cylindrical, like the roughly AA-size 18650-format cells that Tesla has been using in its Model S and Model X but a bit bigger—21 mm in diameter by 70 mm long. Musk has referred to the cells, which have been co-developed by Panasonic and Tesla, as the most energy dense in the world, as well as the lowest-cost per kWh.
Eventually, cells for all of Tesla’s vehicles will come from the Nevada facility. The planned output from the $5 billion Gigafactory by 2018—35 gigawatt-hours per year—will approximate what all the cell makers in the world were making in 2013, Tesla said. That will be enough to power 500,000 Tesla vehicles. With the more affordably priced Model 3, the automaker plans to pack nearly the same battery capacity as it does for its much more expensive Model S and Model X and their cells supplied from Japan, so it’s also imperative that the companies meet aims to reduce costs by nearly a third.
The project is on schedule—a triumph worth noting, as the company has delayed launches for each of its vehicles. At 1.9 million square feet of building space and 4.9 million square feet of floor space, the building remains less than 30 percent done, yet it already employs about 2900 people. Tesla expects it to be the largest building in the world by the time it’s finished—powered entirely by renewable energy, employing 6500 people directly, and creating up to 30,000 jobs in the surrounding region.
Batteries aren’t the only partnership between Tesla and Sony. Last month, the two companies reached a separate agreement to make photovoltaic cells and modules in Buffalo, New York, for Tesla’s solar-roof products.