Reno Tesla Gigafactory Expansion and Progress

Posted by Brooke Sullivan on Monday, February 27th, 2017 at 4:30pm

The Tesla Gigafactory plant outside of Reno is ramping up.

Tesla has hired more than 1,000 workers at its Reno location, according to the head of the Nevada Governor’s Office of Economic Development, and is on track to increase hiring goals each month. This workforce expansion expects the factory to have 3,200 workers by March 2018. Executive Director Steve Hill told the Senate Finance Committee last week during a budget review meeting that the California-based electric carmaker and energy company should be hiring 150 to 200 workers every month.

Grant Thornton for the Nevada Governor’s Office of Economic Development conducted an independent audit that confirmed that Tesla was meeting all applicable targets. The state established the targets when it agreed to a $1.3 billion tax incentive package. Tesla’s rapid growth was reaffirmed by Nevada Governor Brian Sandoval during his State of the State address. He states that Tesla will be investing an additional $350 million into the Sparks, Nevada-based factory to expand production to include Model 3 motors and drivetrain assemblies.

The upcoming electric-powered Model 3 is now scheduled to go into production in July. This aggressive timetable came as Tesla announced its fourth-quarter earnings, along with plans to invest upwards of $2 billion into upgrading its factory to cope with company forecasts for much higher production and sales volumes.

Moving into mainstream retail is a big shift for the Silicon Valley-based automaker. Until now, the company has relied on sales of two high-end models, the Model S luxury sedan and the Model X crossover. These cars are pricey, easily topping the $100,000 range, targeted for a small and affluent segment of the car-buying public.

Image courtesy of Tesla

The Model 3 will start at just $35,000, competing with standard electric cars such as the Nissan Leaf, BMW i3, Volkswagen e-Golf and Chevy Bolt EV. Actually, the base Model 3 directly undercuts many of its rivals – however it remains to be seen how quickly additional options might inflate the sticker price. Any such uncertainties have not reduced the enthusiasm for the new Model 3. Already over 400,000 people have signed up to purchase one and the waitlist carries over deep in 2018.

The supply chain for the Model 3 is now being established and equipment production is underway in the Fremont, CA manufacturing facility, as well as here in Reno.

In a letter to shareholders earlier this month, Tesla also states that the company plans to finalize the locations for at least two more Gigafactories, if not three. This will bring the total of Gigafactories catering to increase solar panel and electric vehicle battery demands to five.

“Later this year, we expect to finalize the locations for Gigafactories 3, 4 and possibly 5 (Gigafactory 2 is the Tesla solar plant in New York)”, the letter reads. “Our Model 3 program is on track to start limited vehicle production in July and to steadily ramp production to exceed 5,000 vehicles per week at some point in the fourth quarter and 10,000 vehicles per week at some point in 2018.”

The EV manufacturer expects to deliver 47,000 to 50,000 Model S and Model X vehicles in the first half of 2017, and to support the launch of the Model 3, will cut down advertising costs and shift away from leasing solar systems. Overall, Tesla hopes to invest up to $2.5 billion in the Model 3 vehicle before construction begins.

“Tesla continues to execute against its mission of accelerating the world’s transition to sustainable energy, and we look forward to hitting the 201 milestones that are critical to our long-term plan,” the firm concluded.

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