Giga Nevada

Lithium-ion battery factory

For the first large Tesla factory, see Tesla Fremont Factory.

Giga Nevada

Drone view in December 2019

Location of Giga Nevada

Show map of Nevada

Giga Nevada (the United States)

Show map of the United States

Built| c. January 2015[1]
Operated| January 2016[2]
Location| Storey County, Nevada, United States
Coordinates| 39°32′17″N 119°26′24″W﻿ / ﻿39.538°N 119.440°W﻿ / 39.538; -119.440Coordinates: 39°32′17″N 119°26′24″W﻿ / ﻿39.538°N 119.440°W﻿ / 39.538; -119.440
Industry| Energy storage
Products| Electric vehicle parts, Lithium-ion batteries
Employees| 7,000[3]
Area| 2,864 acres (11,590,000 m2) (land) [4]
Owner(s)| Tesla Inc.

Tesla Giga Nevada (or Gigafactory 1)[5] is a lithium-ion battery and electric vehicle component factory in Storey County, Nevada.[6][7][8] The facility, located east of Reno, is owned and operated by Tesla, Inc., and supplies the battery packs for the company's electric vehicles (except vehicles produced at Giga Shanghai).[9] If fully built out, the building will have the largest footprint in the world.[10]

The facility is located at the Tahoe Reno Industrial Center (TRIC) and employed around 7,000 people at the end of 2018,[3] with a goal of hiring thousands more with a total of nearly 10,000 statewide. Future manufacturing programs may also move to Nevada.[11][12][13]

The factory started limited production of the Tesla Powerwall home energy storage device in the first quarter of 2016[14][2] using battery cells produced elsewhere, and began mass production of cells in January 2017.[15] Nevada Governor Brian Sandoval estimated that Nevada could enjoy $100 billion in economic benefit over two decades from the construction and operation of the factory.[12] The grand opening event was held on July 29, 2016.[16]

Giga Nevada is aligned on true north, which was done so that the equipment can be mapped by GPS and solar panels on the roof can be accurately aligned.[citation needed] The factory has also been designed to become entirely energy self-reliant. Tesla intends to power the structure through a combination of on-site solar, wind and geo-thermal sources.[17]

According to Tesla CEO Elon Musk, one hundred factories like Giga Nevada would be necessary to transition the world to sustainable energy consumption without any increase in production density such as switching to a dry electrode coating process.[18]

## Contents

* 1 History
* 1.1 Factory location
* 1.1.1 State competition and incentives
* 1.1.2 Logistics
* 1.2 Construction
* 1.3 Future expansion
* 2 Operations
* 2.1 Production
* 2.1.1 Cell level
* 2.1.2 Product level
* 2.2 Output goals
* 2.3 Karl Hansen investigations
* 3 See also
* 4 References
* 5 External links

## History[edit]

Initial public mention of the gigafactory concept was made in November 2013,[19][20] although Tesla's internal plans predated that; Tesla had investigated almost 100 sites.[citation needed]

In July 2014, it was announced that Panasonic had reached a basic agreement with Tesla to invest in a factory,[21][22][23] estimated to cost $5 billion.[24][25] The northern Nevada site and plans were announced with state officials on September 3, 2014.[8] Panasonic agreed to lead the battery cell production portion of the manufacturing, and Tesla CEO Elon Musk indicated in 2015 that the total Panasonic investment would be US$1.5–2 billion,[26] and that Tesla would not expand beyond original plans.[27] In early 2016 Panasonic president Kazuhiro Tsuga confirmed a planned total investment of about $1.6 billion by the company to equip the factory to full capacity.[28] However, after the number of Model 3 reservations became known in April 2016,[29] Panasonic moved production plans forward[30][31] and announced a bond sale for $3.86 billion, most of it to be invested in Gigafactory.[32][33][34]

### Factory location[edit]

Tesla initially considered several sites, but northern Nevada was not one of them. A manager at Reno–Tahoe International Airport offered some of its 3,000 available acres at Reno Stead Airport, and persuaded TRIC owner to split the bill for a private jet to fly Tesla people to the area. They tried several times, and Tesla eventually came to TRIC and was pleased by the speed of regulatory work.[35][36][37]

#### State competition and incentives[edit]

Grants and tax abatements for Gigafactory until year 2034[38][39][40]

$120M: Investment-dependable transferable tax credits, mostly from film tax (9%)

$75M: $12,500-per-job transferable tax credits (6,000 jobs) (6%)

$725M: 20-year 100% sales tax abatement (56%)

$332M: 10-year 100% property tax abatement (26%)

$27M: 10-year 100% modified business tax abatement (2%)

$8M: Discounted electricity rates for eight years (1%)

At least five states competed to attract Gigafactory by offering tax incentives, cash grants[41][42] and other methods in the hope of future business; California,[43][44] Arizona,[45] Nevada,[46] New Mexico, and Texas,[47] where San Antonio had offered bigger incentives with no sales tax, but did not get the factory. States without sales tax were topping the list of preferred sites.[38][46][48][49][50]

Nevada estimates a tax base of $1.9 billion over 20 years.[40] After sticky negotiations,[50] Tesla chose the TRIC as the location of the Gigafactory mainly due to speed[46] and a State of Nevada incentive package. Other location reasons were rail access, direct sale ability,[42][48] and low air humidity[51] to ensure less than 300 ppm humidity in production.[52] The owners of TRIC gave the first 1,000 acres to Tesla for free.[53]

The incentives include $195 million in transferable tax credits depending on Tesla's investment schedule and job creation, similar to the Volkswagen Chattanooga Assembly Plant deal and others.[38][49][50][54] Tesla's investments earn them about $10 million in tax credits per quarter,[55][56][57] and by July 2016 had sold these for $20 million cash.[58] At the end of 2016, Tesla and Panasonic had 477 employees and 5,591 construction workers, mostly Nevada residents, and invested $1.1b earning $59m in tax credits.[59] By 2019, the gigafactory companies (now with 7,700 employees) had invested a combined $4.9 billion dollars ($3b by Tesla, $1.7b by Panasonic, and $100m by H&T plus some equipment). This qualified the companies for the full tax credit amount of $195 million[60] which were repurposed from other tax credit programs for the filming and insurance industries, keeping Nevada State tax programs neutral. The development surpassed the original 2014 plan for investments and 6,500 employees. Numbers for construction were $2 billion and 17,000 workers.[61][62]

The incentive package also includes 20 years free from sales tax and 10 years free from property tax, depending on Tesla's ability to meet performance expectations (like investing $3.5 billion in Nevada).[38][50] By 2034, this package could have accumulated to a value of $1.25 billion in missed taxes; the 10th largest in the US. The $725M sales tax abatement was particularly important, as 5 other states charge no sales tax at all, and 34 states (including Arizona and Texas) don't charge sales tax on manufacturing equipment.[38][49] With a tax base of $1.9 billion and an incentive package of $1.25 billion, the projected end result was calculated as a tax-per-abatement ratio of 1.52.[39][46][63] For 2014–2018, tax abatements were $240 million.[61] The nearby data centers from Apple Inc. and Switch also received incentives.[46][64]

Nevada estimates the construction impact at $2.4 billion and the economic impact from the project at $100 billion over two decades ($5 billion/year, of which $353–378 million are wages) yielding $57 million in state and local taxes.[39][40][61] Some economists said that number was "deeply flawed," for instance, it counted every Tesla employee as if they would otherwise have been unemployed and made no allowance for increased government spending to serve the influx of thousands of local residents.[12][65][66][67][68][69] The regional impact is estimated to be $3.5 billion per year. Other large companies chose to create activity in the area partly due to Gigafactory.[61] Tesla agreed to pay $7.5M per year for 5 years ($37.5M) to the school system.[38]

#### Logistics[edit]

The 6-mile Nevada State Route 439/USA Parkway was built by TRIC, and connects TRIC to Interstate 80. Since 2004, the TRIC owners had planned to extend SR 439 south to U.S. Route 50.[70] In 2014, Nevada Department of Transportation advanced the otherwise dormant south extension.[71][72][73][74] This improves traffic conditions for the many large logistics centres at TRIC and Gigafactory, bypassing Reno on the way to U.S. Route 50.[75][76] Tesla plans to ship batteries by rail[77] to its car factory in Fremont.[42][78]

Water is scarce in Nevada, and some of the water for the Gigafactory is piped from a treatment plant in neighboring Washoe County.[50] A 1.5 million U.S. gallons (5.7 million L) water tank is also used (about two Olympic-size swimming pools).[79][80][81]

TRIC built high-pressure natural gas lines to its sites, but Tesla decided to use electricity and not connect natural gas to Gigafactory.[82] Heat pump technology is used for heating,[83][84] and a $6.8 million hot water storage tank with 10 million gallons is used to balance heat.[79][52] In 2014 Navigant estimated 100 MW electricity delivery which could be supplied (on average) by nearby wind turbines and roof solar panels,[85] whereas a former Tesla logistics manager in 2016 estimated 300 MW to produce 35 GWh of battery capacity per year.[86] Tesla installed solar panels on the roof in early 2018,[87][88] to eventually reach 70 MW[89] from 200,000 solar panels.[90]

Tesla works with a mining company to extract lithium 200 miles (320 km) to the southeast, at Silver Peak in Esmeralda County. They intend to process the underground brine water industrially over hours rather than the traditional way of letting the water evaporate from ponds over a year.[47][91]

### Construction[edit]

Elon Musk on a March 2015 tour of construction

Tesla had already started brush clearing[92] and grading[46] during the summer of 2014[93] (prior to official announcement in September; permit date was June 26),[79] with vertical construction reported in January 2015.[1] Tesla and its partners intend to complete the facility by 2018.[94][failed verification] On March 18, 2016 a group of journalists were allowed to visit the Gigafactory under strict conditions and found that 14% of the final building area had been completed.[95] By April 2016 there were around 600 construction workers.[96] Depending on season and building stage, the number of construction workers has fluctuated between 250 and 1,800.[97] On June 13, 2016, Tesla filed for a $63m expansion into section E on the site. By September 2016, the building had grown to 1.9 million sq ft (0.2 million m2) with further areas under construction.[98] As of January 2017[update] the building's footprint is 1.9 million sq ft (0.2 million m2) with 4.9 million sq ft (0.5 million m2) of usable area across several floors.[99] A combined permit value of $322m was registered in July 2016,[100] and $1.2b in July 2017.[79]

Gigafactory and the other large companies affect the local area by increased needs in transportation (SR 439) and housing;[101] house prices increased by 17% in 2015 from half of the peak in the previous 2008 building bubble. Local businesses were wary of building new homes, which is being done mostly by out-of-state companies.[102]

Design features

HVAC equipment is located "between the floors rather than on walls and ceilings of a floor."[103] All steel is from the United States. Tesla is its own contractor on the project, learning how to build other factories should they choose so.[29][80]

### Future expansion[edit]

On April 30, 2015, Elon Musk announced that the factory heretofore known simply as the Gigafactory was now to be known as Gigafactory 1 as Tesla plans to build more such factories in the future. At the same event, Musk also said that he believed that other companies would build their own similar "Gigafactories".[6] After receiving $800M of orders ($179M PowerWall, $625M PowerPack) within 1 week of unveiling, Musk estimated that the Gigafactory 1 is not enough to supply demand.[104] In May 2017 at a TED Talk, Elon Musk stated his intention to announce three or four new Gigafactory sites to manufacture both batteries and complete cars.[105]

Prior to the building of more gigafactories, Tesla may expand and potentially double the size of Gigafactory 1. In June 2015, Tesla announced it exercised its option to buy 1,864 acres (754 hectares) of land adjacent to the original 1,000-acre (400 ha) Gigafactory site. According to Tesla spokeswoman Alexis Georgeson, "The purchase gives us the opportunity for future growth." In Tesla's dealings with the state of Nevada expanding the size was always an option should the company choose to do so, said Steve Hill, director of the Governor's Office of Economic Development. "Tesla had said that the factory will be up to 10 million square feet [1 million square meters] in one or two stories," Hill said. "On the earnings call (in May 2015), Elon said they aren't yet committing to this but that they are considering increasing the size of the gigafactory here by 50 to 100 percent."[106]

Early estimates from 2014 projected that the factory would employ approximately 6,500 people by 2022, requiring at least half of them to be Nevadans.[39]

## Operations[edit]

Tesla owns the land and building, and leases parts of the building to several suppliers.[107] The Gigafactory is operated by a management team under executive Jens Peter Clausen, formerly a LEGO executive, who is VP of Gigafactory at Tesla.[108] By April 2016 Gigafactory had 317 Tesla employees and 52 by Panasonic, most of them from Nevada,[96] and 850 by December 2016.[109] In 2017, 3,249 employees were registered,[110][111] and by December 2018, 7,000 people worked at Giga Nevada,[107][112] increasing to 7,557 by June 2019, mostly Nevadans.[60]

### Production[edit]

The factory is intended to gradually[113][114] provide cradle-to-cradle handling of batteries, from raw material over components to finished products, and recycling old batteries into new.[25] Cells constitute most of the value creation, whereas packing and electronics are minor parts.[115] Tesla views production as more important than products, and assigns more engineers to developing production equipment than to developing products.[116][117][118]

#### Cell level[edit]

Computer generated image comparing 2170 and 18650 cells

The battery cells produced at the Gigafactory are the new form factor '2170', jointly designed and engineered by Tesla and Panasonic.[119] They are larger than the 18650 cells used in the Model S and Model X automobiles. While the cells were originally expected to be at least 20 mm in diameter and 70 mm in length,[120][121] revised specifications for the optimized form factor are 21 mm (0.83 in) by 70 mm (2.8 in). Tesla thus refers to it as the '21–70'[103] or '2170'[119] whereas Samsung refer to the size as '21700'.[122]

Panasonic was expected to begin cell production in 2016,[108] and continue for at least 10 years.[123] Among the machines spotted at the opening in July 2016 were presses and rollers for cathodes.[124] Gigafactory began mass production of 21700 cells in January 2017.[15][114] Only Panasonic cells are to be used in the US-made Model 3,[125] and Tesla uses 21–70 format for Model 3 and Powerwall/Powerpack.[114] Panasonic owns some of the cell production equipment[123] in an area not accessible to others. By December 2018, Panasonic operated 11 cell production lines.[107] Some of the lines were temporarily converted from storage (NMC) to vehicle (NCA) to increase supply for the Model 3.[126]

Tesla uses nickel manganese cobalt (NMC) lithium cells for stationary storage (Powerwall and Powerpack), and nickel cobalt aluminium (NCA) lithium cells for vehicles.[127] The cell components are then encased in aluminum cans made by Heitkamp & Thumann inside GF1,[128][107] using 10,000 tons per year.[129] An April 2019 report quoting former and current employees at Panasonic's side of the Gigafactory described how half a million of battery cells per day were scrapped because of production defects related to carelessness, lack of respect for operating procedures, and the overall pressure to increase output.[130][131][132] Panasonic delivered three million battery cells daily to Tesla in 2018.[107] At the end of 2019, Panasonic had 3000 US workers and 200 Japanese technicians at Gigafactory 1,[131] quality had improved to increase production to a rate of 30 GWh/year on the same equipment. Panasonic occupies more than half of the factory.[132]

#### Product level[edit]

Cylindrical cell (18650) prior to assembly

The basis of the early Tesla products are lithium-ion cells in the 18650 form factor. These cylindrical cells have a diameter of 18 mm and are 65 mm in length, a size originally used for the batteries of laptop computers. They are used in Model S and X, and Powerwall 1.

In October 2015, Tesla moved the Tesla Powerwall and Powerpack production from its Fremont factory to the Gigafactory. The Tesla Powerwall has been produced in the finished portion since the third quarter of 2015.[95] 2170-cells are transferred on autonomous vehicles from Panasonic to Tesla, where workers and robots assemble cells into packs using bandoliers, cooled by tubes made onsite by Valeo.[107][133] Drive units (motor and gearbox) for Model 3 are made with 90% automation.[107]

### Output goals[edit]

As of 2014[update], the projected capacity of Gigafactory for 2020 was to have been 35 gigawatt-hours per year of cells as well as 50 gigawatt-hours per year (5.7 MW) of battery packs.[21] Production could be equivalent of supplying 500,000 Tesla cars per year.[25][94][134] When finished, the factory is planned to produce more lithium ion batteries in a year than were produced in the entire world in 2013. As of May 2019, Gigafactory 1 has achieved a theoretical capacity of 35 gigawatt-hours per year but utilization levels have resulted in a 24 gigawatt-hour output, according to Panasonic President Kazuhiro Tsuga.

Elon Musk announced at the 2021 Shareholder Meeting that Tesla will aim to increase the production capacity at both Giga Nevada and The Fremont Factory by 50% in the next couple of years.[135]

### Karl Hansen investigations[edit]

In August 2018, Karl Hansen, a former member of the company's security team, filed a whistleblower complaint with the Securities and Exchange Commission. In the complaint, he alleges that Tesla suppressed an internal investigation into various criminal activities that occurred at Giga Nevada during his tenure. For one, Hansen alleges that the company refused to inform the DEA and local law enforcement officials about evidence of cocaine and crystal methamphetamine smuggling occurring on factory grounds in connection with a Mexican drug cartel.[136] Hansen also claims in it that the company successfully suppressed his internal investigation into the alleged theft of $37 million worth of raw materials.[137]

Following the complaint, Hansen went on to allege that Tesla fired him as an employee and then as a contractor because he was "not a Tesla team player."[138] Hansen then cooperated with an FBI investigation after discovering that Tesla was spying on him and a roommate immediately following his expulsion; the investigation was later shut down without explanation following months of work. Hansen detailed his entire story in a three-hour-long interview.[139]

## See also[edit]

* Tesla Factory (Fremont)
* Giga New York
* Giga Shanghai
* Giga Berlin
* Giga Austin
* List of Tesla factories

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## External links[edit]

| Wikimedia Commons has media related to Tesla Gigafactory 1.

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External media

Development of Gigafactory
Images
Inside the Tesla Gigafactory (gallery), March 18, 2016
Factory size comparison
Aerial view, July, 2017
The 2170 cell
Video
Timelapse of construction
Tesla Gigafactory, March 18, 2016
Gigafactory launch event presentation with Elon Musk and JB Straubel on YouTube
Fly-over, September 2016 on YouTube

* Gigafactory official website
* “The Logic of Tesla’s Gigafactory: ‘The Economics Are a No-Brainer’”, The Wall Street Journal
* “Assault on batteries”, The Economist, 2014-06-14 (print edition date)
* Tesla timeline: A list of construction projects at gigafactory site so far, February 2015
* Inside Tour Of The Gigafactory 2016-04-25

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*[13 kWh]: 13 kilowatt hour
*[210 kWh]: 210 kilowatt hour
*[3 MWh]: 3 Megawatt hour