January 6, 2017

Tesla started building the Gigafactory in Nevada back in 2014. Although it is far from finished, the company has announced that the mass production of lithium-ion battery cells has already begun at the facility. Together with Panasonic, Tesla started manufacturing the cylindrical “2170” battery cells that will initially only be used in Tesla’s Powerwall 2 and Powerpack 2 energy products.

According to the company’s blog post, production of the cells for the upcoming Model 3 EV will kick off sometime in Q2 2017. By 2018, the Gigafactory will produce 35-gigawatt hours of lithium-ion battery cells per year, which is almost as much as the current world’s battery production.

By gradually increasing production, Tesla will be able to decrease the cost of battery cells. This will then enable the company to make more affordable vehicles, like the Model 3 which starts at $35,000. The EV, which has received over 250,000 reservations in the first 36 hours, will go into production this year.

The Gigafactory in Nevada is being built in phases. This allows Tesla and Panasonic to begin manufacturing batteries inside the finished sections and expand their production later on when other parts of the factory are finished. Tesla says that the phased approach allows it to learn and therefore continuously improve its construction as well as operational techniques.

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