The Genius Innovation Behind the Tesla Gigafactory

Tesla GigafactoryPhoto from Getty Images

Originally Posted On: https://leaders.com/articles/innovation/tesla-gigafactory/

 

When most people first think of Tesla, they think of the Tesla cars like the Model 3, which are now commonly seen on the road. Or they might think of the company’s products driving innovation in renewable energy, such as the Tesla Roof. While these items are certainly impressive and capture the public’s interest, the future success of Tesla doesn’t depend so much on their products but rather on one thing: the Tesla Gigafactory.

The Tesla Gigafactory represents a fascinating idea with the capability to transform manufacturing and production as we know it. It’s an innovative concept with a lot of promise. One that’s caused Elon Musk and Tesla to push all their chips into the middle of the table. Think of the Gigafactory as the motor that keeps Tesla’s production running. It’s the machine that builds the machines, as Musk puts it—a massive building featuring millions of square feet in floor space. Should the Gigafactory idea prove successful, Tesla is set to see unprecedented success well into the future.

With so much hinging on the successful execution of the Tesla Gigafactory, it’s important to keep up to date with the latest news. Get the most updated information on the current Gigafactories, including those which the company has announced. Also, find out where future Gigafactories might pop up.

The Vision and Reality of the Tesla Gigafactory

While some people may associate Tesla with their factory in Fremont, California, this Tesla factory isn’t actually a Gigafactory. From the outside, the Tesla factory in Fremont looks like one giant building, but in reality, it’s more like a series of interconnected buildings. The factory has grown over the years, adding on more structures when needed as demand has risen. It’s that demand that has made the idea of a Gigafactory such a necessity.

A Response to Demand

When Tesla burst onto the scene with their electric vehicles, they hoped to show that their cars could be stylish, high quality, and environmentally friendly. The response was almost overwhelming, and demand, particularly for the Model 3, skyrocketed. The demand has grown so great that wait times for a Model 3 can be as long as three months or more. And by all metrics, the demand doesn’t appear to be slowing down anytime soon. Elon Musk revealed the Tesla Cybertruck back in November 2019, and preorders for the vehicle have already eclipsed over one million. Needless to say, Tesla needed a solution that allowed for faster vehicle production.

That’s where the Tesla Gigafactory comes in. This Tesla plant provides the equipment, space, and technology needed to manufacture everything the company provides. That includes electric cars, lithium-ion battery cells, solar panels, and much more. The Gigafactory allows for faster production and eliminates extra costs of shipping parts to different locations for assembly. As Tesla’s own website explains, the Gigafactory will reduce costs for electric vehicle batteries, bringing the cost of Tesla cars down as well. The ripple effect will be that more people can afford a Tesla vehicle, which will drive demand up even more.

More Ground to Cover

While the idea behind the Tesla Gigafactory is promising, the company still has a lot of ground to cover to make it a reality. The first one to start construction was Tesla’s Nevada Gigafactory. The massive facility uses nearly two million square feet of floor space, but it has yet to reach its full potential. At the moment, this Gigafactory doesn’t actually produce any Model 3s, at least not in complete form. Instead, the factory only produces motors for the Model 3. They then ship those motors over to the Tesla factory in Fremont, where they finish assembling the vehicles.

That’s not to say that the Nevada factory is complete. In fact, the Gigafactory appears to only be working at around 30 percent of its capability. In addition to the Model 3 motors, the factory currently produces Model 3 battery packs and energy storage products such as the Powerpack and Powerwall.

Over time, the Gigafactory will grow and hopefully fulfill Elon Musk’s dream: achieving complete vertical integration for all Tesla products. The goal is to be entirely self-sustaining, which allows the business to produce items at a faster pace and meet growing demands. There’s still a long way to go before Musk’s vision turns into reality, but with advancements in technology, that should all change quickly.

Current and Upcoming Tesla Gigafactories

To say that Tesla has big plans for its Gigafactory idea would be an understatement. It may not be long until we see such factories all over the world. The foundations, so to speak, have been laid, and the potential is clear. Learn about the current Gigafactories that are up and running, those under construction, and where new ones may show up in the future.

Giga Nevada

As mentioned above, Tesla already has a Gigafactory up and running in Nevada. It’s located in Sparks, Nevada, just outside of Reno. The factory has been open since 2016 and continues to grow. When it first opened, Tesla promised it would provide more than 6,000 jobs while providing more than 100 billion dollars to the local economy. Tesla also said that the factory would eventually generate 35 gigawatt-hours worth of batteries. So far, it appears Tesla has made good on those promises, such as employing more than 7,000 people on-site.

Plans are for the factory to continue expanding. There are indications that Tesla would like to move some of their semi manufacturing to the Nevada factory. Tesla doesn’t even fully utilize the facility yet, with some of its space leased to other companies like Panasonic. One can’t help but feel excitement for what the Gigafactory will look like when it’s complete.

Giga New York

The other fully running Gigafactory in the United States is located in Buffalo, New York. Unlike other Gigafactories Tesla has built and plans to build, this facility has a narrower focus. The 1.2 million square foot Tesla factory only works on solar energy products. You’ll find no electric vehicles here. Their production of solar energy items started back in 2017 with a focus on solar cells. Years later, Tesla added more elements to their production lines, including the components for energy storage products.

This Gigafactory appears to have a bit smaller scale compared to others. The facility originally belonged to a steel manufacturing company before switching over to Tesla’s unique products. Tesla plans to create more than 5,000 jobs in the state of New York over the course of a decade. The company hopes to turn Buffalo into a center for sustainable energy production.

Giga Shanghai

Many people look at the Shanghai Tesla Gigafactory as the ultimate example of what Elon Musk envisioned. With little red tape in China and fewer environmental considerations, Tesla constructed the factory in only 168 days. At the start of production in Giga Shanghai in 2020, Tesla made about 4,000 Model 3s every week. About a year later, Tesla has almost doubled their level of production, giving support to how achievable the Gigafactory goals are. Tesla is optimistic it can make 450,000 vehicles every year in Giga Shanghai.

The factory has proven to be incredibly successful at meeting demand, at least for the time being. In fact, Tesla has stated that the output at the Gigafactory could lead to shipping finished vehicles to meet Europe’s demands, too. The company is happy with the results from China and even plans to open a research and development facility there.

Giga Berlin

The Gigafactory in Berlin has had its fair share of bumps in the road. The factory had an original construction completion date in the summer of 2021, but it has since suffered some delays. According to Elon Musk, much of the blame is due to bureaucratic issues with the German government. Many of the delays are related to environmental laws. With the factory being built near a nature preserve, it’s understandable that many in the area would be concerned about environmental impact, even if it is an electrical vehicle production plant.

Those delays could soon come to an end. At a dinner party featuring 9,000 people, Musk announced that vehicles will begin rolling out of the factory in November 2021, meaning production is already underway. Tesla has yet to complete construction fully, but the facility can still produce Tesla products.

This will be the first Tesla Gigafactory in Europe and will produce the Tesla Model Y vehicle. It’s scheduled to finish construction in April 2022, though further work and expansion will likely occur after that date. The company has even submitted plans for a Tesla battery factory next to the Gigafactory, meaning the future is bright for Tesla in Europe.

Giga Texas

The Tesla Texas Gigafactory is another facility under construction. Announced in July 2020, the Austin, Texas, construction has progressed rapidly. The site is about 2,500 acres in area and is intended to produce several types of electric vehicles in Tesla’s fleet. One of those vehicles is the much-hyped Tesla Cybertruck. Giga Texas will be the first factory to produce this truck, meaning Tesla can finally start fulfilling preorders.

While some manufacturing has taken place at the facility, much of it is limited. Giga Texas will soon fully fire up its production line for stage one of the plan. So consumers can expect to see even more Tesla vehicles on the road soon.

Rumored Gigafactories

  • Giga UK: Tesla apparently reached out to people in the UK about building a Gigafactory there. However, no concrete information has come out to the public so far.
  • Giga India: Recently, Tesla established a business unit in India, leading many to speculate about the company building a Gigafactory in the country. The move would make business sense as it would decrease or eliminate import duties for shipments to parts of South Asia.
  • Giga Asia: With the success of Giga Shanghai, Tesla is likely looking to expand to other parts of East Asia. The two most likely countries to receive a Gigafactory would be Japan or South Korea.

Takeaways From the Tesla Gigafactory Idea

When looking at the Tesla Gigafactory, it’s easy to get stuck on the sheer size of the thing. Yes, the factory is massive, but it represents much more than size. If anything, the idea represents progress in manufacturing and production that the world hasn’t seen in decades. Here are some key takeaways from Tesla’s Gigafactories.

1. Vertical Integration

Every corporation has the dream of keeping everything in-house. That’s the goal of vertical integration. When you control every part of the production process, you have tighter control over product quality and cost. It also saves companies money from what they would have spent on outside resources and clients. The Gigafactory ensures Tesla has total control over everything and can make changes when necessary without much of a hassle.

2. First-Principles Thinking in Action

It’s part of Elon Musk’s leadership style to engage in first-principles thinking. The key to this type of thinking is to always ask “why.” It’s a matter of reverse engineering what many people assume to be true. Just because something is the status quo doesn’t mean it has to be like that.

The Tesla Gigafactory takes a tried and true process and asks why it’s done that way. With first-principles thinking, you work backward and create new and better systems. The result can sometimes be something as radically different as a factory with the floor space to hold nearly a hundred football fields.

3. Innovating for the Customer

Perhaps the most important takeaway of the Gigafactory is the potential for innovation it provides for the customer. One way customers stand to benefit is from price reductions. Many modern conveniences we enjoy today would have been unaffordable mere decades ago. The same may hold true for Tesla vehicles if the company follows through with the promises of their Gigafactories. 

Just think of how much could change if Model 3s, Ys, and future vehicles become affordable to the average shopper.

The main difficulty Tesla has had comes from production. The demand is there, but the company can’t produce cars fast enough. The Gigafactory may be able to solve this problem, giving Tesla more room to breathe and get their products out to more people. If they’re able to solve this problem, they can create more products with the potential to transform the world. Their current initiatives allow them to make headway in their innovation strategy while revolutionizing other industries in the process.

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