Tesla Plans a US$3.6 Billion Expansion to Nevada for Semi Truck and Battery Cell Production

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On January 24, 2023, Tesla announced its plan to take a step in the direction of expansion. The plan involved investing more than US$3.6 billion to expand its Nevada Gigafactory complex with two new factories. One of these factories is finally going to be the site for the mass production of its long-delayed Semi electric truck. The other factory is slated to make the all-new 4680 battery cell.

The cell plant is said to be sufficient for the production of batteries for around 2 million light-duty vehicles on an annual basis. These batteries would include the 4680-type battery as well. The much-discussed 4680-type battery is the key factor in allowing the company to reach the goal of halving battery costs and ramping up battery production nearly 100-fold by 2030.

Taken together, the new factories will employ roughly 3,000 people and take the vehicle manufacturer’s premises to the east of Reno. This is also the site where Tesla makes vehicle parts and power backup systems as well as runs a joint battery venture with Panasonic. The Japanese brand is currently responsible for supplying cells to the Gigafactory before Tesla assembles them into battery packs.

According to the reports, Tesla has been noted to have hit a wall in terms of 4680-type battery production. The goal of scaling production of the batteries at the units in Fremont, California and Austin, Texas has not been achieved yet. Expert opinion suggests that the dry-coating technique Tesla utilizes in the production of bigger cells in this variety of batteries remains unproven. This new technique of Tesla is a major reason there is significant trouble in boosting manufacturing to the threshold of raking in large cost-savings.

The new expansion plan put forward by Tesla suggests that the company is finally making headway in getting their Semi trucks on the floor. Semi is an 18-wheel semi-trailer vehicle that has a  range of 800 km on a single charge with a gross weight of 37 tonnes, including trailer and cargo. With the Inflation Reduction Act, the truck may allow for tax credits of US$40,000 offered for clean commercial vehicles.

The trucks were initially slated to hit the markets in 2019 and even made the first set of deliveries to PepsiCo in December. Brewer Anheuser-Busch, United Parcel Service, and Walmart are also awaiting their Semi trucks. However, a high rate of output of this particular model does not seem to be in the books.

According to Robyn Denholm, chair of Tesla, the company had plans to produce around 100 Semis in 2022 but the company had not disclosed any figures in the fourth-quarter production report. As of now, the company has set the aim at 50,000 Semis in 2024, as revealed by Musk.

Tesla’s expansion plan is the latest announcement in the private sector clean energy investment and semiconductor manufacturing since President Biden took office.

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