Tesla Gigafactory expected to produce batteries late this year

RENO — Tesla officials on Thursday clarified earlier remarks and said Tesla’s Gigafactory under construction east of here is expected to begin producing lithium-ion batteries late this year for the electric car maker’s Model 3.

Daniel Witt, senior manager of business development and U.S. policy for Tesla Motors, on Wednesday said the battery storage side of the Tesla Motors business plan received a big boost last week when it was announced that the company won a contract to provide Southern California Edison with 80 megawatts of battery storage at one substation.

It will be one of the largest such projects in the world.

The storage units will be produced at the company’s Nevada Gigafactory, which now has to ramp up more quickly to fulfill the contract.

“This is a big deal for Nevada,” Witt said. “There is a one-to-one correlation between the growth of energy storage products and the growth of the Gigafactory project.”

Battery storage, where excess electricity generation is stored so it can be used when it is needed, is the answer to reducing the need for an expansion of traditional peak generation sources, he said.

The New Energy Industry Task Force, re-established by Gov. Brian Sandoval to review green energy policy issues, is considering a recommendation that Nevada’s utility, NV Energy, procure energy storage products to offset the need for new grid infrastructure by 2020.

The Legislature is likely to consider a similar policy when it convenes next year.

“What we’re looking to do, in going back to the mission, is catalyze an entire shift over to more sustainable energy,” Witt said. “The problem, if you want to call it that, with the sun, is that it is only up 12 to 14 hours a day.

“This is transformative in a way frankly that the vehicle application has been in the previous five years,” he said. “Where this is most transformative, most applicable today, is in the commercial and industrial market.”

But it also works for home use, he said.

Witt made his comments at the second annual “Building a Stronger Nevada” conference held at the University of Nevada, Reno.

The Gigafactory now under construction will produce the lithium-ion cells needed for the batteries for the Model 3, the company’s mid-range vehicle that will cost $35,000. The company received 373,000 advance reservations for the car when it was unveiled earlier this year. The first vehicles are expected to be produced in the company’s Fremont, California, plant, by late 2017.

Witt said 14 percent of the factory has been completed with another 16 percent under development.

The factory has 1,200 construction workers on site now, most from Nevada, along with 400 full-time employees working on the manufacturing operation. This number will grow this year because of the storage project, Witt said.

CORRECTION: This story has been updated to reflect that Tesla officials have clarified when battery production will start, that the New Energy Industry Task Force is considering a recommendation that NV Energy procure energy storage products to offset the need for new grid infrastructure by 2020, and that the cost figure for the Edison project is uncertain.

Contact Sean Whaley at swhaley@reviewjournal.com or 775-461-3820. Follow @seanw801 on Twitter.