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Tesla finalizing plans for massive US battery factory

Factory would produce enough batteries to supply 500,000 vehicles by 2020.


PALO ALTO, Calif. – Electric car maker Tesla Motors says it is considering sites in Nevada, Arizona, New Mexico and Texas for a massive battery factory that would employ around 6,500 people.

The company didn’t immediately name the locations it’s considering in those states. Tesla plans to start construction this year and complete the factory, which it dubs its “Gigafactory,” in 2017.

The factory would supply lithium-ion batteries to Tesla’s Fremont, Calif., assembly plant.

Palo Alto-based Tesla says it will invest $2 billion in the 10 million square foot factory, which will cost between $4 billion and $5 billion. Its partners will invest the rest. The company hasn’t identified those partners, but its current battery supplier, Japan’s Panasonic Corp., is expected to be among the investors.

Panasonic signed a deal last fall to supply Tesla with 2 billion battery cells over the next four years. But Tesla has fretted that current battery supplies won’t meet its future demands.

The new factory will provide enough batteries to supply 500,000 vehicles by 2020, Tesla said. The electric car-maker expects to produce 35,000 vehicles this year.

Tesla currently sells just one vehicle, the Model S sedan, which starts around $70,000. But it plans to begin making a crossover, the Model X, later this year, and wants to bring a lower cost, mass market vehicle to market in 2017. The new factory would lower battery costs by 30%.

©The Canadian Press