Electric car manufacturer Tesla Motors is planning to build a giant battery cell factory, which it has labelled a ‘gigafactory’, as sales and revenue continue to beat expectations.
The new factory will allow the company to lower costs by consolidating the supply chain. It will also help in solving its main bottleneck issue – the shortage of cells – as it tries to increase production and sales.
In a letter to shareholders, Tesla said, “[The factory] will allow us to achieve a major reduction in the cost of battery packs and accelerate the pace of battery innovation.
“Working in partnership with our suppliers, we plan to integrate precursor material, cell, module and pack production into one facility. With this facility, we fell highly confident of being able to create a compelling and affordable electric car in approximately three years.”
On February 13, Tesla’s shares topped $200 (£120.11) for much of the day, posting an intraday record of $202.72 (£121.74). This marked the second day in a row that the company had broken its own record.
The figures represent a significant increase for the publicly traded automaker, with shares closing at $38.45 (£23.09) just over a year ago.
Tesla currently produces only one vehicle – the Model S sedan – but says it expects to deliver 55% more of model over 2014, when compared to 2013, reaching 35,000.
Production will increase to around 1,000 cars a week, up from 600 per week, to accommodate this. The company, owned by PayPal founder Elon Musk, also has plans to deliver a wider range of vehicles covering different price ranges and to expand into new markets.