Tesla is ramping up spending on its battery factory – Gigafactory is more “space efficient” than expected

The state of Nevada gave an update on the developments of Tesla’s Gigafactory for the second quarter of the year. The company needs to keep up with the state’s requirements in order to get access to the $1.3 billion incentive package the state offered to secure the 6,500 jobs the factory is expected to create in Nevada and so far, so good for Tesla. 

The company increased its spending on the project by 26% during the second quarter and they have now spent $183 million of the $2 billion they plan on contributing to the $4 to $5 billion estimated total cost of the project.

Tesla originally planned for a 10 million square-foot modular factory on 2-story with the first phase, the pilot plant (see picture above), representing about a quarter of the total building. This plan was for a total battery cell output of 35 GWh and battery pack output of 50 GWh or enough for 500,000 vehicles. But last month, we reported on comments from county official from Nevada about Tesla considering the possibility to expand the project to 24 million square-foot.

During this week’s conference call for the second quarter financial results, Tesla’s management refused to comment on what kind of battery output they could get out of the Gigafactory if they were to go ahead with an expansion of the project. But Elon Musk, Tesla’s CEO, said that the company managed to improve on the anticipated efficiency of the plant:

But what we have found is, with the Gigafactory, that as we spent more and more time on it, we found we’ve been able to improve the space efficiency of the production and the overall efficiency by more than our initial expectations. So the net result is that we think in the same volume we can do potentially significantly more output.

From these comments, one could expect Tesla to eventually update the 35 GWh and 50 GWh figures to represent the improved efficiency.

The company reiterated a start of production for the first quarter of 2016. According to the Reno Gazette-Journal, which so far has been an excellent source of information regarding the Gigafactory project happening in their backyard, Tesla now employs 31 workers full-time and 721 construction workers worked on the site during the second quarter. Panasonic, Tesla’s partner in the project, is also employing 5 people at the site.

73 percent of the workers come from Nevada, which meets and surpasses the state’s requirement of 50%, making the company eligible to start requesting tax refunds under the incentive package.

Tesla is expected to create up to 6,500 jobs when the factory will be operating at full capacity (2020).