Tesla reportedly in talks to build a Gigafactory in South Africa

When Tesla CEO Elon Musk first announced the Gigafactory project, he said that even though the planned capacity of the factory is equal to the entire global production of lithium-ion batteries in 2013, the world would sill need around 200 more giant factories of similar size to support the auto industry’s transition from fossil fuels to electric.

Tesla named the factory in Nevada: “Gigafactory 1”, implying that the company plans to eventually introduce “Gigafactory 2” and so on. Late last year, German Vice-Chancellor and Economy Minister Sigmar Gabriel confirmed being in contact with Elon Musk over the possibility of building a battery factory in the country. Now we learn that Tesla is also reportedly in talks to build another Gigafactory in South Africa.

We recently reported on Tesla opening an office in South Africa and hiring an employee to develop the stationary energy storage market, but now local South African news is offering more context around the hiring and reports talks with the government to build a factory in the Western Cape province.

According to Times Live, Alan Winde, who’s a member of the Western Cape Executive Council for business opportunities, heard about the possibility that Tesla would establish a factory in the province. He then contacted Evan Rice, CEO of GreenCape, an organisation which was formed to help develop the market for renewable energy in and around the Western Cape area.

From there, Winde said his department was in contact with Tesla through GreenCape:

“I said we needed to get involved, and that is when people at GreenCape started phoning Tesla in the US. They had some teleconferences and then a delegation went to see them.”

Not long after the talks started, Rice told Winde that he was leaving GreenCape to work directly for Tesla.

At first glance, South Africa might not look like an obvious location for a Gigafactory considering it’s nowhere close to a major auto market for the company, but it is a very interesting market for stationary energy storage due to high electricity costs and an unreliable grid. A Gigafactory in south Africa would likely only produce cells and battery packs aimed at the energy storage market and not electric cars.

Tesla already has deals in place to distribute the Powerwall and Powerpack with renewable energy companies in South Africa, including Dako Power and Rubicon.

Featured image: Gigafactory 1 pictures from James Lipman’s Instagram