Tesla Motors Inc (NASDAQ:TSLA)’s Gigafactory has raised concerns among analysts about the overall utilization of its production capacity. Tesla Motors Inc (NASDAQ:TSLA) is going to invest $5 billion in the factory, which is likely to create up to 6,500 jobs and the company is likely to reach 50 gigawatts of battery storage capacity by 2020.
These numbers are more than enough to raise doubts however, the CEO of Tesla Motors Inc (NASDAQ:TSLA), Elon Musk, said on Tuesday,
“We want to make sure the gigafactory has excess capacity for grid storage.”
Musk has directly given an insight into the plans of the company and the $5 billion Gigafactory is likely to improve the affordability of Lithium Ion batteries. Out of the targeted 50 gigawatts of electricity, Tesla is likely to funnel up to 15 gigawatts towards stationary energy storage.
Tesla Motors Inc (NASDAQ:TSLA) is planning to work in collaboration with SolarCity Corp (NASDAQ:SCTY) to develop smaller-sized battery packs for residential storage purposes. Tesla is using the customer base of SolarCity Corp (NASDAQ:SCTY) to understand the requirements of the consumer and the two companies are likely to work together to develop a smaller size battery.
Earlier, Tesla Motors chose Nevada for its first Gigafactory and the company is likely to receive tax benefits of up to $1.3 billion from the state authorities. However, Tesla has to comply with certain conditions including investments worth up to $3.5 billion in Nevada in the next 10 years in terms of real estate and equipment expenses. Further, at least half of the people hired in the Gigafactory would be from Nevada. Nevada is likely to have a capital infusion of up to $100 billion in the next 20 years.
This article has been written by Prakash Pandey.