Tesla to invest over US$3.6 billion in Gigafactory to produce Semi electric truck

Tesla to invest over US$3.6 billion in Gigafactory to produce Semi electric truck

On January 24th, Tesla said it would invest more than US $3.6 billion to expand its Nevada Gigafactory complex with two new factories, one to mass produce its long-delayed Semi electric truck and the other to make its new 4680 battery cell.

The cell plant would be able to make enough batteries for 2 million light-duty vehicles annually, including batteries using the 4680 type cell. The 4680 is the key to Tesla's goal of halving battery costs and ramping up battery production nearly 100 fold by the year 2030.

The facilities will employ 3,000 people, expanding the electric vehicle maker's complex east of Reno, where it runs a battery joint venture with Japan's Panasonic Corp and makes vehicle parts and power backup systems.

Panasonic supplies cells to the gigafactory and Tesla assembles them into battery packs there.

Tesla has struggled to ramp up production of the 4680 at its factories in Austin, Texas and Fremont, California. Experts say the dry-coating technique used to make the larger cells in these batteries is new and unproven and the company has been having difficulty scaling up manufacturing to the point where the big cost savings kick in.

The move shows that Tesla is finally committed to large-scale production of the Semi, which was originally supposed to start rolling out of factory doors in 2019. In December, Tesla made the first Semi deliveries to PepsiCo, but there is no sign of a high output of the model.

Other customers who have ordered Semis include Walmart, United Parcel Service and Brewer Anheuser-Busch.

The Semi is a truck for 18 wheel semi-trailer vehicles and has a range of 800 km on a single charge with a gross weight of 37 tonnes, including trailer and cargo. It may qualify for tax credits of US $40,000 for clean commercial vehicles under the Inflation Reduction Act.

In November, Tesla chair Robyn Denholm said Tesla might produce 100 Semis in 2022, but the company hasn't disclosed a figure for the model in its fourth-quarter production report.

Musk said on a post-earnings call in October that the EV maker hoped to produce 50,000 Semis in 2024.

Mitch Landrieu, senior advisor to US President Joe Biden, said that Tesla's Tuesday announcement is the latest in more than $300 billion in private sector investment in clean energy and semiconductor manufacturing.