This post was originally published on Smartplanet.com
As expected, Tesla unveiled details of its"gigafactory" on Wednesday.
The factory will build lithium-ion batteries for the company's popular electric cars. But it will also significantly reduce the price of the batteries. Tesla estimates that the factory will bring the price down by as much as 30 percent after its first year. By 2020, the company says its factory will produce more lithium ion batteries in one year than the whole world produced in all of 2013.
"In cooperation with strategic battery manufacturing partners, we’re planning to build a large scale factory that will allow us to achieve economies of scale and minimize costs through innovative manufacturing, reduction of logistics waste, optimization of co-located processes and reduced overhead," Tesla said on its website.
But reducing costs that much will come at a price. The company estimates that Tesla and its partners will invest more than $4-5 billion. Tesla will chip in about $2 billion.
The factory's first production is expected to begin in 2017, around the same time Tesla begins producing its first mass-market (read: cheaper) electric car. By 2020, the factory plans to be making enough batteries to power roughly 500,000 electric cars.
Tesla is considering four sites -- in Texas, New Mexico, Arizona, and Nevada -- for the new factory.
As Bloomberg points out, the market for energy storage is set to see big growth, from $500 million to over $12 billion by 2023.