Tesla accelerates construction on $5B gigafactory to meet Model 3 demand

Dive Brief:

Officials at electric car manufacturer Tesla have announced an acceleration of the original construction timeline for its $5 billion battery gigafactory in Reno, NV, and they project that the facility will be complete in early 2017, years ahead of schedule, The Wall Street Journal reported.
In an attempt to start battery production on a scale that will meet the production demands of its new Model 3 sedan by the end of this year, the company has increased its construction workforce to 1,000 with double shifts running seven days a week.
The factory is currently only 20% complete, but the company expects to produce 105 gigawatt hours of battery cells by 2020, enough to operate 1.2 million Model S sedans.

Dive Insight:

Even though the company's primary focus seems to be getting car battery production underway, it is already manufacturing battery packs for its power storage business. Key to the construction of the factory is its solar-paneled roof, which onlookers expect to be supplied by SolarCity. Earlier this month, Tesla proposed a potential $2.8 billion Tesla-SolarCity merger.

Tesla will hold a grand opening of sorts later this month at the gigafactory despite the significant amount of work yet to be done. The company had also announced that it raised $1.7 billion to get the factory up and running faster in the face of an estimated 500,000 reservations for the Model 3 by 2018.

The increase in labor is sure to intensify the local building trade union's monitoring of the company's use of local labor. In March, construction workers walked off the project in protest after they said a Tesla contractor was bringing non-local workers onto the job in defiance of a promise the company made to use at least 50% Nevadans for all construction in exchange for tax incentives. The workers eventually returned to the site but vowed to keep an eye on Tesla's hiring practices.

The gigafactory has spurred local and state economic development for Nevada. County business licenses are up 41%, most of which are construction-related, and state officials have said they no longer need to court new businesses into Nevada. Tesla, which is acting as its own contractor on the gigafactory, has also made a point of incorporating the latest green technology into the project and said the completed building will be net-zero.