Tesla Gigafactory plans revealed: Elon Musk gets richer by $1.1 billion

World’s most famous electric car maker, Tesla Motors announced plans for a proposed battery Gigafactory that will offer employment to a total of 6,500 people. This upcoming plant will be set up at a cost of $5 billion along with partners and battery makers, Panasonic.

Four sites for Tesla Motor’s proposed Gigafactory have been earmarked and include sites in Nevada, Arizona, New Mexico and Texas. Tesla plans on commencing construction later this year and complete the project by 2017 with an aim to supply enough batteries for 500,000 cars it plans on producing by 2020 from the Tesla Fremont, California assembly plant.

Tesla Gigafactory plans revealed (1)Tesla plans on raising $1.6 billion via a debt offering which will be channelized towards construction of the new plant and a low cost vehicle slated to go on sale at the end of 2016. The remaining investment will come in from partners at the facility with part of the investment planned immediately while the balance will come in as capacities expand over the next few years.

Following installation and commissioning of the new plant, costs of battery packs are expected to fall significantly. The company sells just one vehicle as on date, Model S Sedan which comes in at a price of $70,000. They however have plans on producing a crossover Model X later this year and are also planning a lower cost, mass market product by 2017. The new factory will allow Tesla to lower battery costs by around 30%.

Tesla Gigafactory plans revealed (2)In addition to this news, there were two more positive reports for Tesla, one from Morgan Stanley, and the other from Consumer Reports. What this did was pushed Tesla share prices up by 5%, making Tesla’s largest share holder, Elon Musk richer by more than $1.1 billion, reveals Bloomberg. Tesla has registered record increase in share price this year. They ended yesterday with 253 on NASDAQ, as compared to 35 on the same day last year.