Tesla expands search for U.S. battery factory: CEO

DETROIT Tue Jun 3, 2014 5:54pm EDT

Elon Musk, CEO of Tesla Motors, waves during a news conference to mark the company's delivery of the first batch of electric cars to Chinese customers in Beijing April 22, 2014. REUTERS/Stringer

Elon Musk, CEO of Tesla Motors, waves during a news conference to mark the company's delivery of the first batch of electric cars to Chinese customers in Beijing April 22, 2014.

Credit: Reuters/Stringer

Related Topics

DETROIT (Reuters) - Tesla Motors Inc (TSLA.O) is now looking at three sites, instead of two, to begin construction for its lithium-ion battery plant in the United States, Chief Executive Elon Musk said on Tuesday.

The leading U.S. electric car maker expects to trim from five the number of states from which it is choosing to build its battery plant, dubbed the "gigafactory," but a decision on the final site will not come before year end.

"We're probably going to do two or maybe three states all the way to creating a foundation and completing the plans and getting approval," Musk told shareholders at the company's annual meeting in Mountain View, California. "It might actually be three states we do it in."

Tesla previously said it would pick two winners from among Nevada, Arizona, New Mexico, Texas and California and start developing the sites simultaneously to minimize risk of delays after groundbreaking. Analysts have said Tesla needs to finalize plans for the plant soon if it wants to meet its 2017 production target.

Musk, who reaffirmed he will remain CEO of Tesla at least another four or five years through the production of a high-volume car dubbed Gen 3, said the company was "quite advanced" in its planning for the battery plant. He said the gigafactory is being developed in conjunction with the third-generation car, which will cost about $35,000 and hit the market in late 2016.

The plant is meant to produce the batteries in high volumes at lower costs as a way to help the company drive down the price of the Gen 3 car. Musk said he was optimistic the company could do better than its 30 percent target on cost reduction and supplier partner Panasonic Corp (6752.T) was also convinced.

Panasonic previously said it expected to be the sole manufacturer in Tesla's gigafactory.

Musk added that a next-generation roadster model was probably five years away.

After the Gen 3 car, Musk said it made sense for Tesla to look at building electric trucks and probably a vehicle that would cost less than $35,000.

Musk also said Tesla was expanding its relationship with contract manufacturer Foxconn, which is listed on the Taiwan stock market under the name Hon Hai (2317.TW). He said potential alliances with companies like Foxconn could allow Tesla to expand production faster.

A company spokeswoman declined to outline Tesla's relationship with Foxconn.

Musk also said Tesla is making progress on developing self-driving technology for its cars, and added he was confident that within a year, the automotive industry will allow drivers to go from highway on-ramp to exit without touching any vehicle controls.

(Editing by Matthew Lewis)

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (3)
AZWarrior wrote:
Just one question needs to be answered by Tesla fans: If Tesla didn’t sell the government alternative energy credits, could they have ever made a profit? The numbers say not only no, but it appears that same is true for the foreseeable future.

Jun 03, 2014 12:08am EDT  --  Report as abuse
fwupow wrote:
Driverless Teslas; “On-ramp to exit without touching the controls” huh? Gotta wonder how a computer will deal with all the shenanigans that human drivers like to pull. For example human drivers like to do this A-hole move where they stay out in the left lane and then if they see someone approaching from behind and moving over to pass on the right, they jerk over into the right lane without signaling and cut-off the would-be passer. It’s illegal to do and in the event of an accident, they’d be at fault but who knows if they understand that or not. You’re gonna have the people who are scared of what the robot car is doing and the aggressors who aren’t satisfied with the effort the robot car is making to ram-rod it’s way to the front of everything.

Jun 04, 2014 2:03am EDT  --  Report as abuse
fwupow wrote:
The title photo is clearly a guy wearing an Elon Musk face mask and not the actual Elon Musk.

Jun 04, 2014 3:14am EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.