Tesla will directly invest $2 billion into its new Gigafactory while its partners will contribute another $2 to 3 billion to the project.
The Gigafactory is designed to reduce cell costs for the American automaker’s electric vehicles and will produce more lithium-ion batteries by 2020 than were produced worldwide in 2013. The new plant will also assist Tesla in reaching its goal of producing a mass market electric vehicle in three years, one that is expected to have at least an 180-mile range and cost around $30,000.
The large-scale factory is expected to reduce the per kWh cost of Tesla’s battery packs by over 30 percent as Tesla aims for a lofty goal of producing 500,000 vehicles a year by 2020. The Gigafactory will add around 6,500 jobs with facility construction starting this year and aiming to be finished by 2015. The Gigafactory will then spend 2016 having its equipment installed before production launch begins in 2017.
Tesla also announced today that it will offer $1.6 billion in senior convertible notes to help fund the Gigafactory. In the past year, shares in the company have advanced more than sevenfold. In an announcement today, the California-based electric car maker said it will offer $800 million of notes due 2019 and $800 million due 2021.
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