Tesla Motors Inc. will manufacture the electric motors and gearboxes for the upcoming Model 3 at its Gigafactory in Nevada.
During his State of the State address Tuesday night, Nevada Gov. Brian Sandoval said the electric automaker will invest an additional $350 million and add 550 jobs to expand its production capabilities at the plant.
Tesla has already invested $5 billion in the factory -- which is expected to be more than 10 million square feet -- and began producing lithium ion battery cells on Jan. 4. Construction has yet to be completed, though about 5 million square feet have been built. The factory currently employs more than 1,000 full-time employees and 2,000 construction workers, according to Sandoval.
The factory is expected to reach full capacity by 2018 and produce more batteries annually than were manufactured globally in 2013.
The Gigafactory is a vital component of Tesla’s strategy to become a large-scale vehicle manufacturer, producing 500,000 vehicles annually by 2018. By mass-producing its own battery cells, the company plans to reduce production costs for the $35,000 Model 3, which is expected to roll off the line by the end of this year.
After Tesla hosted analysts at the Gigafactory earlier this month, Barclays analyst Brian Johnson wrote in a note to investors that the automaker seemed on track to achieve the manufacturing efficiency it had originally planned with the facility. However, he added that “as there is more complexity, it increases the execution risk.”