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Tesla Planning Expansion of Texas Plant

Business

Tesla logo at the trunk of Model X at the evening. | Image by BoJack, Shutterstock

Tesla’s Gigafactory in Texas is planning a 1.4 million square foot expansion with four new projects.

The expansion comes as the automaker filed for a little less than $776 million in projects at the Texas site, according to Reuters.

This is the largest expansion for the company since creating a $5.5 billion Gigafactory in Germany last year.

Tesla filed the projects for the site on Monday, according to the Texas Department of Licensing and Regulation.

The projects were registered by Tesla as “Cell 1,” “Drive Unit,” “Cathode,” and “Cell Test Lab.”

These new ventures by Tesla appear to be a long time coming, with Tesla filing to build the Cathode plant in February 2022, according to Travis County filings.

The Austin Business Review first reported the filings and said construction could begin at the end of the month.

“Cell 1” appears to be the most expensive of the four projects, listed as costing more than $368 million; “Cathode” is $216 million; “Drive Unit” is $85 million; and $3.7 million for the “Cell Test” building.

The purpose of the cell factory is to supplement the expansion of electric vehicle manufacturing in the United States while simultaneously decreasing its dependency on suppliers for its products.

Tesla has deals with numerous battery cell suppliers, including Panasonic.

While there is an increased demand for electric vehicles, an unintended consequence is that there is a material shortage of batteries as well as battery cells.

Tesla has delayed projects in the past few years due to shortages of batteries.

But the new cathode and cell plants have the potential to relieve Tesla of that particular problem.

In addition, Teslarati reported that Tesla is apparently planning to build drive units in Texas for its vehicles.

Tesla is further planning to build the new Cybertruck in Texas, although the battery packs will be produced at a factory in Fremont, California.

Tesla’s market returns have recently been below expectations in the stock market. The company reports from early January showed that production had dipped for the company below what was anticipated. Instead of producing an expected 431,117 vehicles, it only produced 405,278.

However, in the same period last year, the company reported more than 308,000 vehicles produced.

Reuters reported that the company will host its “investor day” on March 1 at its Austin facility. It is expected that the company will announce plans for expansion and capital allocation.

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