Just How Big is Tesla’s Gigafactory in Texas?

Tesla stocks are one of the most valuable automobile stocks in the world despite the company being operational for only 20 years. The company was founded in 2003, and it produces electric vehicles (EVs) in the United States and China. The company produced its first EV units at its first major factory in Fremont, California.

However, as demand for their cars grew, so did the need to build new facilities. The company went on to build several gigafactories, including one in Nevada, USA, as well as in Shanghai, China, and Berlin, Germany. Tesla’s latest gigafactory is located in Austin, Texas, and also serves as the company’s headquarters after its relocation from California.  

The Austin gigafactory is one of the largest buildings in the world by surface area. Below is a detailed review of Tesla’s Gigafactory in Texas.

History

Considerations for the location of Tesla’s Gigafactory 5 began in 2019 and stretched into 2020. Several states expressed interest in hosting what would become the largest factory by size in the United States. Cities interested in hosting the factory suggested providing Tesla with tax incentives, helping them acquire land or withdrawing regulatory hurdles.

By 2020, the frontrunners were the cities of Tulsa, Oklahoma, and Austin, Texas. Tesla sent scouts to both cities in May 2020 to find locations suitable to host the massive factory. At the same time, the city of Tulsa, led by their Mayor, G. T. Bynum, began a campaign to sway Tesla’s decision in their favor. For instance, the Mayor suggested the Tulsa police department would buy Tesla cybertrucks if chosen.

The city also repainted the 75-foot Golden Driller statue to look like Elon Musk, CEO of Tesla Motors. Moreover, they painted the Tesla logo on the statue’s chest and wrote the name Tesla on its belt buckle, replacing the original belt buckle with the name Tulsa. The statue is a tribute to the oil drilling history of the city. The idea behind the repainting was to promote Tulsa as a city that supports enterprise and holds entrepreneurs in high regard. 

Factory Location

During a company earnings call on July 22, 2020, Tesla CEO Elon Musk announced that the gigafactory would be located in Austin, Texas, and that initial work on the site was underway. Musk also commended Tulsa’s efforts and stated the city would be considered for future Tesla expansion plans.

The exact location of the gigafactory is in the municipality of Del Valle, Travis County, Texas. The land is over 2,000 acres and shares its borders with the Colorado River, Tesla Road, and Texas State Highway 130. It is also close to the Austin-Bergstrom International Airport. 

Tesla chose the site near Austin, Texas, because of several incentives from the local school district and Travis County. The Del Valle Independent School District used the Texas Economic Development Act to lure Tesla to their area. The act allows school districts to lower the property taxes of a new business seeking to set up in their locality, compared to amounts paid by other property owners. 

Under the tax incentive, Tesla gets to value their gigafactory at $80 million instead of the estimated value of over $1 billion. That means Tesla will only pay a property tax of about $776,000 per year for the first ten years instead of $5 million under normal circumstances. 

On the other hand, incentives from Travis County were in the form of tax rebates. The county offered Tesla property tax rebates worth $14 million over ten years. Moreover, the incentives increase if Tesla spends more than the proposed $1.1 billion. If Tesla spends between $1.1 billion and $2 billion, it will earn a 75% tax break. If the company spends more than $2 billion, it will earn an 80% tax break. Lastly, Tesla can seek financial incentives from the state through the Texas Enterprise Fund for creating jobs in the state.

Factory Size

Tesla’s Gigafactory in Texas sits on about 2,000 acres of land. The facility has 338 million cubic feet, or 9.57 million cubic meters, of space. It is approximately the same size as 15 city blocks. The total length of the factory is 1,166 meters, making it almost a mile long. That means the factory is the largest manufacturing space in the United States by floor area. 

The factory will also get bigger as phase two goes into motion. Tesla received confirmation for expansion plans meant to expand the facility by a further 500,000 square feet.

Construction Time

Construction of Tesla’s Gigafactory in Texas began in late July 2020, with trial production starting in August 2021. The completion of the factory occurred less than two years after construction began.

The site officially opened on April 7, 2022, at an event dubbed Cyber Rodeo by Tesla CEO, Elon Musk. It was an invite-only event attended by over 1,000 guests and Tesla fans. 

Uses of the Facility

When Elon Musk announced the construction of Gigafactory 5, he said that the facility would host the production sites for the Tesla Cybertruck, Semi, Model 3, and Model Y vehicles for the Eastern half of North America. The production of the Tesla Model S would remain in Fremont, California. At the time of the announcement, the Tesla Cybertruck and the Tesla Semi were still in the developmental stages.

The construction of the factory was necessary because, at the time, the supply of the Model 3 and Model Y Tesla was not meeting the demand. Some clients had to wait between 5 and 6 months to receive their Model Y orders. Therefore, the factory would help the company meet its obligations to its clients.

During the factory launch, Elon Musk stated the facility would initially produce the Model Y hatchbacks. He further noted the Model Y production line would be the highest capacity line, capable of producing 500,000 units per year once it is at total capacity. The Tesla Cybertruck and Tesla Semi will begin production in 2023 after the finalization of their development. The facility will also host the production line for the latest version of the Tesla Roadster sports car.

The well-thought-out design of the facility will promote efficiency to ensure cars leave the production line as quickly as possible. The Tesla vehicles’ designs will also aid in hastening the production process. That is because the gigafactory workers will focus on producing three major components, namely, the front and rear portions made from two separate castings and the battery pack, which also acts as the car’s structural undercarriage. 

Minimizing the components needed in vehicle production means the production process will be faster, which benefits consumers. Fewer parts also reduce production costs meaning more people can afford to buy the car. Lastly, a vehicle with fewer components is safer because it improves its crash performance; hence, passengers are less likely to get harmed in an accident.  

Production Capacity

The current capacity of Tesla’s Gigafactory in Texas is about 250,000 Model Y units, annually. However, Tesla is yet to reach full production capacity because of supply chain constraints related to necessary vehicle components. 

However, during “Cyber Rodeo,” Elon Musk noted Tesla expects the facility to reach production of about 500,000 vehicles by the end of 2023. Production will also become more manageable as Tesla partners like CATL and Panasonic look to set up factories close to the Gigafactory. For instance, Panasonic has a deal with the state of Kansas to build a battery manufacturing facility that will be supplying batteries to Tesla. 

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