Despite giving tours to press and customers in the past few weeks, many details about developments at Tesla Motors and Panasonic’s “gigafactory” near Reno are still murky, and little light was shed by Elon Musk in Tesla’s Q2 results.
In a letter to shareholders, Chairman and CEO Musk and Chief Financial Officer Jason Wheeler stated that construction of the gigafactory remains “on target” to supply batteries for roll-out of the company’s Model 3 beginning in July of next year. Model 3 is billed as Tesla’s first mass-market electric car, with an expected sale price of only $35,000, less than half that of its Model S.
Musk and Wheeler further note that the company invested $295 million in capital during the quarter, in part to accelerate construction of the factory. Under new timelines the company expects to reach a rate of 35 gigawatts per year of lithium ion cell production in 2018, which it says will meet the needs of an “accelerated” Model 3 production plan.
There is clearly still a long way to go. In May Bloomberg reported that the factory was only 14% complete, with 90% of the interior space under construction. In a late July factory tour, Electrek reported that only three of the 16 blocks in the 5.5 million square foot factory were completed, but press reports from the factory also indicate that tools have been installed.
When complete the gigafactory will be the second-largest factory of any kind in the world, and will dramatically increase the global output of lithium-ion batteries.
As if building the world’s largest battery factory were not enough, Tesla is also attempting to purchase SolarCity, while continuing to post heavy losses and growing rapidly. During Q2 the company increased revenue by a third year-over-year to $1.27 billion, but also reported a -18% operating margin and a net loss of $293 million. This bring Tesla’s H1 loss to a staggering $575 million.
Tesla currently holds $9.3 billion in liabilities versus $11.9 billion in assets, and reports $2.5 billion in stockholder equity.