Three years ago, Tesla in the Nevada desert outside Reno. That factory would eventually become Tesla's Gigafactory 1, dedicated entirely toward manufacturing batteries for the company's Model 3 cars. And this past weekend, that work finally began.
At the Midwest Renewable Energy Association's 28th Annual Energy Fair, Tesla cofounder JB Straubel that battery production at the Gigafactory was starting "right now."
The Gigafactory is the lynchpin in Tesla's plan to create an affordable Model 3. By the end of 2018—when the first Model 3s are expected to ship—the factory is expected to produce enough batteries for 500,000 cars annually. This volume is key to the Model 3's $35,000 price tag.
The new battery factory will also be used to make Tesla Powerwalls and Powerpacks, which could see a price drop as well. This would be good news for the many people purchasing or otherwise investing in new renewable energy sources.