Tesla Motors plots 'gigafactory' for electric vehicle energy storage batteries

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Electric car maker Tesla Motors Inc. is looking to raise funds for a 10 million square-foot, $5 billion "gigafactory" that would produce energy storage batteries for electric vehicles.

The Palo Alto, California-based business said such a factory would enable it to take its vehicle production from 24,000 electric cars last year to more than 100,000 by 2018.

The company is reportedly scouting locations in New Mexico, Arizona, Nevada and Texas, but Tesla would not comment on whether any official negotiations have yet started.

Key to the cost-effectiveness of the plan is scale, according to Tesla. The scale of production at the factory would be large enough to push down the cost of lithium ion battery production by about 30 percent.

The factory could support as many as 6,500 jobs. Tesla said February 26 that it plans to sell about $1.6 billion in convertible notes to help finance the project, which could cost as much as $5 billion total to construct.

Tesla co-founder Elon Musk said the factory would transform Tesla into an energy storage company, which would offer benefits to SolarCity Corp., a solar energy company for which Musk is chairman and co-founder.

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