Dive Brief:
- A major battery energy storage deal with Southern California Edison is pushing Tesla to ramp up production at its partially-completed Gigafactory by the end of this year, the Las Vegas Review-Journal reports.
- The factory, already under pressure to increase production of lithium-ion batteries for Tesla's Model 3 electric vehicles, is also producing Tesla's Powerwall and Powerpack batteries. Under the SCE deal, Tesla will provide a 20 MW (80 MWh) battery storage system for one of its substations, which will be produced in the Gigafactory.
- Tesla spokesman Daniel Witt told the news outlet there is a "one-to-one correlation between the growth of energy storage products and the growth of the Gigafactory project.” Only 14% of the factory has been completed so far, and full operation is not expected until 2020.
Dive Insight:
There's a lot riding on Tesla's Gigafactory, and this week the company confirmed that it is pushing up the operational deadline for the facility, spurred by the signing of a large-scale energy storage project with SCE.
When that contract was unveiled, Tesla officials wrote in their statement that the Gigafactory would allow the system to be manufactured and installed in three months — a hefty task, considering less than a fifth of the factory is completed. 16% of the factory is currently under development, Witt said.
Tesla generated consumer excitement when it unveiled its residential Powerwall battery last year, but executives always said their grid-scale batteries would have a greater impact on the power sector as a whole.
One of the first early examples was when SolarCity announced it will use Tesla batteries to store power for the nation's first fully-dispatchabe utility-scale solar facility in Hawaii, signaling a future where long-duration batteries could be used to store renewable generation for later hours. SCE's latest contract with Tesla builds on that expectation.
The company is also preparing to unveil a new product next month with SolarCity, a "solar roof" which would use the Powerwall 2.0 systems.
The Model 3 is billed as Tesla's affordable electric vehicle option, with a base price of $35,000 and a range of more than 200 miles. Deliveries are planned for December 2017, and the company has almost 400,000 orders.
