Elon Musk is rated among the world’s modern business pioneers. After leaving South Africa, the country of his birth, he succeeded in building several disruptive businesses, placing him alongside the likes of Facebook’s Mark Zuckerberg for changing the way we live. Musk was a co-founder of PayPal before developing Tesla, the car company that has set the pace on electric vehicles, and SpaceX, a company that wants to take people to Mars. BizNews correspondent Barry Wood has been given rare access to the Tesla Gigafactory. – Jackie Cameron

Biznews’s man visits Elon Musk’s Gigabyte factory

By Barry Wood*

SPARKS, NEVADA: At Tesla’s annual general meeting June 11th Elon Musk observed that five years ago the Gigafactory didn’t exist. It was merely a vast expanse of rocks and dirt. Today it is a sprawling three-story red and grey building stretching across the desert. Its footprint equals a dozen football fields and is expected to become the world’s largest building.
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This is where half of the world’s electric vehicle batteries are produced. Tesla’s partner, Japan’s Panasonic, occupies 30% of the building. It produces the cells contained in the small lithium ion batteries, 4,000 of which are arrayed in a pan beneath the floor of every Tesla Model 3 electric car. Over 10,000 employees work here in a three-shift 24-hour operation.

Gigafactory is what South African-born Musk calls the machine that builds the machine. Density – efficient use of space – is driving down costs. Production begins on the third floor while finished panels emerge at the bottom. 1,000 car sets per day go by truck five hours to the Tesla car assembly plant near the shores of San Francisco Bay. Plant manager Chris Lister, Tesla’s vice president of operations, describes the Gigafactory as a self-contained vertically integrated manufacturing facility.

The $6bn Gigafactory is a huge roll of the dice for the 15-year-old company that has yet to register an annual profit. Many analysts and investors who have shorted Tesla stock expect the company to fail. Others, big money investors and enthusiasts, are on the other side saying Tesla is winning and leading the transition to sustainable energy.

Last year Tesla doubled the size of its fleet. But Musk and his deputies emphasise that electric cars currently account for only 1% of the world’s cars. The future, they say, is limitless.

China is a critical market for Tesla. There are more electric vehicles in China than anywhere else and Tesla is building a large new production facility in Shanghai. Another production plant is planned for Europe, its location to be announced by the end of this year.

Musk told shareholders that Tesla’s Model Y, a mid-size sport utility vehicle, will go into production next year. Both a semi-truck and a pickup – which Musk says will combine the attributes of a Ford F-150 and a Porsche 911 – are in the works.

Musk told shareholders that lowering the cost of batteries is critical and he is confident the Gigafactory will achieve that objective. The company dismisses reports that lithium is in short supply and says car sales currently exceed car production.

Having put on weight over the past year ago and looking somewhat stressed, Musk said service and charging stations are the key to sales. On both counts, he said, Tesla is winning. In some markets Tesla personnel visits owners’ homes to change tires or make minor repairs and the number of superchargers is doubling. Vehicle range, said Musk, will soon expand to 400 miles (640 km).

I traveled from the annual meeting in the Silicon Valley to Sparks, Nevada as a passenger in a friend’s Model 3. Acceleration and comfort were first class, even awesome. It is indeed a computer on wheels. But autopilot remains a work in progress. Back home on the east coast the Tesla naysayers are in control. Here on Tesla’s home ground, the enthusiasts carry the day.

• Barry D. Wood writes about the global economy from Washington. He began journalism at the Financial Mail in 1974, was the Voice of America correspondent in Prague for three years, and has been returning to southern Africa regularly since 2010.