Tesla's Gigafactory ramps up to full battery production

By 2018, it'll produce as many lithium-ion cells as the rest of the world combined.

Following earlier production tests, Tesla's Gigafactory is now pumping out Powerwall 2 and Powerpack 2 energy storage products at full speed, with Model 3 cell production set to follow next quarter. By 2018, it'll produce 35 GWh of lithium-ion cells per year, "nearly as much as the rest of the entire world's battery production combined," the company wrote.

The Gigafactory, a joint venture between Tesla and Panasonic, is still less than 30 percent of its eventual 4.9 million square foot size. However, the company needs lots of batteries and needs them fast, considering that it received 400,000 pre-orders for the $35,000 Model 3. So, it's using a phased approach by starting now and expanding later, which "also allows us to learn and continuously improve our construction and operational techniques," Tesla wrote.

The company said battery cell costs will decline as much as 30 percent by 2020 as economies of scale and increased automation kicks in. At full tilt, it will produce enough for 1.5 million cars a year, about half of Ford's annual production. Despite using robots throughout the factory, Tesla and Panasonic say they'll hire several thousand local employees in 2017 alone. "At peak production, the Gigafactory will directly employ 6,500 people and indirectly create between 20,000 and 30,000 additional jobs in the surrounding area."