A giant factory intended to manufacture car batteries and equipment in huge quantities

What is a gigafactory ?

A gigafactory is the contraction of two terms:

  • Giga: used as a prefix to a unit of measurement, with a gigawatt corresponding to a billion watts ;
  • and the English word factory.

In French, they are known as "giga-fabriques".

The gigafactory concept was used for the first time in 2014 by Tesla. It referred to the constructor's giant factory designed to achieve economies of scale in the production of its electric cars.

By extension, today a gigafactory refers to any factory aiming to produce equipment, batteries or other components in very large volumes.

The characteristics of a gigafactory

A gigafactory is:

  • a large factory ;
  • intended to concentrate the production of batteries and components over one site ;
  • in order to achieve economies of scale
  • and reduce losses through process innovation and optimisation carried out under one roof.

The reduction in production costs is a strategic point in the production of electric vehicles. The challenge largely rests on lowering the costs of producing batteries which significantly increase the sale price of vehicles.

By reducing the cost of the batteries, car constructors look to make their vehicles more accessible and accelerate the energy transition in transport.

Examples and application

The Tesla group's gigafactories

To date, Tesla operates 3 giant factories:

  • Gigafactory 1 (or Tesla Giga Nevada) is located a few kilometres from Sparks, in Nevada (in the United States). It has produced lithium-ion batteries since January 2017.
  • Gigafactory 2 (or Tesla Giga New York) is based in Buffalo in the State of New York. In partnership with Panasonic, it produces and assembles aesthetic photovoltaic cells in the form of slates.
  • Gigafactory 3 (or Tesla Giga Shanghai) is the first Tesla gigafactory to be installed abroad. Built close to Shanghai, in China, this giant factory delivered its first Tesla Model 3 cars in late 2019, less than one year after the construction of the factory.

Tesla is currently developing two gigafactory projects:

  • Gigafactory 4 (or Tesla Giga Berlin) will be the first giant Tesla factory to be located in Europe, in Grünheide south-east of Berlin. The construction of this gigafactory was approved in March 2022. Tesla is ultimately aiming for a production capacity of 500 000 electric vehicles per year, with a workforce of 12 000 people ;
  • Gigafactory 5 (or Tesla Giga Texas) is currently being built in Texas. The aim is for this to be the brand's main production centre with a workforce of 15 000 people.

Other gigafactory examples

In Europe

In Sweden, in 2015, two former Tesla executives founded a start-up intended to produce lithium-ion batteries on a large scale, notably for the European car market. Now known as Northvolt, the company spearheaded a first gigafactory built in Skellefteå, a city in north Sweden.

BMW and Volkswagen contributed to this project financially. The first batteries could be delivered in December 2021. Following an agreement with Volkswagen, a second giant factory will be opened in Salzgitter, in Germany. A third gigafactory project is expected to open in the next few years in association with Volvo Car.

In France

Tesla is currently developing a gigafactory project in France. Based in Grenoble, the company Verkor aims to produce "made in France" batteries to equip 300 000 cars. Initially, it is aiming for a production capacity of 16 GWh, with a target of 40-50 GWh by 2030. Production in France with mostly decarbonised energy should allow for a CO2 footprint 3 to 4 times smaller than that produced with a Chinese battery.

French car constructors are also developing their own gigafactories to produce batteries for their electric vehicles:

  • a Stellantis gigafactory project based on Douvrin, close to Béthune (Hauts-de-France) is being driven by the ACC joint venture between PSA and Opel and Saft, a subsidiary of the Total Énergies group. A minimum production capacity of 24 GWh is planned for 2028-2030 ;
  • a gigafactory project was formalised by Renault in 2021 for annual production of 9 GWh by 2024 with a capacity of 24 GWh by 2030.

Tesla's gigafactory 1 in numbers

  • 30% complete, Tesla's Gigafactory 1 currently has a floor area of 180 000 m².
    • It houses 492 000 m² of operational facilities distributed over several levels.
  • At the end of 2018, this gigafactory was able to produce the annual equivalent of 35 GWh of batteries, which represents the largest volumes produced in the world.

Regulatory framework

Not applicable