Inside the $5 billion Gigafactory that will decide Tesla's fate

To get to Tesla's Gigafactory, you drive east from Reno, Nevada, turn into a sprawling industrial centre, and make a left on Electric Avenue. The high desert landscape dwarfs everything, even the vast white building with the red stripe along the top. As you reach the gate with the security guard, the breadth of Tesla's ambitions becomes clear. Even the name itself suggests more to come: Gigafactory 1.

The lobby decor is classic Tesla: large windows, high ceilings, gleaming white floors, black leather chairs. One of the Powerwall home batteries made at the factory hangs like a piece of modern art. Guests receive hard hats, reflective vests, and safety glasses along with the complimentary bottled water and coffee.

The $5 billion Gigafactory was born of necessity. Tesla needs a hell of a lot of batteries, for both the forthcoming mass-market Model 3 sedan and the Tesla Energy product line. The timeline for getting those batteries made just became much shorter, too. On Wednesday, Tesla Chief Executive Elon Musk stunned investors by announcing a sped-up production schedule that calls for a half-million electric vehicles per year by 2018, not the previously stated goal of 2020. For a company that delivered just 50,658 vehicles in 2015, the ramp looks like a hockey stick.

Tesla has worked with Panasonic to collapse the supply chain and drive down costs. Battery production - all the way down to the cell level - will happen in one facility. Conference rooms are named after chemical elements that are key parts of the battery supply chain, including lithium, cobalt, nickel, aluminum and silicon.

Powerwall batteries for the home and the larger Powerpack for commercial users are already made at the Gigafactory. Eventually battery packs for the Model 3 will be made there as well and then shipped by rail to Tesla's factory in Fremont, California. About 350 Tesla employees currently work inside the facility.

"We've accelerated some of our plans there," Tesla Chief Technology Officer JB Straubel said of the Gigafactory during Wednesday's earnings call. "And we're still on track to have first cell production starting at the end of this year so that we'll be able to ramp up to match the Model 3 schedule as well."

The place remains a very active construction site, filled with contractors, cranes, and pickup trucks. The factory is being built in sections and is now only 14 per cent complete. Ninety per cent of the interior space is under construction.

A lot will change in the coming months. Interior rooms are being prepared to handle raw materials. Tesla Energy products are produced on what's called the "pod line." It has the startup vibe: rows of desks, plenty of whiteboards.

The completed structure will have a footprint of 5.8 million square feet, roughly the size of 100 football fields. Inside, however, will be at least twice as much floor space because some sections will stand four storeys tall. Tesla has also purchased land around the site for potential expansion. Eventually the entire roof will be filled with fixed-tilt solar panels.

Tesla says that the Gigafactory is designed to reduce battery costs by at least 30 per cent, with capacity to produce 35 gigawatt-hours of battery cells and 50 gigawatt-hours of battery packs per year.

Straubel said the Gigafactory will be able to exceed those targets even before it expands. "We won't need to rob from Tesla Energy plans in order to meet the Model 3 schedule," he told investors. "We definitely have a way to solve both."