Tesla made a splash last week with its proposed $5 billion “Gigafactory” and its eye-popping numbers: a 10 million square foot facility on an entire land area of 500-1,000 acres, with output of 35 GWh/year of battery cells and 50 GWh/year of battery packs by 2020. That’ll be enough to support 500,000 of the company’s forthcoming Gen-3 vehicles, compared with a little over 20,000 annual demand for its cars today. By comparison, the entire lithium-ion battery supply-chain produced about 34 GWh in 2013, the vast amount going not to electric vehicles but consumer electronics.
That’s a very big bet on future demand, so it makes sense for Tesla to have other plans in case the market doesn’t quite take off and it’s stuck with overcapacity. The answer: allocate some of that capacity to stationary energy storage systems for backup power, peak demand reduction, demand response, and wholesale electric market services. Speaking at a California Public Utilities Commission thought-leader panel, Musk reiterated that an unspecified amount of Gigafactory’s capacity will be earmarked for “large-scale use of stationary storage.” Since last year Tesla has been contributing batteries to SolarCity for incorporation into solar + energy storage systems for both residential and commercial customers. (Expansion of solar and wind, Musk added, is causing “strife” for existing utilities.)