Gigla Factory

In: Business and Management

Submitted By arinb91202
Words 469
Pages 2
Executive Summary

The paper regards the construction of a gigafactory by Tesla Motors. The gigafactory will be at a cost of $5 billion and will be operational in 2020. Importantly, the gigafactory will reduce the costs of the electric cars produced by the firm by 30%. This will increase the marketability of the vehicle to a broader market. The paper will seek to undertake an analysis of the demand and supply of electric cars as well as the price elasticity of electric cars. Hence, the paper will conclude with an evaluation of the viability of the construction of the plant.

Table of Contents
Executive Summary 2
Construction Of Gigafactory For Tesla 4
Purpose 4
Methodology 5
Results 5
Conclusion 5
References 5

Construction Of Gigafactory For Tesla

Tesla Motors has selected Storey County, Nevada, as the location of the construction of its gigafactory. The gigafactory us set to be operational by 2020 and will be highly significant in the reduction of the production costs of Tesla by 30%. Given the current pricing of the vehicles produced by the firm such as the Model S, which priced at $69,900 would drop to $48,930. This is a significant drop and will be essential towards the launch of future models by Tesla such as the Tesla Model 3. The Tesla Model 3 will be priced at $35,000 to $40,000. The model will be launched in 2017 and thus, on the full launch of the gigafactory the model will cost $24,500 to $28,000. The lower pricing of Tesla models is quite integral to the increasing penetration of electric cars produced by the firm. Currently, electric cars face challenges in penetrating the car market. This is due to the high cost of the vehicles as well as the limited range of travel. Despite…...

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