Tesla's entire future depends on the Gigafactory 🚗🔋🏗  July 29th 2016

When you find yourself in the middle of the Nevada desert, on a 100-degree day, you wonder: who in the world would build something here? Elon Musk, of course. And so I’m here in the city of Sparks, outside of Reno, because of Musk’s dream — his "Master Plan" for Tesla, to be specific. He’s staked his entire company (and much of his net worth) on a single, enormous building here: the Gigafactory.

Tesla's Gigafactory is perhaps the best example of the literal scale of Elon Musk's ambitions. When the factory is complete, it will be the largest building in the world by footprint and, if all goes according to plan, will eventually churn out enough batteries to supply 150 gigawatt hours of batteries per year. That's enough for 1.5 million Model 3s. Tesla hopes to build 35GWh of batteries per year by 2018, equivalent to 500,000 Model 3s.

It's official: The pencils are down. Elon Musk told a roomful of reporters on Tuesday that the final designs for Tesla's $35,000 electric Model 3 were locked up two weeks ago, and the company is moving forward on schedule to start producing them next summer. That was just the beginning.

Here are eight big takeaways from a tour of the Gigafactory and a Q&A session with Musk, Chief Technology Officer J.B. Straubel, and Panasonic executive Yoshihiko Yamada.

The first Gigafactory battery cells will be used in Tesla Energy products, but they will soon after make their way in vehicle battery packs. But the battery packs at the factory will feature a new architecture. Even though the battery cells themselves will be bigger than the ones currently used (18650 to 20700), the battery packs will be smaller thanks to better packaging and cooling.

At the Gigafactory event yesterday, Elon Musk said that the first vehicle battery packs will come out of the factory in about 6 months and will be used as development battery pack for the Model 3. In 8 to 9 months, battery packs for the Model S and X will also rollout for validation and for production in the following months.

At a special media event for the opening of the Tesla Gigafactory today, CEO Elon Musk made a few comments about the upcoming Model 3. He confirmed the pencil down on the design as reported two weeks ago, and he also elaborated on its financial sustainability as a vehicle program.

With already over 373,000 reservations (Tesla hasn’t updated this number in a while), the vehicle already proves to be in demand, but industry analysts want to know if Tesla can make money selling them in order to finance its other ambitious goals, like a pickup truck and ‘Tesla Semi‘.

Musk said that once at full production, he expects the Model 3 to generate around $20 billion in revenue per year for Tesla with $5 billion in gross profit (or 25% gross margin). It adds up to roughly 500,000 cars per year at a $40,000 price tag.