American electric vehicle manufacturer Tesla and Panasonic have begun mass production of lithium-ion battery cells at the Gigafactory. These battery cells will be used in Tesla’s energy storage products and Model 3.

The high performance cylindrical ‘2170 cell’ was jointly designed and engineered by Tesla and Panasonic to offer the best performance at the lowest production cost in an optimal form factor for both electric vehicles and energy products.

Production of 2170 cells for qualification started in December 2016 and today, production begins on cells that will be used in Tesla’s Powerwall 2 and Powerpack 2 energy products. Model 3 cell production will follow in Q2 and by 2018, the Gigafactory will produce 35 GWh/year of lithium-ion battery cells, nearly as much as the rest of the entire world’s battery production combined.

According to a statement from Tesla, the Gigafactory is being built in phases so that Tesla, Panasonic, and other partners can begin manufacturing immediately inside the finished sections and continue to expand thereafter.

“Our phased approach also allows us to learn and continuously improve our construction and operational techniques as we continue to drive down the cost of energy storage. Already, the current structure has a footprint of 1.9 million square feet, which houses 4.9 million square feet of operational space across several floors. And we are still less than 30 percent done. Once complete, we expect the Gigafactory to be the biggest building in the world,” says Tesla.

“With the Gigafactory online and ramping up production, our cost of battery cells will significantly decline due to increasing automation and process design to enhance yield, lowered capital investment per Wh of production, the simple optimization of locating most manufacturing processes under one roof, and economies of scale. By bringing down the cost of batteries, we can make our products available to more and more people, allowing us to make the biggest possible impact on transitioning the world to sustainable energy,” the company statement adds.

In what will gladden US president-elect Donald Trump, Tesla says manufacturing battery cells in the U.S. “creates thousands of American jobs. In 2017 alone, Tesla and Panasonic will hire several thousand local employees and at peak production, the Gigafactory will directly employ 6,500 people and indirectly create between 20,000 to 30,000 additional jobs in the surrounding regions.”

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