- For the last year or so, the story of Tesla

has been all about the Model 3 and understandably so.

Elon Musk basically staked the entire viability

of his company on being able to make

as many of these cars as possible,

and there were times where that bet looked pretty risky.

- Temporarily shutting down production.

- Way behind on the production.

- Production problems.

- See which production issues to sort out.

- Welcome to production hell.

- But now Tesla is, more or less,

beyond a lot of those challenges.

So we came out to the desert

to see the most important thing that Tesla makes,

what Elon Musk calls.

- Giant machine that builds a machine.

- This is Tesla's Gigafactory.

(upbeat funk piano music)

It's ideal for him.

It makes everything that Tesla sells:

batteries, home storage, solar panels,

and of course electric cars.

That size is truly massive too.

When it's finished, the first Gigafactory

will be the biggest building in the world by footprint,

and the second biggest by volume.

It's large enough to house 107 NFL football fields

or 93 Boeing 747s,

and currently makes about 3.5 million battery cells per day.

- [Chris] As you can see, never a dull moment here,

always a flurry of activity.

- [Sean] That's Chris Lister,

the vice president of the Gigafactory.

- We designed this Factory with first principles in mind,

making as few of moves as possible,

positioning lines as close to the loading docks as possible,

using automation to our advantage,

using gravity to our advantage.

We built this with the end in mind

of being a net-zero facility.

We'll have over 200,000 solar panels on the roof

when this is all completed.

It'd be the largest array of solar panels anywhere.

If you look at the parking lot,

that will all eventually be production space for something,

whether that's growth of Model 3,

whether that's future products,

whether that's more cell production,

whether that's energy products.

There's a ton of different options that we have

but we have the land to do it,

and we have the products to support that.

- Tesla has clear goals for a complete Gigafactory

but it's still very much under construction.

And while the company has said

it wants to finish the factory in the early 2020s,

it's easy to see that there's a lot more work to do.

You see, while Gigafactory 1 is all about the Model 3,

Tesla doesn't actually build that car here.

The building is essentially split into two parts,

part of the Gigafactory is leased to Panasonic,

who, if you didn't know,

makes the cells that Tesla uses in its battery packs.

The rest of the Gigafactory

is used to build the drive unit for the Model 3.

That's the battery pack, the electric motor,

and a few other things, like the inverter.

That all gets packaged up and shipped to California

where the cars are actually built.

(upbeat funk music)

Tesla still leans really heavily on this factory

here in Fremont California to make the Model X, S,

and assemble the 3.

In fact, every Tesla that's on the road today

comes out of this factory.

If Tesla ever wants to reach that ultimate goal

of full vertical integration,

it basically needs to move everything that happens here

into the Gigafactory.

And, frankly, there are a lot of elements of that idea

of vertical integration already happening here.

Tesla does everything from cut metal from rolls of aluminum

to stamp out pieces for the cars to making the seats,

basically everything that goes into making a car,

other than some parts of the battery,

happen inside these walls.

- [Jat] These are the batteries coming from Gigafactory.

- Oh, yeah. - Right?

They come in on a rack that is designed for automation,

and it gets placed onto this

and gets transferred over through the FlexDecks.

- [Sean] That's Jat Dhillon,

who's the head of manufacturing for the Model 3.

- So automation, we're looking for everything.

We obviously want to improve efficiencies across the board.

We take, in fact, ergonomics as well.

Any of the areas where you have a lot of complexity

around getting to certain fasteners,

we want to be able to automate those cells

because that does create ergo challenges

for the production staff.

For Model 3, we chose to go highly automated

but when you go with advanced automation like this,

it can be really good benefit if it works out

but there are times when you can overdo it

and have too much automation.

(upbeat music)

- [Sean] Tesla didn't have the right balance

when it first started making the Model 3,

and that turned into one of the biggest challenges

the company faced when it was building that car.

In theory, building the Gigafactory from the ground up

was supposed to give Tesla the freedom

to draw the perfect factory from scratch

but the delays in Model 3 production show

that even Tesla doesn't get everything right

in the first draft.

that's potentially concerning considering the company needs

to make many more Gigafactories

if it wants to fulfill its mission:

accelerating the world's transition to sustainable energy.

- We can declare victory

when every single car on the road is a Tesla,

and we can declare victory when every home

has Powerwalls and a solar roof that we've made.

We'll continue to build out.

We'll continue to expand into other markets,

whether that be Asia, whether that be Europe,

whether that be just different parts of the world

that we've not been able to touch up to this point.

- Tesla's going to need way more Gigafactories,

and it's already working on that.

Gigafactory 2 is in Buffalo, New York,

and is completely dedicated to the company's solar products.

The real expansion starts in China.

Musk and Tesla recently signed a lease

to build a third Gigafactory outside of Shanghai.

China is the world's biggest market for electric cars

on pace to sell around one million of them in 2018 alone.

And while Tesla already has some success

in China selling its cars there,

building them and selling them locally

will help them work around problems,

like soaring tariffs as a result of the ongoing trade war.

The same ideas apply to Europe

where Tesla's fourth Gigafactory is likely to wind up.

And beyond, Musk has said he wants

a dozen or more Gigafactories around the world.

These are all very high ambitions

but Tesla still has a long way to go

and there are definite growing pains

as the company scales towards Musk's grand vision.

(upbeat guitar music)

The Gigafactory is many things:

It's impressive.

It's kind of awe-inspiring.

It's definitely enormous.

But there's only a couple things happening there.

Tesla's only making a few of its products

in that gigantic building.

That said, maybe that doesn't matter right now,

Tesla has bought itself some breathing room

by getting Model 3 production onto relatively solid ground,

but there are many other products in the Tesla pipeline,

like the Model Y SUV, the Tesla Pickup, the semi truck,

and the second-generation Roadster,

so the idea of the Gigafactory is crucial to the company

in a much bigger way than any of those individual products.

(upbeat funk pop music)

Thanks for watching.

We spent a couple days in the Gigafactory,

so if you have any questions about what we saw there

or what's going on with Tesla,

ask in the comments below

and we'll try to get to your question.

And if you haven't, be sure to like and subscribe.