Tesla may expand stationary battery output at 'Gigafactory'

Tesla Motors has been so overwhelmed by initial demand to its new line of stationary batteries that it announced last week that it is exploring whether it can expand production at the battery Gigafactory it has under construction outside Reno.

"The response has been overwhelming, like crazy" since the stationary battery line was announced last Thursday, says CEO Elon Musk. "We're basically sold out through the middle of next year in the first week."

He says the Gigafactory had planned to make 35 gigawatts of cells and 50 gigawatts of power packs. Musk says executives are trying to figure out whether that production can be boosted 50%.

Demand is so high, Musk said on the call to discuss the company's first-quarter earnings, that the $5-billion Gigafactory could devote its entire production to stationary batteries, not the electric-car batteries that were its genesis.

"The sheer volume of demand here is staggering," he says. "We could have the entire battery plant just do stationary storage." He says stationary battery demand is likely to be twice the level of battery needs for Tesla's cars.

In the first week, he says, Tesla has received 38,000 reservations for its Powerwall home battery and 2,500 for its Powerpack.

But that actual battery demand would be much higher. Since most homes would need 1.5 to two packs, that's up to 50,000 batteries needed. Plus, he says he expects the Powerpack orders from utilities and big power users to require 10 units or more.

Musk says five to 10 more megawatt hours of production will be deployed at the industrial level compared to demand from homeowners.

He says Tesla is also being deluged with requests from dealer and distributors. "We have to triage our response to those who wan to be a distributor. It seems to have gone super viral."