Tesla Motors will be adding electric motors and gearbox components to its lithium-ion battery Gigafactory in Nevada, for an additional $350 million investment that will create 550 more jobs at the plant.

That move was announced last night by Nevada Governor Brian Sandoval during his State of the State Speech. He praised the automaker for “doubling down” on its commitment economic growth in Nevada.

Adding drive system production lines to the factory will add these 550 new jobs to build motors and components for the upcoming Model 3. Tesla has already employed 1,000 workers at the battery plant, and is temporarily employing another 2,000 construction workers who are expanding the site. The site is about one third completed so far, and will have more than 10 million square feet of operational space available upon completion.

Electrek had already reported that Tesla was showing signs of doing more than making batteries at the Gigafactory. The company’s vice president of engineering for drive systems had become involved in the manufacturing process at the Nevada plant, and had posted new job announcements indicating it would be more than batteries. Last night, Tesla confirmed what Governor Sandoval had announced, and that Model 3 drive unit production will be carried out in Nevada.


Both batteries and drive components made at the Gigafactory will be shipped about 250 miles to the Fremont, Calif., factory, where the Model 3 sedan is being assembled along with the Model S and Model X.

Tesla had committed to Nevada that it would be bringing 6,500 employees to Gigafactory. Making that commitment has been part of the nearly $1.4 billion tax incentives package approved by the state in 2014.

That may eventually go up to 10,000 employees, CEO Elon Musk has said. The company recently commented on a plan to increase capacity for its batteries from 50 GWh to 150 GWh to support its ambitious strategy to manufacture 500,000 vehicles annually by 2018.

Hitting that hefty 500,000 vehicle goal may need more space at the Nevada plant or elsewhere. Last year the company built and shipped about 76,230 cars from the Fremont plant – falling just short of its 80,000 target for the year.

Located in Sparks, Nev., near Reno, the Gigafactory has additional land to expand the plant, if needed.

During his speech last night, Governor Sandoval said that Model 3 production “has filled” the Fremont factory, which caused Tesla to move its drive unit production over to Nevada.

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The electric automaker also has production capacity available in Europe, with plans to add more. Tesla currently has a Netherlands assembly plant in operation.

During a trip to Germany in November to announce the acquisition of a German engineering group, Grohmann Engineering, Musk also confirmed that Tesla plans to choose a location for “Gigafactory 2” in Europe. That will go forward during 2017, he said, adding that the factory would be producing both batteries and cars.

Yesterday’s announcement followed right after news that Tesla and its partner Panasonic had started battery cell production at the Gigafactory earlier this month. Tesla is also using space at the Nevada plant to ramp up production of the second generation Tesla Energy products, the Powerwall 2 and Powerpack 2.