Tesla Motors announced on Friday that it will be expanding its partnership with the U.S. Department of Defense to acquire the maker of the world’s first self-driving car.
The automaker plans to build a factory in Reno, Nevada, to make the new Model 3, and will soon open a second factory in Fremont, California.
Tesla says the first Model 3 will be in production by 2019.
The company also says that its new Gigafactory will produce 2.3 million Model 3 cars a year, and that the first batch of 200 vehicles will be delivered by 2019, and the second batch by 2021.
The Model 3 is expected to have a range of 350 miles, and be able to drive up to 90 miles on a single charge.
In its announcement, Tesla said it has reached an agreement with the Department of Veterans Affairs to provide $1.5 billion in loans, which will be used to fund a new $1 billion research and development center at the Gigafoundr facility.
The new facility is expected in 2020.
“The new investment in the Gigavillage is a critical step towards unlocking new manufacturing opportunities in Nevada,” the company said in a statement.
“Tesla is also excited to partner with the government to support the expansion of the Gigawebsite, and support the development of the next generation of Model 3.”
Tesla said that the Gigarefactory would “enable the company to significantly expand production of Model S, Model X, and Model 3 in Nevada.”
Tesla also said that it would be investing $1 million in a startup called Autodesk that will be building “the first commercial drone aircraft to take off and land vertically from the ground.”
Tesla says that the company plans to begin selling the Model 3 and Model X cars by the end of the year.
The automaker also announced that it is creating a new business unit, the Tesla Gigafundry, which it says will focus on “the design, manufacturing, distribution, and delivery of the Tesla Model S and Model III.”
The new business will also focus on research, manufacturing and distribution of the company’s electric vehicles, and it will also create and oversee a joint venture to build the first production battery for a self-balancing electric vehicle.
Tesla’s acquisition of Gigafindre will also allow the company “to expand the global footprint of Tesla’s automotive manufacturing operations, as well as accelerate its development of new and innovative products and services,” the automaker said in the announcement.
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