By: Christian Okolski
Back in winter, this blog reported on Tesla Motors’ plan to build a massive “gigafactory” to produce large volumes of electric vehicle batteries. Ultimately, the gigafactory is expected to be completed and operational in 2017 and, as production ramps up, have the capacity to supply 500,000 electric vehicles with batteries by 2020. While Tesla still needs to select a site for the facility before beginning construction, Silicon Valley’s reporting shows that a decision on that front is looming.
The most compelling piece of news regarding the site selection is that Tesla has already broken ground on and begun excavating a potential location in Reno, Nevada. Reno seems to be a frontrunner in the selection process due to its lack of any corporate income tax, personal income tax, or inventory tax. In addition, the potential Reno location is suitable for on-site power generation from three different renewable energy sources, including wind, solar, and geothermal. Despite the good prospects for the Reno location though, Tesla wants the winning state to contribute 10% of the $4-5 billion project cost, and as the Reno Gazette-Journal has reported, Nevada may need to convene a special legislative session to muster those funds. As Nevada figures out an incentives package though, conversations between Tesla and other states are continuing “behind closed doors”.
Still in the running to be home of the gigafactory are Arizona, California, New Mexico, and Texas, and the competition among those states is reportedly fierce. Tesla’s new battery plant is expected to employ approximately 6,500 people with, a plethora of well-paying, skilled manufacturing jobs that would provide a significant boost to a local and even state economy. In fact, USA Today has made it known that in a recent conference call with Wall Street analysts, Tesla CEO Elon Musk said that site evaluations similar to the one taking place in Reno will also be conducted in “one or two other states”. Tesla’s gigafactory business is so desired that in California, two state senators are actually sponsoring new legislation that would give special, currently unavailable incentives to the electric vehicle maker.
If Tesla wants to build a $5 billion, 10 million square foot battery plant on a 500-1000 acre site in time for 2017, it surely wants to select its location as soon as possible. Although Reno may be the frontrunner in the Tesla gigafactory sweepstakes, and there seem to several compelling reasons for it, the decision clearly has not been set in stone. Either the Reno location still needs to be investigated further, or other options in Arizona, California, New Mexico, or Texas are seen as being potentially more compelling, or both cases currently hold true. Regardless, Tesla is closing in on finding a home for its unprecedented gigafactory and seems likely to make a decision in the not so distant future.