Tesla Motors, which has broken ground on a potential site in Nevada for its planned massive battery factory, said it will hold a press conference today with the state’s governor to discuss the project.
Tesla Motors has reportedly decided to place its Gigafactory battery plant in Nevada, where it has already laid a foundation, CNBC reported, citing anonymous sources.
by Eric Van Susteren –
Tesla Motors has decided to place its Gigafactory battery plant in Nevada, where it has already laid a foundation for the factory, news that was first reported by CNBC.
Tesla said via an email that the company is looking forward to joining Nevada state officials for a “major economic development announcement” Friday in Carson City at 4 p.m.
Elon Musk’s electric-car maker and the state are still negotiating specifics of the contract, CNBC reported, citing an anonymous source inside the Nevada governor’s office.
The company in July began clearing an area in in Sparks, Nev., just outside Reno. Musk had said that the company would begin work on several sites in the fives state that had been considered for the Gigafactory — California, Nevada, Arizona, New Mexico and Texas. It has not yet been confirmed whether the company will continue to develop the Sparks site or if it will pursue a different location.
While the news ends the recent competition between the five states to nab the 6,500 high-tech manufacturing jobs that the plant promises to bring, Tesla has said it must build multiple Gigafactories to meet demand for lithium-ion batteries.
California was a late entrant into the race and was considered a bit of a long shot because of its complex regulatory environment. State lawmakers attempted to push an incentives package through the legislature before the closing of its two-year session last week, but the bill stalled.
Jim Wunderman, CEO of the Bay Area Council, expressed some disappointment at Nevada beating out California for the factory.
“This can serve as a good learning opportunity for California,” he said in an emailed statement. “We should look very closely at what factors ultimately led to Tesla choosing Reno, and we should determine what we can do better going forward to attract and retain middle class jobs in California.”
Nevertheless, Wunderman said the Nevada site still promises a “robust supply chain between Reno and Tesla’s manufacturing plant in Fremont” that may support new and old businesses along that corridor.
Musk has said that the plant will cost around $5 billion once it’s completely operational and that it will comprise about 10 million square feet. Running at full capacity, the factory will produce 500,000 battery packs a year, enough to match what the entire world produces today. Musk needs the factory’s titanic economies of scale to reduce by 30 percent the cost of the lithium ion batteries its cars use.
Tesla’s sky-high production expectations are key to the company’s long-term strategy. Musk wants the company to expand from producing only $70,000 luxury vehicles and begin building enough $30,000 Model III sedans to make a dent in the market for lower-priced cars.
In order to do this, Tesla needs to build a whole lot of much cheaper batteries.
Nevada is home to the only lithium mine in the U.S. The Gigafactory will use around 25,000 metric tons of the mineral each year — around a fifth of the world’s capacity. Supplying the Gigafactory is expected to raise demand for lithium in the battery industry by about 50 percent, and demand in the overall market by 20 percent.
With the Gigafactory, Musk aims to transform the domestic manufacturing, automotive and energy industries, less than 20 years after co-founding PayPal, the online payments business that made him a billionaire and forever changed the landscape of the Internet industry.
Sarah Drake contributed to reporting this story.
Eric Van Susteren is the Digital Producer at the Silicon Valley Business Journal.