Electric Vehicles

Tesla Chooses Nevada for Gigafactory

September 05, 2014

Photo via Wikimedia.
Photo via Wikimedia.

Tesla Motors has chosen Nevada for its $5 billion Gigafactory in a deal that will likely lead to a lower-priced Tesla vehicles and 6,500 new jobs to the Reno area. Tesla’s CEO Elon Musk and Nevada’s Gov. Brian Sandoval announced the deal Sept. 4.

The new factory will increase the production of the long range battery packs and ultimately bring down the cost of the electric vehicles, according to Tesla. The Gigafactory is planned to produce 35GWh of cells and 50GWh of packs per year by 2020.

“The Gigafactory represents a fundamental change in the way large scale battery production can be realized. Not only does the Gigafactory enable capacity for the Model 3 but it sets the path for a dramatic reduction in the cost of energy storage across a broad range of applications,” said J.B. Straubel, Tesla's chief technical officer and co-founder.

After signing an agreement with Panasonic in late July, five states were selected as potential site locations. Nevada, California, Arizona, New Mexico and Texas jumped at the opportunity to bring the lithium-ion battery plant to their state. Last minute legislation and special incentive packages were thrown out to Tesla before the final decision was made.

Musk revealed yesterday that Nevada’s incentive package was not the largest out of the five competing states that were finalists for the plant. Nevada’s package of tax breaks and credits were estimated around $1.3 billion over the next 20 years, according to state officials. Although talks between potential states and Tesla were kept quiet, Tesla broke ground at an industrial park east of Reno prior to its final site choice. Reno is around four hours away from Tesla’s headquarters in Palo Alto, Calif and its assembly plant in Fremont Calif.

The Gigafactory is expected to bring the state $100 billion in economic benefits in the next 20 years, according to Tesla.

“This is a significant opportunity to make a major stride to improve our statewide economy. I look forward to receiving the necessary information so the Legislature can meet and take necessary action to support this major industry coming to Nevada,” said Speaker Marilyn Kirkpatrick.

Although Nevada has won the big prize of the battery plant, Tesla officials said they are still evaluating other states for a second location.

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