Which State Will Tesla Choose for Gigafactory?
Since the “great recession” began and jobless claims skyrocketed, states have been desperately trying to kick start their economies. There have been a plethora of efforts such as lowering taxes for the rich (like that was going to work), investing in dated energy technology, and pretty much every, and any, idea one could muster. Now Tesla’s billion dollar battery production factory could be the answer, and four states are battling to build it on their land.
The Gigafactory, as it’s called, will produce batteries and cell packs for Tesla cars at an unheard of rate. By 2020, Tesla estimates the factory will have the capacity to produce 50 times the amount of batteries made for its cars last year. By manufacturing its own batteries, Tesla will be able to drive the price down over time. Tesla announced, “By the end of the first year of volume production of our mass market vehicle, we expect the Gigafactory will have driven down the per kWh cost of our battery pack by more than 30 percent.”
At five billion dollars, the project comes at a steep price, but funding is already underway. With the creation of 6,500 new jobs, this will act as a huge economy booster for the chosen state. Nevada, Arizona, New Mexico, and Texas are all in the running to host the Gigafactory, which plans on being powered by wind and solar energy. All four contenders have the optimal environment for these technologies, but it looks like state incentives and politics are going to end up playing the biggest role in Tesla’s decision.
It can’t go unmentioned that Texas has already placed a statewide ban preventing Tesla from selling its cars straight to the consumers, which is its preferred method of business. Tesla simply wanted to sell its vehicles without the use of an outside dealership, but Texas nipped that in the bud, most likely hindering its chance of getting the Gigafactory.
However, Texas Governor Rick Perry (R) seems to have realized the damage this ban will cause in terms of winning Tesla’s approval, and has started to publicly speak against it.
We live in a different world than we did 30 years ago, 10 years ago. I think it’s time for Texas to have an open conversation about this. . . . The cachet of being able to say we put that manufacturing facility in your state is hard to pass up.
Basically, Perry realized that Texas stole a bike from the kid whose dad has Cowboys season tickets. Now Texas is going to have to do some buttering up to get Tesla back on its side.
The other three states have clearly learned from Texas’s huge mistake, with Arizona lawmakers pushing a bill that would allow Tesla to sell its EVs straight to consumers. Representative Warren Peterson (R) said, “This is a great opportunity for us to send a message that we welcome business and we welcome Tesla here to Arizona. We shouldn’t deny our consumers from being able to purchase a product if they want.” New Mexico is also working on schmoozing Tesla by granting tax breaks to the company, should it build in the state.
Right now Nevada looks like the front runner though, due to its location and easy access to transportation. The site for the potential Gigafactory is at the former US Air Force base in Reno. That site has the amount of land necessary for the large facility, plus it’s on the railroad line to Tesla’s Fremont, CA assembly plant. That would make it much easier and faster to get the batteries to the cars, thus reducing production time.
Tesla plans on starting construction of the facility this year with production of the batteries beginning in 2017, so we should see a decision fairly soon. As the company gets closer to choosing a location for the 10 million square foot facility, it’s certain it will be showered with various propositions. For now though, we can just sit and wait to see which will be the lucky state.
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