According to reports surfacing today, Tesla Motors has gone ahead and chosen Reno as the site of the Gigafactory. Nevada Governor Brian Sandoval is holding a press conference on Thursday to announce “a major economic development announcement” and according to the reports, a special legislative session has been called so the legislature can sign off on the deal or pass some enabling legislation. Tesla Motors has confirmed they will be making an announcement in conjunction with Gov. Sandoval.
The Gigafactory is one of the required assets Tesla must build for ramping up Tesla Model 3 production. That car will be produced in volumes above 100,000 per year, containing perhaps 60 kilowatt-hours of battery pack per car, and to meet production volume and target price goals Tesla Motors has determined it must build a gigantic battery pack factory with partner Panasonic.
What we haven’t known is the location for that factory, because Tesla Motors is playing off several states to get the best deal in multiple dimensions.
We did learn in July that a site was being prepared near Reno, under extreme secrecy, and that the site appeared to have been abandoned. Tesla CEO Elon Musk did confirm the work in Reno during the most recent analyst conference call, and at that time he reiterated that they’d be pursuing negotiations with several states.
According to a report by the Review Journal, the choice has been made, and Tesla Motors is set to announce Reno as the site for the Gigafactory. That report in turn references a CNBC report citing unnamed sources who say the deal is done, and that they’re working out details. Additionally Nevada Governor Brian Sandoval’s office has announced a press conference on Thursday for “a major economic development announcement.”
For its part, the Review Journal piece flatly says “Tesla has chosen Nevada for its $5 billion battery plant.” It doesn’t cite any proof beyond the CNBC report which makes me wonder just how they came to this conclusion.
That is, ever since Tesla CEO Elon Musk began discussing the Gigafactory the word was that Tesla would go through the site selection process in several states, perhaps even break ground (prepare a building pad) in more than one state, before making the final selection. That selection was expected to be made later this year rather than “now”.
The Desert Sun also has a report saying “Tesla appears to have decided to build its massive battery factory in Nevada, dashing desert leaders’ hopes the electric automaker would locate its so-called Gigafactory by the Salton Sea.” That report also says Tesla Motors made a statement to the Desert Sun confirming a major economic development announcement will be made, at 4 p.m. Thursday in Carson City, Nevada’s capital, alongside Gov. Brian Sandoval and legislative leaders.
California had been in the running thanks to some enabling legislation, and lithium deposits near the Salton Sea. However, as the Desert Sun piece notes, the California Legislature session closed last week without passing anything to support the Gigafactory deal. SB-1309 would have been that legislation, but it was sent to the Commerce committee in June never to emerge.
The Reno Gazette-Journal has a piece full of raw updates they gathered throughout the day. It says Gov. Sandoval has conferred with legislators and has called a special session for next week “to consider a tax abatement package for Tesla.” The session is likely to last 1-2 days. The special session is required because the size of the tax incentive package, over $400 million, is beyond caps on property and sales tax breaks.
Why would Tesla Motors jump the gun and go directly to a decision? Yes, Tesla’s discussions were pretty far advanced in the five states (Arizona, California, New Mexico, Nevada, Texas) but they broke ground in only one location – Reno Nevada.
Maybe, just maybe, Tesla and Panasonic liked what they saw so much that it blew away all the other contenders?
I’m mulling the likely process for approving a Gigafactory deal in any state, and have a hard time believing that a final deal could be reached without enabling legislation in the state. But what do I know? I’m just a software engineer turned semi-pro journalist.
The Review Journal piece does have some information from a member of the Nevada Legislature on that regard:
Assembly Speaker Marilyn Kirkpatrick, D-North Las Vegas, said state lawmakers have not yet decided whether a special session of the Legislature will be needed to approve tax breaks or other incentives as part of any deal with Tesla. “I would say no, we have not crossed that bridge yet,” she said.
The Nevada Legislature meets every other year, and isn’t due for a regular session until 2015.
In August, The Progressive Leadership Alliance of Nevada and several advocacy groups in other states posted an open letter seeking to open the veil of secrecy surrounding the deals being wrangled to win the Gigafactory.
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