Tesla Motors Has Considered Nevada for New Gigafactory

Tesla Motors

Tesla Motors has considered Nevada for its new gigafactory. Auto maker Tesla, maker of luxury electric cars such as the Model S, announced plans for a 10 million square foot battery manufacturing plant that would employ 6,500 people. The plant would be located somewhere in the Southwest and would use wind farms to help augment its power needs. Construction could begin as soon as this year. Locations in Texas, Nevada, Arizona, and New Mexico are being considered. Tesla officials declined to comment if the negotiations have begun.

The Silver State has three key locations making Tesla Motors consider Nevada for its gigafactory. There is the Tahoe Reno Industrial Park, nine miles east of Reno in Storey County. Of all the Nevada locations, it is closest to Palo Alto, where the cars are produced and is already home to the distribution centers for Wal-Mart, e-Bay, and Toys R Us. In the southern part of the state Henderson has 358 industrial areas near Interstate 15. North of Las Vegas is the Mountain View Industrial Park near the Las Vegas Motor Speedway with 1,800 acres of flat available land.

Over the years, Tesla has struggled for a reliable supplier of lithium-ion based batteries for its electric cars. Currently, Sony’s Panasonic is its largest battery supplier with SolarCity second. Because of the limited supply of batteries, Tesla can only produce 35,000 cars a year. The Gigafactory could increase productivity to 500,000 electric vehicles. The company wants its own production of the lithium-ion battery. Having its own facility would lower the overall price of the electric car for consumers and serve as another source of income.

The lithium batteries are the most expensive component of the electric car. Tesla’s Model S, the least expensive vehicle in its fleet, has a starting price of $71,000 and a range of 265 miles before a required recharge.

The cost of the gigafactory is estimated between $2 billion and $5 billion. Tesla announced plans to sell $1.6 billion in bonds to help finance the battery plant and lower the overall cost of their vehicles. When the factory reaches full potential in 2020, the gigafactory would produce more lithium-ion batteries than are currently in use today. In its first year of production, Tesla expects battery costs to fall by more than 30 percent. The reduced costs would coincide with deliveries of the first mass-produced electric cars that would have a starting price of $35,000.

Electric car companies such as Tesla do not publicly disclose their battery costs. Industry analysts estimate the price at $400 a kilowatt-hour. Tesla’s cost per hour might be lower. The goal is producing the batteries under $200 a kilowatt-hour.

Governor Brian Sandoval has met with company executives and is honored Tesla Motors has consider Nevada for its gigafactory. The governor highlighted the state where the electric car maker can grow and thrive with its skilled work force and pro-business climate.

Senator Harry Reid, who hosts the National Clean Energy Summit every August in Las Vegas has had Tesla’s CEO Elon Musk speak at previous conventions. The Senator would play a leading role in having Nevada considered by Tesla Motors for its gigafactory.

By Brian T. Yates

Sources:
Las Vegas Review Journal 
Bloomberg Businessweek
Zero Hedge
Wall Street Journal
San Jose Mercury News 

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