Tesla Gigafactory Planned: Huge Battery Plant Courted by States

Image: Tesla Gigafactory Planned: Huge Battery Plant Courted by States

Thursday, 27 Feb 2014 04:36 PM

By Morgan Chilson

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Tesla Motors’ plan to build a "gigafactory," which would be the world’s biggest battery plant, is ramping up competition between states wanting to attract the 6,500 jobs and $5 billion investment that will be made in the facility, Businessweek reported.

In a news release Wednesday, Tesla announced the offering of $1.6 billion of convertible notes to begin financing the Tesla gigafactory, as well as business expansion in the United States, and development and production of a “Gen III” mass market vehicle.

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The company is looking at locations in Texas, Nevada, Arizona, and New Mexico for a 10 million-square-foot manufacturing facility, according to a gigafactory fact sheet on Tesla’s website. The company would not comment to Businessweek on whether there were any active negotiations.

“This would rank as the most attractive industrial project out there,” Dennis Cuneo, president of DC Strategic Advisors LLC, told Businessweek.

The company’s fact sheet said the factory is expected to cost Tesla and its partners $4 billion to $5 billion through 2020, with Tesla putting up $2 billion of that cost.

Tesla founder Elon Musk has said the factory is necessary to Tesla’s future because the company’s production process has frequently been held up by lack of an adequate battery supply, UK’s The Register reported.

"The factory is really there to support the volume of the third generation car," Reuters reported Musk said on a conference call last week about the proposed factory. "We want to have the vehicle engineering and tooling come to fruition the same time as the giga factory. It is already part of one strategy, one combined effort."

Japan’s Nikkei newspaper reported that Panasonic and other companies may invest as much as $1 billion in the Tesla battery plant, Reuters said.

All the talk of the battery plant moving ahead drove Tesla shares up this week, and Businessweek reported that Musk made $1.1 billion (on paper) as the price went up 14 percent. Musk owns 23 percent of the company.

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