Where will Tesla build its 'Gigafactory'?

Tesla Motors is serious about building its own “Gigafactory” for battery production. Tesla needs a steady supply of battery cells for the Model S, the forthcoming Model X SUV and the $35,000 “Gen III,” currently aimed to hit the market in 2017.

Well, the Gigafactory is really there to support the volume of the third-generation car,” said Musk in the 4Q conference call with analysts last week. “And yes, that’s really — it’s happening in parallel with development of the third-generation car. We want to have the vehicle engineering and tooling come to fruition at the same time as Gigafactory. And yes, so that’s all really part of one strategy, one combined effort.”

Tesla is supposed to have a dedicated conference call just to talk about the giga factory some time this week. The massive project will be built with more than one partner; many speculate that Panasonic, Samsung or even Apple could be part of the project.

So where exactly will this thing be built?

Some say New Mexico. Others say Nevada. Texas is a possibility too.

Musk has said that the giga factory plant will be “heavily powered by renewables, wind and solar,” so speculation is rampant that the facility will be in the American Southwest, where solar is abundant. But there’s a lot of wind in Wyoming. And Texas makes political sense.

I’m sure the economic development offices of various states are battling it out, as are the utilities that would be powering this facility. Any gigafactory is going to require massive amounts of electricity to operate, so electricity pricing is likely to be a big factor. NV Energy is now a division of Warren Buffet’s MidAmerican Holdings, which is intriguing.

Tesla has remained tight-lipped about any details. And why not: all the speculation is great publicity for a company that spends nothing on advertising.

Another idea: the giga factory will be built right here in California!

“Building the factory in another state is a big disadvantage because of the cost of transporting those batteries,” said Sam Jaffe, an analyst at Navigant Research. “It would be a shame to get the batteries so much more cheaply with the economies-of-scale that  a Gigafactory offers, then to lose those savings in transporting the batteries a few thousand miles. The cheaper a battery gets, the higher a proportion of costs go towards transportation. That’s an important factor…..My prediction is that the gigafactory will be built in California. If I’m wrong, I’ll eat my charger cable.”

An undated photo of the Tesla Model S battery pack. (Tesla Motors)


Dana Hull Dana Hull (252 Posts)

Dana Hull covers clean technology and energy policy for the San Jose Mercury News. She often writes about electric vehicles, the smart grid, the solar industry and California energy policy, from RPS goals to Gov. Jerry Brown's big dreams for distributed generation.