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)



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  • Albertico

    Good point on the distance of transportation. California would make a lot of sense if they were trying to save as much money as possible by all means necessary.

  • marty1234

    …if they adapted tesla batteries to 18 wheelers the cost of shipping would be greatly reduced..

    • Larry Johnson

      How do you figure? Electric vehicles cost at least double what diesel vehicles cost. When you figure in the hours it will take to recharge those batteries every two hundred miles, your costs will be sky high.

      Good luck living in your fantasy world.

      • Mike H

        A hybrid 18-wheeler isn’t crazy. Just imagine using diesel for the long haul and switching to quiet, pollution free batteries for the last few miles after exiting the freeway. If done right, the electric drive replaces or at least simplifies the transmission due to the high torque. In summary: use electric drive to accelerate to freeway speeds and around town; diesel for cruising at freeway speeds; electric+diesel for additional power for uphill grades; regen braking for downhill grades. Bonus: use electric for A/C and cab power while loading/unloading to reduce diesel idle. Makes sense to me.

        • Larry Johnson

          At what point does carrying heavy batteries and hundreds of pounds of a second power source around for thousands of miles make sense just so you can use electric for the last few miles???

          I’m always amazed at the lengths that liberals go to try to pretend that electric vehicles are practical.

          If you want to convince me electrical vehicles are practical, than end the $7,500 American taxpayer rebate for every EV vehicle buyer, and end American taxpayer support for EV manufacturers like Fisker that go bankrupt shortly after receiving half a billion dollars of American taxpayer money and end the hundreds of millions of dollars that American taxpayers pay to subsidize charging stations through companies that conveniently go bankrupt shortly after receiving American taxpayer money like ECOtality.

          “Green” energy subsidies to companies that quickly go bankrupt – a big reason Obama is driving the United States of America another TRILLION dollars plus into debt every year.

          • marty1234

            I’m anything but-liberal but I am objective and its obvious that we are just starting to see the benefits of electric power..
            And I could care less about convincing you about anything..

          • grendal

            Such short sighted vision. The reason for the Tax Credit is to allow new technologies (which have the chance to put America back on the industrial technological map) to get a slight foot up when competing against 100 year old technology that has gotten America into significant debt. We spend close to $1 billion a day on foreign oil. That is money leaving the country. That does not include the vast amount of taxpayers money used to protect that oil. Electricity is generated in the US. Building the largest battery factory in the world on American soil will also be of huge benefit to the US. You are arguing over dropped pennies as your pocket is being picked. Please try and think beyond your political blinders, Larry.

          • Larry Johnson

            Shortsighted?? What do you think adding over a TRILLION dollars in debt every single year will do to this country in ten years? A good portion of that debt is in cleverly designed Obama paybacks. Donate a million dollars to Obama, then open a “Green” factory. Get half a billion dollars in American taxpayer money, then declare bankruptcy. Solyndra is our local example of 34 cases.of that happening.

            Although I agree we need to stop sending our oil dollars overseas. Lets develop the proven oil reserves off our coast and in Alaska.

            Meanwhile we do the RESEARCH on viable alternative energy technology. AFTER we find viable technology, then we can start production of that technology. Instead we use taxpayer money to start full scale production of technology that’s not viable yet and force it down the taxpayer’s throat.

          • grendal

            Again such short sighted vision of the world. You really think that spending begins and ends with Obama? How about the money spent on Iraq (1 & 2) and Afghanistan? Just those wars amounted to trillions of American taxpayer dollars spent to support our need for oil and gas. You are talking billions when trillions are being lost. Those paltry billions are a desperate attempt to get the country away from spending trillions defending something that we. as a country, are addicted to. Tesla is the first American company that offers an alternative to the massive problem that got the country into this mess in the first place. It has the potential, with this factory, to offer an alternative choice. Staying with what we already know created the problems we are in, oil and gas, follows the definition of insanity. How much did taxpayers lose from the BP oil spill in the gulf? How about Alaska? http://www.weather.com/news/science/environment/oil-spill-mississippi-river-port-new-orleans-20140223
            The list goes on and on. Even if you don’t believe in Global Warming the pollution from burning fossil fuels for decades has cost taxpayers vast sums of money in increased health costs.
            Obama is just the latest President. The problem has been around for well over the last 12 Presidencies.

          • Mike H

            I think you and many like you would be hard to convince regardless of tax credits and rebates being withdrawn. However, in the spirit of fairness, there are several EV related companies such as Tesla and ChargePoint that are doing fine after receiving federal subsidies.

            I’d also like to point out that the “heavy batteries and thousands of pounds of a second engine” on an 18 wheeler is quite an exaggeration.

            I’m always amazed at the lengths that climate change deniers go to try to pretend that there is an unlimited supply of petroleum with which we can continue to poison our atmosphere.

            And why does it always come down to Obama hatred? BTW, Tesla is at $250/share as I write this….I guess investors don’t agree with your position.

      • marty1234

        I’m not talking about a 200 mile range.. The length and width of an 18 wheeler could have tesla batteries coupled together and or stacked. Solar array on top ect. I don’t know how feasible this could be but it’s interesting to ponder just as an RV tesla or tesla powered boat..

        • EV docmaker

          This past October was the first ever Plug Boat Summit in Nice, France. Small speed boats 100% electric then larger passenger ferries that were hybrids but able to turn off the diesel engine 100% once out at sea and then cruise for 4 hours with a modest 50kWh battery pack.

      • EV docmaker

        You really have a world view based on a massive condition of ignorance.
        30 minutes to put 200 miles into a MODEL S at a Supercharger. The time it takes to snack and bathroom. 90% of the time people only need to charge at home or work.

  • Aug Hki

    Its northern nevada. Close to Fremont, excellent solar radiation characteristics, plenty of rail access, very low cost land, good labor force. Thats my bet.

    • Mike H

      Yup – Fremont (or very close by) is my bet too! Heavy batteries are expensive to ship long distances and Tesla wants/likes/needs JIT supply chain for the most expensive and complex component. Not to mention that it just sends the wrong message to use diesel fuel (truck or railroad) to ship batteries long distances. Plenty of California incentives as well with the state’s ZEV Action Plan being adopted.

    • ManOnTheHill

      Reno area. Reno is a freeport, so no taxes on inventory, and reasonably close (by both rail and freeway) to Fremont. And abundant solar available for the factory…

  • Al Berard

    Nevada would also be close to Western Lithium Mines .

    • WrongPassword

      I’m guessing that myself. Texas and Arizona are hostile towards their cars and New Mexico strikes me as too distant. What are their policies on dealerships and internet sales?

      • Mike Anderson

        Arizona would be an awesome location, great for battery life, low rain here too!

  • Texan

    Go to Denton, Texas where 40% of their electricity portfolio is from renewable energy at no additional cost for using green energy.

    • George C

      tesla will never be built in teabagger texas who are openly hostile to tesla.

  • disqus_eM2BKDOBFd

    Regardless of where they put this. Does not matter. HUGE costs for the company to build this, and even then, the efficiency is probably not going to be there. If they have to retool components, because of a major redesign, this company will not make profits of any kind for a DECADE or more. By then, all the major companies will be undercutting little Tesla with their “innovations”. Not impressed by the snow job being done here.

    • joshuasantos

      The company is already profitable, and the factory is designed for cars being manufactured after 2017. By then it will be close to time for a Model S Gen 2 which will likely use the new batteries as well.

    • AmpedRealtor

      Your comments have no relationship to reality whatsoever.

    • fernsemer .

      “By then, all the major companies will be undercutting little Tesla with their “innovations” ” I dought it. Tesla is a pure electric car company. When it comes to building pure electric autos ,,, the traditional car companies don’t have the heart for it. They are fettered with the ICE in their thinking.

      For example: The Tesla model S. What has it ben now? Two years and none of the traditional auto companies have anything to compete with it? Nor is there any indication there will be. And Auto dealers are afraid of losing business to Tesla. So much so they’re trying to ban Tesla cars from being sold.

      As for undercutting little Tesla? That doesn’t mean much if Tesla has the better auto and people are willing to pay for it.

      Maybe after all is said and done maybe you’ll be proven correct. But at this point in time it appears you’re the one doing ‘the snow job’. We’ll have to wait and see how all this plays out.

      • WrongPassword

        Any thoughts on the Motley Fool article talking about BMW’s offerings? Personally, it looks like Tesla is creating competitive moats that’ll protect their market share but new technology is always tough to gauge, especially in a market as competitive as the car industry.

        • grendal

          BMW’s offerings are a city car and a supercar with a price tag to match. The supercar is a hybrid. It does look very cool for those that can afford it.

  • MickeyD

    Tesla is despised everywhere except in California, so there is nowhere else for them to go.

    • AmpedRealtor

      and you’re an idiot.

    • Alouisis1

      Seems there are car dealers and you who hate Tesla – nobody else really cares.

      • Al Berard

        You forgot to mention Big Oil Companies .

        • EV docmaker

          And the $60Billion that went to GENERAL MOTORS !!

      • Larry Johnson

        I would say the largest number of people upset with electric cars are the American taxpayer. Half a billion dollars of American taxpayer money to Fisker just before they conveniently went bankrupt. Over a hundred million dollars of American taxpayer money to electric car charging station ECOtality just before they conveniently went bankrupt. Just two out of 34 examples of Obama throwing away American taxpayer money to “green” companies right before they went bankrupt.

        I believe the “green” in green energy refers to American taxpayer dollars that these companies get away with after they declare bankruptcy.

        • EV docmaker

          What a load Romney crap !! First of all Obama is NOT a green President half of his so-called $90Billion for Green energy in fact went to COAL !!!!! Secondly the percentile of real green tech failure rate is less than 20% far better than most other industrial sectors. Lastly TESLA got a $465million loan from the Department of Energy which they paid back 9 years early with $26million in interest to the taxpayers !!

        • grendal

          You are getting your information from very bad sources, Larry. Fisker was approved for $550 million but only received $168 million because Obama’s DOE cut them off. The ATVM loan program that gave Fisker their money was created by the Bush Administration. The American taxpayer has made a whole lot of money because of the success of Tesla.

          • grendal

            $25 million was paid back from the bankruptcy and so the current loss to the DOE was $139 million. The company spent around a billion dollars and so a lot of that came back in various taxes.

          • Larry Johnson

            You can cherry pick your numbers if you want. I included the related bankruptcies for companies like A123 that supplied the Fisker batteries. A company that like Fisker got American taxpayer money, then went bankrupt, then we shipped the technology to China.

          • grendal

            Well you should be more clear about what you mean then. Those are two different companies that could be talked about together but should not be combined blithely. I too am not happy that a Chinese company was allowed to buy them out after they received Federal support. The fact that they are labeled “green” is beside the point. The fact that Tesla is thrown into the “green” mix is doing the company a huge disservice. Tesla is an American company that is achieving great things. Creating this giga battery factory on US soil will be another huge accomplishment for a company that is revolutionizing automotive technology worldwide. It is just the smallest step in reducing the countries need for foreign oil. Oil and gas has cost the American taxpayer trillions of dollars and with Tesla we might, just might, have an opportunity to put an end to that waste of money.

          • Larry Johnson

            Yes, this new giga factory may be a huge accomplishment for America.

            Or like electric car battery manufacturer A123 they may get huge piles of American taxpayer money, then go bankrupt and ship their technology to China.

            Or like electric car battery manufacturer Ener1 that got huge piles of American taxpayer money, then went bankrupt, then shipped their technology to Russia.

            I find history is a good predictor of future results.

            “Insanity is doing the same thing over and over again but expecting different results.”

          • grendal

            That is the same quote I used below. A123 was very bad at manufacturing, it was mostly a company that was doing battery research. Tesla is working with Panasonic which currently manufactures a significant amount of the world’s batteries now. Tesla is only creating a factory to fulfill their need for batteries for their future car. The demand is already there for that car. I would buy one this minute if it were available. There are hundreds of thousands of people worldwide that are patiently waiting for this car to arrive. Tesla hasn’t asked the government for one cent for this coming factory. I will predict that they never do. Why? Because their stock hit $250 today. Tesla can always do a secondary offering to pay for the factory so they don’t need Federal support at all. They got enough bad PR for taking the last Federal loan that they paid back 9 1/2 years early on a ten year loan.

        • Homebrook

          Larry, you have completely misidentified the culprit here. I am a Tea Party member. I am not upset at electric car companies. Why should I be? Who I am upset about is the US Government and those in it who pick winners and losers in business. That is wrong. It is the government who is wasting my money, not electric car companies, whether or not they receive money from Uncle Sam.

    • fernsemer .

      “Tesla is despised everywhere except in California,” You say! Oh really? You could have fooled me!

    • WrongPassword

      Despised by car dealers.

    • George C

      Tesla is loved everywhere in the world but teabagger red states!

      USA #1

      • daveman1

        Boy George… you seem to have an unhealthy obsession with teabagging. Take the sack out of your mouth & ease up on the obama fanboy crap… We’re talking about cars.

      • EV docmaker

        No wait ! Come on. TEXAS has a few crooked politicians in the pockets of the dealers. But there are over 1000 TESLA owners in Texas who bought out of State and there are Superchargers in Texas. BTW I am writing this from Manchester UK so if I know this why don’t you ? !

      • Homebrook


  • Alouisis1

    California makes the most sense – Solar, access to the car factory, access to ports. Texas maybe – if they can get Tex to drop the restriction on direct sales.

  • x-man

    There are a lot of additional costs to running a plant in CA than just transportation. Real Estate, construction and manufacturing wage costs are higher, there’s seismic building standards to meet, rigorous chemical waste disposal requirements, not to mention utility costs. Those are just some of the reasons why high-tech manufacturing moved many years ago to places like OR and CO when and if it remained in the USA.

    • EV docmaker

      Pacific NW has a lot of hydro power and yes a lower cost of living than the Bay Area. But there is that transportation to the factory factor unless the GEN III gets a new factory next door to the battery plant.

      • Nighthawk43

        Take it from a railroad man. Transportation to the factory wouldn’t be a problem in the Pacific northwest if TESLA builds the gigafactory relatively near an adjacent rail system.

  • bigdaddy

    only a fool would buy tesla stock.

    • WrongPassword

      Plenty of fools shorted it.

      • grendal

        The loss before the Q4 results were $4.5 billion for the shorters.

    • George C

      So many fools like me made millions off tesla stocks!

      USA #1

    • EV docmaker

      You mean the fools like my friends who bought sold a chunk then used the money to pay for $90K MODEL S and a solar system to power it with while jerks like you are driving around in a dinosaur and paying through the nose to fillup with dead dinosaur debris and pollute the planet !!

    • Homebrook

      I kind of like making a year’s salary in a single day. I could get used to this. Money from you – money for me. Not a bad cash flow.

  • George C

    Tesla = Made in California = #1 + teabagger-free

    Thank You President Barack Obama! 🙂

    • Poplar

      Not quite, George! I’m a teabagger, drive a Tesla Model S, and am a huge supporter of the company!

      • EV docmaker

        Good on you. I have always said that TESLA has a very diverse customer base and so it should be.

      • Homebrook

        As am I. Tesla is good business. Tesla is good science. Both antithetical to all things Liberal. Tesla behaves like a Tea Party member, if it were not so it would be bankrupt – like Solyndra.

    • grendal

      Tesla is an awesome company and the President has had almost nothing whatsoever to do with it. The only support they have received is that the $7500 tax credit, created by the Bush Administration, has been supported throughout the Obama Administration. That credit is open to every manufacturer and not exclusive to Tesla at all. The DOE, under Obama, did allow Tesla to access their loan faster in exchange for concessions. Tesla has subsequently paid that entire loan back nine years early, with $20 million in interest. The ATVM loan they received was created by the Bush Administration as well.

    • Homebrook

      George C. Tesla did not agree with you (http://www.teslamotors.com/sites/default/files/blog_attachments/gigafactory.pdf). The Gigafactory is not to be built in California, but Texas is in the running along with Nevada, Arizona, New Mexic.

  • Homebrook

    The gigafactory will not be built in California. Don’t doubt me. The business climate is abysmal. The only reason Musk builds Tesla’s in CA is because of the incredible deal he got on the NUMMI factory. Any transportation savings would be eaten up in the horrendous political climate of CA (and I live here).

  • philb

    I just hope they don’t build it in Texas? I mean really they cannot even sell the car in Texas under their regular business model.

  • Alan

    I love what Tesla and Elon Musk are doing. Musk is already buying land in Brownsville, TX on the Gulf of Mexico for potentially his SpaceX rocket launch site. Surprisingly, Texas leads all States in Wind Turbine Farms and production, and solar will only get bigger because of sun belt weather. The other competing States for the factory do not have ocean access. Houston’s port allows shipment of batteries and autos around the world; as likely an automobile factory could follow the battery factory one day.

  • Bill

    You have to read between the lines. Tesla isn’t saying why they won’t build the manufacturing facility in CA, but this one line from Dana’s report really jumped out at me and this may be the deciding factor: “Any gigafactory is going to require massive amounts of electricity to operate, so electricity pricing is likely to be a big factor. Thanks to over-zealous regulation and renewable energy mandates, California power costs are higher than anywhere else. Residential electricity costs an average of 27.6 percent more per kilowatt hour than the national average. Commercial rates are 44.4 percent higher. For industrial use, CA electricity is 74.4 percent higher than the national average. Now, if you were going to open up a plant that required a tremendous amount of energy, would you put it in California?

  • Marc Dedeaux

    Reason’s I think gigafactory will be in Nevada:

    As well as being closest to their Fremont factory they also have the nearby renewable resources they want:

    1) Solar Energy – Apple is building a huge solar farm near Reno


    2) Geothermal Energy – Blue Mountain Geothermal plant in same county


    3) Wind Energy – wing farm in adjacent county


  • Ed

    It looks like they’re looking to set up the factory in a state that mirrors China in wages and work conditions?