Tesla Motors Inc (NASDAQ:TSLA) released a lot more details about its plans for the gigafactory this week as planned, and so far, the company says it is considering four states as potential locations for the facility. Nevada, Arizona, New Mexico and Texas are the finalists so far, but some believe Nevada is the most likely candidate.
Why Nevada could win Tesla’s gigafactory
Speaking on Bloomberg, 9to5 publisher and editorial director Seth Weintraub listed a number of reasons he thinks Nevada will win. He notes that it is the closest to Tesla Motors Inc (NASDAQ:TSLA)’s car building factory in Freemont, Calif. He said there are rail lines running through there, and, as others have said, there’s a big lithium factory located in Nevada. Also he noted that there are additional lithium reserves in Wyoming.
Most expect that Tesla Motors Inc (NASDAQ:TSLA) will receive a number of tax incentives from the state it ends up choosing. Management had said they would announce the state in their most recent earnings report last week, but the fact that they still have a list of finalists suggests that they’re angling to get the best deal with the most tax incentives possible.
Tesla Motors Inc (NASDAQ:TSLA) said it will invest $2 billion in capital expenditures for the gigafactory, with the rest of the $4 billion to $5 billion coming from its partners. It also provided a timeline, which shows construction actually beginning this year.
What Tesla could do with its gigafactory
Of course the lithium-ion batteries which are in Tesla Motors Inc (NASDAQ:TSLA)’s Model S are quite a bit different from the lead acid batteries which are in traditional cars. Those batteries offer a lower energy density than lithium ion and are far less expensive and heavier. The battery for the Model S costs $40,000.
Most also agree that Tesla Motors Inc (NASDAQ:TSLA) could do more than just build batteries for its cars at its gigafactory. The facility is expected to be 10 million square feet and have the capacity to build more battery power than all the other lithium-ion factories in world combined.
Tesla Motors Inc (NASDAQ:TSLA) said it will be able to produce 500,000 vehicles a year, but that doesn’t mean that it will. Some of that capacity could be used to build batteries for storage purposes at wind farms or solar energy facilities, like those built at SolarCity Corp (NASDAQ:SCTY), the company of which Tesla CEO Elon Musk is the chairman. Bloomberg anchor and reporter Matt Miller suggested that Tesla could actually use its batteries to move electricity to where it needs to go, possibly to its Supercharger stations and elsewhere.