Home Technology Tesla Motors Inc To Name At Least 2 States For Gigafactory

Tesla Motors Inc To Name At Least 2 States For Gigafactory

When you purchase through our sponsored links, we may earn a commission. By using this website you agree to our T&Cs.

Tesla Motors Inc (NASDAQ:TSLA) will soon announce sites in at least two states for the proposed gigafactory, says a report from Bloomberg. The electric vehicle maker will also break ground at each of the sites to make sure that one is ready to produce lithium-ion packs when it’s needed.

Tesla aims to minimize risk for gigafactory

In a recent interview, Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk said, “What we’re going to do is move forward with more than one state, at least two, all the way to breaking ground, just in case there’s last-minute issues.” The primary intention behind the more than one state option is to minimize risk for the gigafactory.

According to Musk, though the plan of breaking ground at two different sites and using only one initially may sound unusual, moving forward, the company may need more than one plant in the United States.

“We will end up spending more money than would otherwise be the case to minimize the timing risk,” he said.

Tesla Motors Inc (NASDAQ:TSLA)’s gigafactory will require an investment of $5 billion and will employ around 6,500 people. The proposed factory will play a dominant role in making Tesla a leading player in the electric car market. The batteries produced at the factory could be 30% cheaper than the currently available packs; also the plant will supply battery to Musk’s SolarCity Corp (NASDAQ:SCTY), which supplies solar panels to homes and buildings.

In March, Tesla Motors Inc (NASDAQ:TSLA) sold $2.3 billion in convertible notes to fund the construction of the plant. In China last week, Musk told reporters that the company is considering two locations, as reported by the Associated Press.

Mass market car possible with gigafactory

In February, the company announced plans to come up with a mass market electric car in about three years and wants to build the world’s biggest battery plant. Tesla Motors Inc (NASDAQ:TSLA) presently is considering sites in Arizona, Nevada, New Mexico and Texas.

According to CEO Elon Musk, cheaper battery packs will ensure that the planned mass market model is rolled-out in time. California, which is home to the automaker’s headquarters, is not being considered as a location for the plant because of regulatory concerns. Tesla’s third-generation car is expected to launch in 2015 and could be available at a price similar to BMW AG’s 3-Series sedan or almost half the price of the Model S sedan.

Tesla Motors Inc (NASDAQ:TSLA) will report its first quarter earnings on May 7, and is expected to post earnings of 9 cents a share.

Our Editorial Standards

At ValueWalk, we’re committed to providing accurate, research-backed information. Our editors go above and beyond to ensure our content is trustworthy and transparent.

Aman Jain
Personal Finance Writer

Want Financial Guidance Sent Straight to You?

  • Pop your email in the box, and you'll receive bi-weekly emails from ValueWalk.
  • We never send spam — only the latest financial news and guides to help you take charge of your financial future.