Tesla Is Building a Massive New Factory in Reno. Or Is It?

Future Tense
The Citizen's Guide to the Future
Aug. 1 2014 12:07 PM

Tesla Is Building a Massive New Factory in Reno. Or Is It?

Tesla's gigafactory could go a long way toward revitalizing Reno, where homeless encampments sit in the shadow of casinos. But Elon Musk is holding out for better incentives.
Tesla's gigafactory could go a long way toward revitalizing Reno, where homeless encampments sit in the shadow of casinos. But Elon Musk is holding out for better incentives.

Photo by Max Whittaker/Getty Images

Tesla has broken ground on its “gigafactory”—the world’s largest electric-car battery factory—in Reno, Nevada, the company confirmed on Thursday. It also confirmed that it’s partnering with Panasonic to build the factory.

Will Oremus Will Oremus

Will Oremus is Slate's senior technology writer.

That sounds like huge news for Nevada, as the plant promises to bring some 6,500 tech and manufacturing jobs and form a major hub for the growing lithium-battery industry. As I’ve explained, the gigafactory is crucial to Tesla’s long-term plans to revolutionize the global auto industry.

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But Nevada can’t celebrate just yet. Tesla has broken ground on the factory in Reno, but that doesn’t mean it will end up building it there.

In an unusual, shrewd, and arguably devious move, Elon Musk’s company has also picked out potential gigafactory sites in several other Southwestern states, including Arizona, New Mexico, and Texas. California may also be in the running. Presumably, Musk is waiting to see which state will offer the most streamlined permitting process and attractive incentives before making a final decision.

The Reno site is the farthest along, as Tesla has already cleared the land and mostly completed the construction pad for a facility there. But Elon Musk said in a conference call with investors Thursday that work on the Reno site has “paused” while the company continues negotiations with Nevada officials.

“I think it makes sense to have multiple things going in parallel,” Musk said coyly. “Before we actually go to the next stage of pouring a lot of concrete, we want to make sure we have things sorted out at the state level, and the incentives are there that make sense and are fair to the state and to Tesla.”

In case that wasn’t a clear enough hint that Tesla is holding out for a sweeter deal, Musk added, “On the Nevada side, at this point the ball is in the court of the governor and the state legislature.”

This is not the first time Tesla has used the promise of coveted green manufacturing jobs to wrangle some juicy incentives from state and local governments. California offered major tax breaks several years ago to get the company to build its Model S sedan there rather than in New Mexico.

Previously in Slate:

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