Nevada Gov. Brian Sandoval and Tesla Motors CEO Elon Musk announced on Thursday that, indeed, the Gigafactory will be located at the Tahoe-Reno Industrial Center just outside Reno, NV. The press conference held in Carson City not only confirmed yesterday's rumors, but Gov. Sandoval claimed the deal would "change Nevada forever" with billions of dollars of economic activity and over 20,000 new jobs.
The Gigafactory will produce 50 gigawatt-hours of battery packs per year, by 2020, which the company says is enough for Tesla Motors to produce 500,000 vehicles per year. This year the guidance from Tesla Motors management is to expect production of 35,000 Model S cars, meaning that over the next 6 years Tesla intends to increase production by over 10x.
This is quite a stretch, and many rightfully express doubts that Tesla Motors will achieve this goal. On the other hand the company has already had huge success making it plausible these production levels will be met. The former NUMMI facility at which Tesla manufactures its cars had a 500,000 car per year capacity when it was operated by GM and Toyota. In June and May 2010 when Tesla and Toyota announced the sale of the NUMMI plant to Tesla, many were wondering what the company would do with such a large factory. Now we know.
The deal has drawn some criticism from watchdog groups who have complained of secrecy surrounding the negotiations, and questioning whether the large investment by Nevada's government (tax incentives) will pay off. As if to answer that criticism, Gov. Sandoval spoke at length about the economic gains Nevada will reap, and claimed the payoff will be about $80 per dollar of incentives. These gains include:
- $100 Billion in economic impact over the next 20 years
- Create 3,000 construction jobs immediately
- Employ 6,500 people, at an average wage of $25 per hour, plus benefits
- Create another 16,000 indirect jobs in other industries
- Add 4% to the states GDP
- Additional research dollars for Nevada's universities, and other educational benefits
- Tesla Motors will directly fund some of Nevada's K-12 educational system
As we see in the artists rendering of the factory, the facility will have interesting environmental features. Tesla claims it will be a "Net Zero Energy" facility, meaning the whole factory will not require external electricity or other power. The rendering includes a huge solar array on the factory roof, as well as a large wind turbine farm on the mountainside above the facility.
A common criticism of electric cars is the energy impact of their manufacturing. By building a "Net Zero Energy" facility, Tesla Motors seems intent on quashing that criticism.
The press release issued by Tesla Motors includes these quotes:
“This is great news for Nevada. Tesla will build the world’s largest and most advanced battery factory in Nevada which means nearly one hundred billion dollars in economic impact to the Silver State over the next twenty years. I am grateful that Elon Musk and Tesla saw the promise in Nevada. These 21st century pioneers, fueled with innovation and desire, are emboldened by the promise of Nevada to change the world. Nevada is ready to lead,” stated Governor Brian Sandoval.
“I would like to recognize the leadership of Governor Sandoval and the Nevada Legislature for partnering with Tesla to bring the Gigafactory to the state. The Gigafactory is an important step in advancing the cause of sustainable transportation and will enable the mass production of compelling electric vehicles for decades to come. Together with Panasonic and other partners, we look forward to realizing the full potential of this project,” said Elon Musk, Chairman and CEO of Tesla Motors.
“On behalf of the State of Nevada, I would like to acknowledge this monumental day and provide my initial support. This is a significant opportunity to make a major stride to improve our statewide economy. I look forward to receiving the necessary information so the Legislature can meet and take necessary action to support this major industry coming to Nevada,“ stated Speaker Marilyn Kirkpatrick.