Tesla selects Nevada for $5bn battery gigafactory
The electric carmaker has confirmed Storey County, Nevada as the site for its $5 billion battery plant, securing over $1 billion in state tax incentives over 20 years.
Tesla has confirmed it will build its $5 billion battery gigafactory in Storey County, Nevada, securing over $1 billion in tax breaks and abatements from the state over the next 20 years. The decision, announced in September 2014 by Nevada Governor Brian Sandoval, follows a months-long competition between Nevada, California, Texas, Arizona and New Mexico to host the project.
The gigafactory is central to Tesla’s strategy to scale up production of its electric vehicles, aiming to cut battery costs and secure supply for future models. The company’s plans include the $35,000 Model 3, targeted for launch in 2017, which relies on more affordable and higher-capacity battery packs than current models. Tesla’s existing Fremont, California facility will continue to assemble vehicles, including the Model S and forthcoming Model X, but battery production will shift to Nevada once the plant is operational.
Why Nevada was chosen
Tesla CEO Elon Musk stated that Nevada’s offer was not the largest financial incentive on the table, but the state’s ability to deliver permits and infrastructure quickly was decisive. The selected site, an industrial park about 15 miles east of Reno, has a population of around 4,000, offering ample space for the massive facility and future expansion. State officials expect the plant to create thousands of jobs, both during construction and in ongoing operations.
Panasonic’s role and supply chain implications
Panasonic will partner with Tesla to manufacture lithium-ion cells at the gigafactory, contributing capital and technical expertise. The Japanese electronics firm’s involvement is seen as crucial to achieving the scale and cost targets Tesla has set. The plant will assemble battery packs not only for Tesla’s own vehicles, but potentially for other automotive and stationary storage applications, supporting Tesla’s ambitions to become a major player in energy storage as well as electric vehicles.
- Battery cell manufacturing by Panasonic on site
- Pack assembly for Tesla vehicles and possible third-party use
- Potential supply for stationary energy storage products
Impact on Nevada and Tesla’s growth plans
State officials anticipate the gigafactory will bring long-term economic benefits to Nevada, including new jobs and increased tax revenue over time. For Tesla, the plant is expected to secure battery supply for its next-generation vehicles and help reduce manufacturing costs, a key factor in making electric cars more accessible to mainstream buyers. The company aims to build over 60,000 vehicles in 2015, with output expected to rise sharply once the gigafactory reaches full capacity.
Final details of the plant’s construction and operation are still being negotiated between Tesla, Panasonic and Nevada authorities. The project is viewed as a major step in Tesla’s transition from a niche manufacturer to a large-scale automaker and energy company.
