From the “You Never Know When You Might Need a Nice Hole in the Ground” Department:
Palo Alto’s Tesla Motors has created a stir with two announcements today: First, it will partner with Japan’s Panasonic on battery production at its much anticipated Gigafactory. And second, it has broken ground on a Gigafactory site outside Reno.
Normally, news of a factory groundbreaking might suggest a factory will actually be built at the site where ground has been broken. But Tesla is quick to say that the Nevada site is only “potentially” the location of the $5 billion Gigafactory. That’s because the facility is still the focus of a bidding war among several states. Here’s how Tesla explains the situation in its Form 8-K report on current activities released today:
Consistent with our strategy to identify and break ground on multiple sites, we continue to evaluate other locations in Arizona, California, New Mexico and Texas. The final site for the first Gigafactory will be determined in the next few months, once we have full visibility and agreement on the relevant incentives and processes for enabling the Gigafactory to be fully operational to meet the timing for Model 3. We see these concurrent efforts as prudent. This vehicle will be our third-generation product and will substantially broaden the addressable market for Tesla, helping to accelerate the transition towards sustainable transportation. Any potentially duplicative investments are minor compared to the revenue that could be lost if the launch of Model 3 were affected by any delays at our primary Gigafactory site.
Tesla’s statement doesn’t really help you visualize the scale of the Nevada site, on Interstate 80 about 25 miles east of downtown Reno. The Reno Gazette-Journal’s story on the development does:
Lance Gilman, the developer of the industrial center where Tesla is doing work, told the RGJ Thursday the project is one of the largest grading projects ever in the United States.
“We have finished a superpad to accommodate 5 million square feet,” Gilman said. “We moved several million cubic yards of material.”
He added Tesla is still working on other sites.
“Speed is critical to them. We finished this in 3 1/2 weeks,” he said. “There’s nowhere else in world you can get a project up as fast as here. Tesla can start pouring concrete next week if they desire.”
Gilman said reports of Tesla stopping work at the Northern Nevada industrial center are partially true.
“They have reached transition point that they’re going to add square feet,” he said.
The guy is saying they’ve excavated a 5-million-square-foot site? That’s roughly the size of 80 football fields. And they’ve moved “several million” cubic yards of material? Assuming conservatively they mean 3 million cubic yards, that would be the volume of 1,200 Olympic swimming pools.
But the numbers that really count are the ones attached to dollar signs. As part of its deal with Tesla, Panasonic is expected to invest about $1 billion, mostly in battery-making equipment at the new plant. Tesla has said it will spend up to $5 billion on the facility, which is expected to employ about 6,500 people. Wherever it’s built.
The magnitude of the investment, the jobs and the prestige that would go along with winning a high-profile competition for a cutting-edge manufacturing facility have fueled the competition for the plant. City officials in Tucson, Arizona, have approved a building permit for the plant without waiting for an application from the company.
For its part, California has enacted a massive industrial tax credit that apparently would benefit Tesla if it decides to build the Gigafactory here.