Tesla CEO: “Nevada is it;” $1.3B package offered

RENO, Nev. — The Biggest Little City in the World is about to get a new neighbor: the biggest lithium battery factory in the world that Nevada Gov. Brian Sandoval asserted will create more than 22,000 new jobs and pump $100 billion into the state’s economy over the next 20 years.

Tesla Motors Inc. CEO Elon Musk declared the Silver State the winner Thursday of a high-stakes battle with California and three other states for the $5 billion “gigafactory” he says they need — and need fast — to mass produce cheaper batteries for its next line of more-affordable electric cars.

Sandoval unveiled the package of tax breaks and incentives worth as much as $1.3 billion that his economic development team negotiated with Tesla in secret for nearly a year to bring the plant to an industrial park 15 miles east of Sparks, a Reno suburb founded along the Union Pacific Railroad a century ago.

The package still must be approved by lawmakers during a special session of the Legislature, which appears inclined to do so and could take action as early as next week. But Sandoval called it a “monumental announcement that will change Nevada forever.”

Musk confided Nevada’s wasn’t the most lucrative among the offers from California, Texas, Arizona and New Mexico.

But “it wasn’t just about incentives,” he said, citing Nevada’s pro-business regulatory climate and his “high confidence” the plant will be ready to open in 2017. “That was truly the most important thing.”

Later, Musk told reporters that Tesla would stop looking for another state as a backup, as the company had said earlier it would do in case Nevada did not come through.

“Nevada is it,” he said.

Musk, who had just flown in from London, briefly bungled the pronunciation of “Nevada” during the ceremony — a big no-no for locals — but recovered and twice received standing ovations from more than 200 dignitaries on the Capitol lawn.

“It’s a real get-things-done state,” Musk said, explaining how Nevada prevailed in a “relatively close” competition.

Steve Hill, executive director of Sandoval’s Office of Economic Development, drew a laugh from the crowd when he said:

“That’s the first I’ve heard incentives weren’t the most important thing.”

Earlier Thursday, at least a half-dozen road graders, bulldozers and dump trucks were working at the site at the Tahoe Reno Industrial Center along I-80 where Musk said the plant would cover an area equal to 174 football fields and produce more lithium batteries than all the existing factories in the world combined last year.

“It’s difficult to describe in words, but it’s a heck of a big factory,” he said.

Also a heck of a lot of jobs for a state that had the nation’s worst unemployment rate during the depths of the Great Recession.

Hill said the 22,000 jobs would include 6,500 permanent ones at the factory with hourly wages above $25 and a peak of 3,000 construction jobs before the 2017 opening.

But Greg LeRoy, executive director of the research group Good Jobs First, said the factory would bring a total of 19,500 jobs, and not the 22,000.

Tesla’s choice for the facility takes it a big step closer to mass producing an electric car that costs around $35,000 and can go 200 miles on a single charge. That range is critical because it lets people take most daily trips without recharging, a major barrier to the widespread adoption of electric vehicles.

A man who stopped at an I-80 truck stop Thursday to refuel across the street from the access road to the site told a reporter he’d consider buying an electric car someday.

“But right now they don’t have enough of those places to charge,” said Donald Hopkins, headed from his home in Rio Vista, California to vacation in Indianapolis. “Maybe if they get one where you can drive from here to Detroit.”