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2014 Tesla Model S P85 with a price tag of just over $124, 000 in Vancouver, British Columbia, Wednesday, May 7, 2014. (Rafal Gerszak For The Globe and Mail)
2014 Tesla Model S P85 with a price tag of just over $124, 000 in Vancouver, British Columbia, Wednesday, May 7, 2014. (Rafal Gerszak For The Globe and Mail)

Tesla settles on Nevada for ‘gigafactory’ site Add to ...

Tesla Motors Inc., which has broken ground on a potential site in Nevada for its planned massive battery factory, will proceed with building the first such facility there, said two people familiar with the matter.

Representatives from the electric-car maker led by billionaire entrepreneur Elon Musk are to attend the event with Nevada Governor Brian Sandoval set for 4 p.m. local time tomorrow in Carson City, Tesla spokesman Simon Sproule said in a phone interview. He declined to confirm whether Musk would attend or elaborate on what will be announced. Tesla said in August it began initial preparation work at a site near Reno.

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“We continue to work with the state of Nevada, and look forward to joining the governor and the legislature tomorrow,” Sproule said. While Musk has said his intention is to break ground at more than one site for the lithium-ion battery factory, Sproule declined to say whether other states are still being considered.

With plans to invest as much as $5-billion (U.S.) in the facility and the possibility of 6,500 direct jobs, the Tesla factory ranks as one of the largest new industrial projects in the U.S. The Palo Alto, California-based company had also named Arizona, California, New Mexico and Texas as potential sites, triggering an incentive fight among the Southwestern states.

Musk has set a goal for Tesla to eventually sell at least 500,000 electric cars and supply stationary battery packs to store power from solar panels for homes and businesses. The company will eventually need more than one Gigafactory, Musk told Bloomberg in April.

The Nevada project won’t be the last such factory for Tesla, said one of the people who asked not to be named as the matter isn’t yet public.

‘Good-paying jobs’

Sandoval, a Republican, will discuss a “major economic development” in a press conference tomorrow at the state capitol, the governor’s website said in a statement. Jennifer Cooper, a spokeswoman for Sandoval, declined to elaborate on what he’ll say.

Sandoval wants state legislators to schedule a special session to approve incentives for the Tesla factory, according to a report by KSNV, a Las Vegas television station.

Nevada state Senator James Settelmeyer, a Republican whose district includes the Reno-Tahoe Industrial Park where Tesla began initial site preparation work, said he doesn’t yet know details of economic incentives the state is offering Tesla.

“I’m for anything that would bring good-paying jobs to my district,” Settelmeyer said in a phone interview. “I’d do that for any company.”

Nevada unemployment

For Nevada, with a 7.7 per cent unemployment rate that ties with Michigan and Rhode Island for the third-highest in the U.S., Tesla represents an opportunity to show that its economy can diversify beyond gambling and housing.

Musk has said he wants the factory as part of his plan to accelerate production of Tesla’s electric cars to hundreds of thousands of units annually. The scale of the plant, which will fabricate battery packs from raw materials shipped to the facility, is intended to reduce lithium-ion cell costs at least 30 per cent, according to Musk.

Tesla fell 1 per cent to $281.19 at the close in New York. The shares have risen 87 per cent this year.

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