Is Tesla really coming to Nevada or not?
Nevadans on Thursday could finally hear — officially — whether the state is in line for the electric car maker’s much-anticipated and mega-sized lithium ion battery-manufacturing plant.
Then again, maybe not.
Palo Alto-based Tesla Motors, Inc. will report its second quarter earnings report Thursday after the stock markets close, and shortly thereafter, Tesla executives have scheduled a conference call with Wall Street analysts in which further details of the gigafactory is expected to be addressed.
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Tesla: The appeal of lithium-ion batteries
But it’s not certain that Tesla CEO Elon Musk, tight-lipped so far, will open up on Nevada or any of a handful of other states vying for the $5 billion factory and the estimated 6,500 jobs it will create when it’s operational, as planned, in 2017.
“We’re going to decline comment,” was all Tesla spokeswoman Liz Jarvis-Shean said in response to a Reno Gazette-Journal query earlier this week on whether the announcement would come Thursday.
The anticipation and anxiety in the local economic development community have been building since last winter.
In February, Tesla said Nevada was among four states the company was considering for the battery gigafactory it estimates could be as big as 10 million square feet in size.
Then in May, Tesla said it would select, starting in June, two or three finalist states to begin construction simultaneously as a way to maximize speed and minimize risk of delays before a winning site is selected by year’s end. It also noted that California could be a possible contender.
But June and nearly all of July have come and gone and still no word on which sites from the original four semifinalists would advance to the finalist stage. And in fact, Tesla’s home state of California, once considered a long shot, is now seriously in the running, Tesla says, and reports last week in Tech Times and the Los Angeles Times say Stockton south of Sacramento is the favored locale.
On the Nevada front, speculation has pointed to grading work started in late May on a 600-acre site, dubbed “Project Tiger” and closed to curious onlookers, at the Tahoe-Reno Industrial Center 17 miles east of Sparks.
When grading stopped abruptly last week, the rumors revved up: It meant a no-go for a gigafactory in Nevada. No, it was merely a pause in the prep work. No, the site has gone dark and silent.
“It wasn’t unplanned. They’re at a stopping point, a natural pause, with a different starting element to come,” Lance Gilman, TRIC developer, said Wednesday.
Citing a nondisclosure agreement, he refused to identify the business targeted for the grading work. But he said, “The building got bigger by several million square feet. Some plans have changed. To my knowledge, it’s still an open book. There will be more to come.”
At the Economic Development Authority of Western Nevada, uncertainty, to some degree, has surfaced.
Two months ago, CEO Mike Kazmierski said, “I’m confident we’re on the short list.”
On Wednesday, he was more elaborative and appeared to be hedging his bets as he awaited Thursday’s events.
“While we are on the short list, there may be other offers that will be hard for (Tesla) to refuse. We are a small region and state competing with others that have significantly more to offer,” Kamierski wrote in an email to the Reno Gazette-Journal. “We will win regardless of the outcome as we are now considered a viable option for business and manufacturing in the West as a result of the national media associated with this project.”
At one point, there was doubt whether Tesla would proceed with such a massive undertaking, in size and cost, as the gigafactory.
On Wednesday, Tesla and battery maker Panasonic Corp. announced they had signed an agreement on the battery-making venture. Zacks Equity Research had reported that Tesla will invest at least $2 billion and Panasonic anywhere from $290 million to $1 billion. The rest would come from other as-yet-unknown partners.
But well before that, the competing states, Nevada, Texas, Arizona, New Mexico, began wooing Tesla. Those states — and now California — have formulated plans for millions in incentives, including tax relief. Republican Texas Gov. Rick Perry even visited Sacramento on June 10, arriving at the Capitol in a Tesla Type S, to push his state’s cause.
In Nevada, officials have cited standing policy not to discuss economic incentives for prospective businesses, including what they’re offering Tesla.
Tahoe-Reno Industrial and Reno Stead Airport in Nevada had been considered potential targets for the gigafactory. But TRIC is thought to be the favored choice given the business park’s size, more than 100,000 acres, and rail and highway access directly to the San Francisco Bay Area and Tesla’s car-manufacturing plant in Fremont.
Gilman said his center, located in Storey County, offers prospective businesses a “high-priority” schedule with minimal risk, meaning as few time-consuming impediments as possible from permitting to operation.
“We can deliver a building permit in 30 days or less. That’s almost unheard of in the U.S.,” he said. “We can fast-track building, pouring slab at one end while finishing permitting at the other. It gives a company a lot of confidence in moving forward with a project.”
In the case of “Project Tiger,” Storey County records show a “clear and grub” permit for 2641 Portofino Drive, where a guardpost turned away onlookers, was pulled on May 22 with work to conclude in November.
“There’s a pad out there for somebody,” Gilman said of the business he refused to identify. “Millions of cubic yards have been moved. From start to finish, (grading) took three and a half weeks. That’s unprecedented.”
10 NUMBERS TO KNOW ABOUT TESLA AND THE GIGAFACTORY:
$11.7 BILLION: The net worth of South Africa native Elon Musk, Tesla CEO/co-founder and largest shareholder, according to the Bloomberg Billionaires Index.
$4 BILLION–$5 BILLION: Tesla Motors’ stated investment in the gigafactory, including $2 billion to build the facility.
$49.8 MILLION: How much Tesla Motors Inc. lost in earnings in the January-March period compared with an $11.2 million profit a year earlier.
10 MILLION: The maximum square footage Tesla estimates it needs for the gigafactory. That’s nearly 10 times the size of Amazon.com’s distribution center in Fernley.
500,000: The number of lithium-ion batteries the gigafactory is expected to manufacture a year by 2020.
6,500: The number of employees to work at the gigafactory that, if built in Northern Nevada, would make Tesla one of the region’s top five biggest employers and bigger than International Game Technology.
500-1,000: Total acreage Tesla estimates it will need to house its gigafactory.
1856-1943: The lifespan of company namesake Nikola Tesla, a Serbian-American inventor, electrical engineer and pioneer in the use of electricity who has a museum in his name in Belgrade, Serbia.
2003: The year Tesla Motors Inc., was founded in Palo Alto, Calif.
2017: The year Tesla expects to have the gigafactory open and operating.
AT A GLANCE: TAHOE-RENO INDUSTRIAL CENTER
WHERE: Storey County, 17 miles east of Sparks south of Interstate 80
SIZE: 106,000 acres (30,000 developable); lot sizes 5 to 5,000 acres
OPENED: In 2000 on former Asamera Ranch property
OWNER/PRINCIPAL DEVELOPERS: Tahoe-Reno Industrial Center LLC; Lance Gilman, Roger Norman
BUSINESS PROFILE: Industrial, manufacturing
TENANTS: 164 under 14 million-plus square feet of roof.
MAJOR TENANTS: Zulily; Wal-Mart; Diapers.com; Schluter Systems; Food Bank of Northern Nevada; ITS Logistics; James Hardie; PetSmart; PPG-Pittsburgh Paint; Tire Rack
BUSINESS ACCESS: Interchange with Interstate 80 via four-lane USA Parkway and Union Pacific/Burlington Northern Santa Fe railroad line north of park.
AMENITIES: 30,000-square-foot Store County emergency services center; 300 lane-miles of paved road, sewer, water, power and fiber-optic network; five generating power plants on site with 900+ megawatts of electricity available to park tenants; 100-acre lake that treats water to recirculate.
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Reno Gazette-Journal business reporter Bill O’Driscoll will be listening to the Tesla analyst call Thursday at 2:30 p.m. Follow him on RGJ.com/business and on Twitter with @RGJBusiness.