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Tesla Appears to Have Chosen Nevada for Its Gigafactory

(Credit: Youtube)

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Tesla Appears to Have Chosen Nevada for Its Gigafactory

Tesla Production Facility

Tesla Production Facility (Credit: Youtube)

Five different states have been competing for Tesla’s favor and the chance to have the upcoming Gigafactory, providing jobs and substantial revenue. While nothing is quite official yet, multiple sources have leaked that a big announcement is coming that the electric carmaker will reveal it is constructing the Gigafactory in Nevada. With big news sources like CNBC and Bloomberg calling the claims legit, it’s pretty safe to say that Nevada is the big winner.

This announcement shouldn’t be too shocking, considering in August a huge plot of land outside of Reno was cleared, presumably in preparation for the construction of the Gigafactory. Considering that the $5 billion facility will contain 10 million square feet of space, hiding that kind of a footprint is pretty much impossible.
The new facility has a future estimated output of 500,000 battery packs a year by 2020. The Gigafactory is absolutely vital to the production of the future Model 3, a car that will be the most affordable and mainstream Tesla yet.

Interestingly enough, a recent report published by Lux Research claims that the Gigafactory will be overkill. The research firm claims that Tesla won’t be able to sell more than 250,000 battery packs each year, which would mean that the rest of the potential production capacity of the factory would be wasted. Such news isn’t too bad for Tesla Motors, believe it or not, but instead could prove to be a tremendous problem for Panasonic, which is the battery production partner for the automaker.

So far, Panasonic is sinking $1.4 billion into the battery production plant, with industry insiders predicting it could make around $15 billion between 2017 and 2020. Of course, if battery production is as low as Lux is predicting, Panasonic would only make about $7 billion during the same period of time. That’s still a healthy profit.
The entire selection process for the Gigafactory site was slowed down to give California lawmakers a chance to strike a special arrangement with Tesla and keep its operations in its home state. Apparently those negotiations have fallen through and so Nevada is reaping the rewards.

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