Tesla will build $5 billion battery plant in Reno, AP source says

On Wednesday, a source speaking with the Associated Press said that Tesla has chosen an industrial plant outside of Reno, Nevada, to be the location of its $5 billion battery factory. The factory, which will be built in conjunction with Panasonic, will produce batteries for Tesla's forthcoming Model 3 line of low(er)-cost electric vehicles.

The AP's source spoke anonymously because no official announcement had been made. That source said that work on the factory will begin soon and that “Nevada still must approve a package of incentives Tesla negotiated.” Nevada Governor Brian Sandoval is scheduled to make a "major economic development announcement" tomorrow afternoon, and Tesla representatives say the company will be present.

Ars contacted Tesla about the report, and a spokesperson wrote, “We continue to work with the state of Nevada and we look forward to joining the Governor and legislative leaders tomorrow in Carson City. More details to come tomorrow at 4 PM Pacific.”

Many states have been jockeying to be picked as the home of Telsa's billion-dollar project. The company estimates that it will hire 6,500 people to staff the factory. Earlier this summer Tesla began surveying the location in Reno, but it hadn't committed to building its factory there, and, as late as July, Tesla representatives had said they were “impressed” with an incentive package that California lawmakers had put together to bring the Gigafactory to the state. Municipalities in Arizona and Texas even made bids asking Tesla to build its Gigafactory in those states, despite those states not legally allowing the company to sell its electric vehicles directly to consumers from a storefront. (Those states require that cars be sold from a dealership, which is a sales model Tesla won't consider.)

Tesla will still prepare a second site in addition to the Reno one, the AP's source specified, "in case Nevada is unable to deliver the incentives it has promised—or possibly to build a second factory."

The Governor of Nevada has not said anything about the kinds of incentives the state has offered Tesla. As the AP reported, “based on Musk's public statements of what he expects a winning bid would be worth, the incentive package likely will total at least $500 million. Sandoval would have to call a special session of the state Legislature to approve tax breaks, grants or other incentives of that magnitude.” Nevada is in a unique position to offer Tesla low tax rates and infrastructure to provide sun, wind, and geothermal power, as well.