UPDATES: Reno site closed (7/25/2014). California “closes gap” for landing gigafactory (7/25/2014). Good analysis of the latest (7/25/2014). Tesla earnings call next Thursday, July 31st: expect gigafactory announcement. A different take on the Reno site closure by a local TV station (7/25/2014). From Forbes: All In? Tesla, Panasonic Could Announce Gigafactory Deal This Week (7/29/2014). Reno local TV news on blight of the laid off workers: Layoffs Cost 280 Jobs, Raise More Questions About Secretive Project (7/30/2014). Tesla Panasonic deal: Tesla, Panasonic Sign Gigafactory Pact; Nevada Site Work Already Underway? (/7/31/2014). And Tesla Confirms Reno, NV as One of Several Potential Gigafactory Sites; Tesla on Track for 35k Cars This Year (7/31/2014).
RENO, NV (07/24/2014)–Every so often throughout the day, when Elon Musk’s attention wanders for a moment, he must giggle at the thought of how his company has mobilized thousands of legislators, bureaucrats, local officials, and a myriad of other stakeholders–across five states–all vying to win the “big prize”: a Tesla Motors’ battery Gigafactory.
Most recently popular and industry news articles have centered on California’s effort to secure one of the two or more proposed Gigafactories. Like the state officials sent falling over one another to woo Tesla earlier this year, when it was first announced that Texas, New Mexico, Arizona, and Nevada were the runner ups in the race to secure a Gigafactory , California mobilized its lumbering legislative process to successfully slip language into an already fast-tracked bill which, according to the Wall Street Journal, would allow “local governments to offer property tax breaks to battery manufacturers.”
The Gigafactory is a really big deal, not only because of the $4-5 billion price tag, the projected 6,500 direct jobs it will create, the associated economic activity to support such a facility, and, of course, the local prestige that will signal to investors–like a laser beam–that Tesla’s chosen location is now prime real estate for the next-gen technology innovation boom: but also because static energy storage solutions are the Holy-Grail of the emerging renewable energy powered smart grid. Clearly, the Gigafactory is about much more, in the long-term, than simply manufacturing traction batteries for Tesla’s growing electric vehicle fleet.
Today, however, we can take Nevada out of the running as a possible Gigafactory location.
That’s because I’ve learned, from what I consider to be a reliable sources close to the project, that ground breaking for the Gigafactory began earlier this month at the Tahoe-Reno Industrial Center. More about that in a moment.
High-Tech in the Wild West
The Reno-Sparks Metropolitan area is a region locally known as the Truckee Meadows for the Truckee River that cascades out of pristine Lake Tahoe in the mighty Sierra Nevada and flows east to the landlocked Pyramid Lake at the Paiute Reservation which shares the lake’s name. We call it Reno-Sparks because the once separate incorporated cities of Reno and Sparks have expanded and physically merged together over the years, yet each retains its own governing body.
For some geographic context, Reno, widely known as the “Biggest Little City in The World,” as well as for its more seedy economic activities, such as, quick marriages and divorces, casinos, 24 hour saloons, and legalized prostitution in neighboring Storey County, sits
at the southern end of the vast, mostly empty Washoe County where collectively, coyotes, pronghorn, feral horses, deer, bobcats, bears, panthers, and turkey vultures out number the human population of some 430,000 souls. While 450 miles (724 km) to the south of Reno-Sparks lies Clark County, home of glittering Las Vegas and Henderson, and whose the population is roughly 4.7 times larger than that of its northern neighbor.
Traveling 20 minutes from Reno-Sparks will land you in a number of fascinating localities.
For example, hop in your EV and drive 20 minutes southeast into the mountains and you’ll arrive at the famous mining ghost-town of Virginia City, where a young Civil War dodging, Samuel Clemens, began his illustrious writing career under the nom de plume “Mark Twain” at the Territorial Enterprise.
Just a 20 minute drive to the southwest, into the majestic Sierra Nevada, will bring you to the largest alpine lake in North America, beautiful Lake Tahoe.
And if you travel about 20 minutes east of Reno-Sparks one will find the Reno Technology Park, where Apple recently located an iCloud data center–powered by a 20 MW solar power plant –and just beyond the Apple facility lies the Tahoe-Reno Industrial Center which includes west coast warehousing and manufacturing for companies such as Walmart, Petsmart, Flowers.com, Dell Computers, Toys R Us, Aloca, and Commscope, among many other companies from a variety of sectors including alternative energies to collection agencies.
Why Northern Nevada was a no-brainer for a Gigafactory location
- Northern Nevada is 235 miles (378 km) from Tesla’s homebase in Fremont, CA, along the primary east-west transportation corridors of Interstate 80 and the Union Pacific railroad. Additionally, in the rare instances in which Donner Pass on I-80 is closed to either highway and/or rail traffic, the Feather River Route, some 40 miles (64 km) north of Reno-Sparks, is kept open at all times for both truck and rail traffic.
- If Tesla Motors incorporates their battery manufacturing division in Nevada there would be no franchise tax and no corporate income tax.
- Nevada has no personal income tax.
- Nevada is a right to work state.
- Property prices are very low in Nevada due to the economic boom and bust of the last decade. Nevada was the fastest growing state in the union, and as such, the Great Recession hit Nevada particular hard halting construction while leaving vast swaths of foreclosed properties, empty building stock, and half completed housing and industrial developments. Property values were rock bottom and only in the last year or so have begun to recover.
- Nevada adopted special legislation in 2013 (AB239) to accommodate Apple’s iCloud data center and special regulations were approved by the Nevada Public Utilities Commission for Apple’s 20 MW solar plant. Certain large commercial electric consumers may now enter into a special contract with NV Energy which allows them to mostly power their own facilities with on site renewable energies. This is an important provision given that Tesla plans to largely power their Gigafactory from renewable sources.
- Silver Peak, about half way between Reno and Las Vegas, is home to Rockwood Lithium, Inc. (formerly Chemetall Foote Mineral Co.), a traditional continental lithium brine operation who received a U.S. Department of Energy Grant in 2010 to double its production capacity of battery grade lithium carbonate. Rockwood has further increased its investments in its operations in both Chile as well as Nevada to further expanded operation as well. Water is not a concern, even in the desert around Silver Peak, as the lithium bearing brine is underground and pumped to the surface where the water evaporates to expose the lithium minerals for further processing.
- The unconventional herotite clay start up, Western Lithium Corporation, has successfully demonstrated that they are able to cost effectively produce battery grade lithium carbonate at a site in Northern Washoe County and they are scheduled to go into full production in 2015.
It’s important to note, however, that there’s many more types of elements and minerals that go into building lithium batteries, for example, graphite, copper, cobalt (a particularly problematic material to source), nickel, and bauxite (aluminum). Nevada mines some but not all of those raw materials.
The first location
The speculation was, that if Reno landed a Gigafactory, it would be located at either the former WWII airbase and home of the Reno Air Races, the Reno-Stead Airport, or the Tahoe-Reno Industrial Center.
I never believed the Reno-Stead Airport to be a likely candidate despite what was suggested on the teslamondo.com blog back in May.
While there was ample room to the north and west of the airfield, the area is almost entirely bounded by residential properties. Yes, there’s zoning for industrial buildings in and around the airport and near homes, but not in the only space that would have been large enough for the Gigafactory. Besides, I’m sure Musk would prefer to avoid any clash with local communities. It can literally take years to obtain planning approval for a massive project when there are residential stakeholders involved. NIMBYs and BANANAs are everywhere, a problem that does not exist at the Tahoe-Reno Industrial Center.
Furthermore, locating the factory on the northern portion of airport’s property would have caused the Reno Air Races to relocate. The whole buffer zone in and around the airport are air race tracks laid out for the various classes of planes that race at Reno each September. It’s a very large money event for the region and had the Gigafactory tried to displace the Races you’d easily hear the public and business community’s outcry over the drone of Rare Bear’s mighty Wright R3350 2700-horsepower engine at full RPM.
One factory for now
I also believe, that in the short-term, there will be only one Gigafactory. Intuitively, think about it: Purchase two proprieties in two states; survey and layout the project; pull the permits; and hire a huge workforce to “break ground at two locations.” Really? Sure, it’s a $5 billion dollar project and a few extra tens of millions isn’t a deal breaker. But really, why would you throw away the money?
Having personally dealt with leadership in Storey County, I can understand why Musk may not have had a lot of confidence in them to deliver whatever deals they may have been attempting to broker. And, possibly, it was moment of frustration that caused him to blurt out last April, as Bloomberg reported: “What we’re going to do is move forward with more than one state, at least two, all the way to breaking ground, just in case there’s last-minute issues. The No. 1 thing is we want to minimize the risk timing for the Gigafactory to get up and running.”
Of course, all of that begs the question: Why all of the secrecy if Tesla is only breaking ground in one location? I’ll leave you to speculate on that. as for me, I think Musk was just expertly playing all of the stakeholders for the best deal.
Just the facts, ma’am
So decide for yourself, as my information is speculative, but I feel, that after last night’s excursion to the Industrial Center, I’m 99 percent certain that I’ve identified the Gigafactory site in Northern Nevada which is, at this moment, under construction. Here’s the sequence of events that lead me to such an assessment.
Last Friday (July 18th) a friend offhandedly mentioned to me that her friend had said a neighbor was “all kinds of excited” because he’d just landed a job breaking ground for a big battery factory project at the Tahoe-Reno Industrial Center. He told his neighbor, that’s my friend’s friend, that they are looking for lots of help out there as well.
I contacted my friend’s friend directly to see if I could learn more and to find out if I could possibly talk to the guy. I found out that they had had their conversation over a week ago and that work had already begun. Everything she told me strongly suggested that the groundbreaking was for the Gigafactory. And he also had mentioned it was for Tesla when I asked my friend’s friend if he had used that name.
On Sunday, July 20th, I decided to take a drive out to the Industrial Center to see what I could find out. I had been out there a couple of months earlier attempting to see if I could locate a potential site based on Tesla’s artist conception for the factory. I had no success. There was one location that looked pretty good but showed no sign of being readied for construction activities. However, on this trip I was surprised to find a huge site under vigorous construction with no less than fifty large elevation scapers, graders, loaders, and bulldozers leveling a building pad–and on a Sunday no less.
According to Tesla, the Gigafactory will be 10 million square feet (929,030 square meters) with one or two levels.
A single level building that size would be slightly over half a mile (.80 km) long on each side if it were a square. So if a large portion of the building were two levels, the factory would be something under a half mile long but no less than a quarter mile (.4 km) long on a side if it were a square.
The point of the foregoing exercise was to establish just how big the footprint of the Gigafactory might be according to Tesla’s blog. For comparison, a quarter mile is 4.4 football fields or 440 yards (402.3 meters).
Both ends of the construction site were heavily guarded so I had to locate a nearby prominence I could climb and from where I could shoot a few photos.
Most companies proudly announce their expansion by posting signs at their construction site. The gigafactory site sports the cryptic “Project Tiger.” Could that be an anagram for Erg It? “Erg” is a unit of mechanical work. (7/22/2014)
Strangely, when most companies plan and build a facility, they send out press releases and proudly post big signs on their property proclaiming “Future Home of XYZ Company.” However, the Gigafactory location is marked mysteriously as “Project Tiger.” Among the expected “no trespassing” signs hanging on the fence, there was another curious sign which simply proclaimed: “Get To Work.” Over on the Tesla Motors forum one commenter felt Tiger was perhaps an acronym. Maybe. I ran an anagram of “Tiger” and came up with “Erg It.” For those who remember their physics, an erg is a unit of mechanical work, thus, could “Project Tiger” be code for Project “Work It”? There seems to be a sense of urgency on the project based on the signs and one source close to the project as we’ll see in a minute.
Before I left the Industrial Center I stopped at a nearby sandwich shop. While the young lady behind the counter was building the sandwich I had ordered, and before I could ask what the big project was down the road, a Storey County fireman walked in and order a sandwich as well. And hot on his heels, three construction workers came through the door and ordered food. Since there was no subtle time to pop my question I just blurted it out to the whole crowd, “So does anyone know what that big project is down the road,” I asked.
The gal behind the counter said she had heard it was a big secret, a warehouse or something.
The fireman just said no with a looked that suggested he knew much more than he was letting on.
The construction workers, in typical construction worker humor, simply said there’s nothing down that road and if I went down there I’d disappear into a black hole. Pressing them, they said it’s top secret and they’d have to kill me if they told me.
Like an idiot, I failed to ask them if it was the Tesla Gigafactory to see what there reactions might have been. Oh well, I did ask people directly on subsequent trips to the site as you’ll see shortly.
Arriving home with my photos I resumed work on this article. I was writing it for Greentech Media and wanted to get it submitted soon. Emailing the editor, I told him what had occurred during my site visit. About an hour later he mailed me back asking if the location I had photographed had anything to do with the “2641 Portofino Drive location.”
Having not obtained the address out there I Googled “2641 Portofino Drive” and found that the teslamondo.com blog had posted a piece on July 21 about the Gigafactory location. And my local paper, had mentioned the 2641 Portofino Drive location way back on June 9th, stating that, a “‘clear and grub’ permit was pulled on May 22 to move 140,000 cubic yards (107,038 cubic meters) of dirt in preparation for the unnamed project.” I had not seen either story.
Clearly, 140,000 cubic yards is a fair amount of material. If laid out in a square, one yard deep, each side would measure 374.2 yards (342.2 meters) long. According to sites on the Internet “clear and grub” means removing surface debris in preparation for construction. So clearly, as we can see from the photos, the construction site is well beyond the “clear and grub” stage. Other permits must have been pulled since the June 9th report in the Reno Gazette-Journal. (Also, if you look at the photos you’ll note they are removing a lot of material from an alluvial fan on the far side of the of the construction area.)
On Tuesday, Greentech Media published their article–but with my photos–of the suspected Gigafactory site. This piece was too lengthy for them and they weren’t interested in the local color, context, and details I’m providing here. I had asked them to wait in publishing their version, but they went ahead as they felt there wasn’t enough evidence to say categorically that the 2641 Portofino Drive location, mentioned earlier by the Reno Gazette Journal and teslamondo.com, was the Gigafactory site.
However, after my trip to the site on Tuesday and again at 1:00 a.m. on Wednesday morning, I can say with certainty, that the large construction site at the end of Portofino Drive in the Tahoe-Reno Industrial Center is the much anticipated Tesla Motors’ battery “Gigafactory.”
- I have personally talked to over a dozen people out there now. About a third of them didn’t know what I was asking about or only had a vague notion that a large “special” project was underway at the Industrial Center. Another third said the project was top secret and could say no more even when pressed. And the final third–unequivocally said–it was some sort of big battery factory, for electric cars they had heard. It was funny how almost none of them knew the name of the company, but when I asked, “Does Tesla ring a bell?” they all said, yes, that’s the company. The people I talked to ranged from convenience store clerks to constructions workers, some working on Project Tiger, others working on other projects at the Industrial Center and, in some cases, for companies other than the outfit who appear to be the general contractor on the Gigafactory.
- When I arrived home after my midnight / early morning surveillance of the Gigafactory site I had an email from my friend’s friend who had initially talked to the guy that allegedly was working on Project Tiger. He was not “at all” willing to talk to me after he found out I wanted to write an article about the project and she reported that he said, “It is the largest new building project in the country. They want it kept quiet to keep looky-loos away so they can get their jobs done. They are behind schedule.” (Interesting tidbit there, eh?)
- The project site is certainly large enough for the Gigafactory.
- The security and secrecy are everything we’d expect from Tesla.
- And, as I outlined earlier, Nevada seems like the best place. Close to Fremont. Low cost. Few regulations. Nearby lithium resources, and so on.
While it’s true that we don’t have an official announcement and we don’t have records showing Tesla Motors as the property owners (something easy to disguise in Nevada, nevertheless, I do have the parcel numbers and plan to go up to Virginia City next week to see what I can find out), what do you think: Gigafactory site or not?
Bob Tregilus is a long time resident of Northern Nevada where he established a chapter of the Electric Auto Association in 2007. He is also an energy policy wonk and has worked at the local and state levels on renewable energy and electric drive transportation legislation and regulations. Bob is the former co-host of the This Week in Energy netcast and presently produces and hosts of the Plug In America Show. You can contact Bob through his website at ThisWeekinEnergy.tv.
Some additional photos: