California on Track to Change Rules For Tesla Gigafactory

When Californian electric automaker Tesla Motors announced its plans to build the Gigafactory — the biggest lithium-ion battery cell production and recycling facility the world has ever seen — its home state was conspicuously absent from the list of potential states the 1,000 acre site could be located.

Despite not being on the original short-list, California is doing everything it can to encourage Tesla to build its Gigafactory there.

Despite not being on the original short-list, California is doing everything it can to encourage Tesla to build its Gigafactory there.

The reasons given for this at the time were California’s notoriously tough environmental regulations and regulatory red tape — but now it appears Tesla might be able to built a Gigafactory in California thanks to a bipartisan bill rapidly making its way through state Senate.

Haunted by a history of heavy pollution, smog and unbelievably poor air quality, modern-day California has some of the most stringent environmental protection regulations in the United States. Covering everything from the car you can drive to the construction of new homes, shops and factories, California’s environmental red tape often means it can take businesses years to obtain the necessary paperwork needed to build a new factory, something which initially put Tesla Motors [NASDAQ:TSLA] off even considering California as a host state for its Gigafactory.

That’s because Tesla, in order to bring its promised mass-market ‘affordable’ third-generation electric car to market by 2017 has to be producing lithium-ion battery cells in the kind of quantities only the Gigafactory can sustain. If it was going to take California months or even years to approve Tesla’s Gigafactory plans, Tesla knew it wouldn’t have the factory up and running in time to hit that 2017 production goal. As a consequence, Tesla’s original short list of potential Gigafactory States read as follows: Arizona, New Mexico, Texas and Nevada.

Senate Bill SB-1309, introduced earlier this year to the Senate as one which required urgent attention, sought to enact legislation “to expedite groundbreaking and construction in California of a large-scale battery factory to manufacture batteries for both electric-vehicle and stationary uses.”

Read for the second time on Wednesday last week, SB-1309 has been re-referred to the Senate Committee on Rules and is expected to pass very soon.

While the bill itself seems vague, Sen. Ted Gaines (R-Roseville) and Senate President Pro Tem Darrell Steinberg (D-Sacramento) say the bill would give the state of California great latitude to make it easy for Tesla to build its Gigafactory in California.

Since Telsa's Fremont production facility is already in California, it makes sense for its Gigafactory to be there.

Since Telsa’s Fremont production facility is already in California, it makes sense for its Gigafactory to be there.

In addition to creating an additional 6,500 jobs in California, siting the Gigafactory in California would also mean that the state won’t be losing out to neighboring rival states for Tesla’s attention.

Incentives to encourage Tesla to stay in the Golden State could include tax incentives, equipment credits and most importantly, an agreement to expedite the planning and approval process for a Gigafactory under the California Environmental Quality Act.

Talking with KQED last week, Sen. Ted Gaines (R-Roseville) was clear he wanted Tesla to stay in Califronia.

“The sad story is that we create it here, and then it often moves offshore or to another state,” he said. “Texas has been famous for picking buisness out of California and I think we ought to fight.”

“The history of Tesla is right here in California,” he continued. “With the Gigafactory we are talking about another 6,500 jobs, middle class jobs, in a state that has an unemployment rate of a million and a half people.”

While Tesla CEO Elon Musk is open about the possibility of building a Gigafactory in California, he described Calfironia’s red tape as ‘complex and lengthy” last week. But, says Sen. Gaines, there are several sites now being considered as potential Gigafactory locations.

Wether Musk will announce one of them as a Gigafactory location by the end of the year however, depends on how much the Californian Senate can bend over backwards to help its most famous automaker.

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  • MEroller

    “to help its most famous automaker.”nshould readn”to help its ONLY (native) automaker.” 😉