Recently, the state of Nevada was crowned winner in Tesla’s search for a suitable host state for its first lithium-ion battery reprocessing and manufacturing Gigafactory. But while Reno, Nevada might be home to the first Tesla Gigafactory, Tesla CEO Elon Musk has hinted that Tesla will eventually need more than one Tesla Gigafactory to produce enough low-cost lithium-ion battery cells to keep up with Tesla Model S, Tesla Model X, Tesla Model ≡ and any future Tesla electric car models yet to be unveiled.
Like an athlete who has just missed out on a podium place in an important race, the state of California is already in training to win the next race and become home to Tesla’s next Gigafactory.
As the Silicon Valley Business Journal reported last week (via Autobloggreen), a number of Californian Congressional leaders are already lobbying Tesla to consider California as a suitable place to build the next Tesla Gigafactory — Gigafactory 2.0, if you will — by writing a letter to Tesla CEO Elon Musk.
Spearheaded by Congressmen Paul Ruiz, Mike Honda and Jim Costa, the letter makes a passionate plea for Tesla to put California at the top of its list of future Gigafactory states, citing California’s skilled workforce, exemplary environmental record, and commitment to renewable energy and green transportation. While the three Congressmen are the driving force behind this California Congressional Delegation however, the letter also carries the signatures of twenty-one other Californian legislators keen to see Tesla bring a Gigafactory to California.
“The California Congressional Delegation encourages Tesla Motors to bring the next state-of-the-art Gigafactory to our state,” the letter begins. “California offers tremendous advantages to business, including our diverse, highly-educated workforce, a high quality of life and an array of abundant renewable energy resources and consumer incentives found nowhere else in the United States.”
Highlighting Tesla’s high sales rate in California — one third of last years’ total production of Model S cars ended up in the Golden State — the letter carefully emphasises California’s commitment to plug-in vehicles and green technology, along with its consistent high ranking when it comes to U.S. energy efficiency.
With Tesla’s main automotive production line based in Fremont, California, building a Gigafactory nearby makes perfect sense, the delegation seems to imply.
But while the idea may work on paper — a Californian Gigafactory within easy reach of Tesla’s Fremont facility would certainly cut down on transportation costs and CO2 emissions — California’s tough environmental policies and notorious bureaucracy make building any new factories particularly arduous and time-consuming. However, when the state of California became a late-entrant in the race to become the first host state for a Tesla Gigafactory, California Governor Jerry Brown did promise to work alongside Tesla and the Californian legislature to cut any necessary red tape needed to expedite Gigafactory construction, as well as match the $500 million incentive package being offered by New Mexico, another Gigafactory state finalist.
Should Tesla choose to look at California in the future, we’d guess those offers would still hold true, yet we’re also expecting it to be some time before Tesla executes any form of overt hunt for a suitable location for building the Gigafactory 2.0.
For a start, Tesla’s first Gigafactory hasn’t even been built yet, and while construction is now well and truly underway on the 1,000 acre facility in Reno, NV., it’s going to be several years before the Gigafactory is ready to produce its first lithium-ion battery packs.
In the interim, Tesla has to not only fund the remainder of Gigafactory construction — a total of more than three billion dollars even after accounting for the estimated $1 billion investment from Gigafactory partner Panasonic and $1.25 billion tax breaks and abatements from the state of Nevada — but also finalise and fund the continued pre-production processes for its Model X Crossover SUV, which is due to enter into production early next year.
In short, even if it wanted to, we can’t see a way in which Tesla could fund the search for, or construction of, a second Gigafactory until at least 2018. Unless there’s something Elon Musk knows that we don’t.
It’s no surprise then that Tesla remains quiet on this particular story and the open letter to its CEO Elon Musk. But while Tesla won’t comment on a second Gigafactory, Musk has gone on the record multiple times to predict a future where more than one Gigafactory will be needed by the Californian automaker. And given Musk’s driven vision of affordable, electric cars for all, anything is possible.
There is one thing we can say for sure however: California can’t be faulted for a little bit of forward thinking.
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