Tesla Gigafactory could be built in Texas
Tesla announced today details of its planned Gigafactory. The factory will build electric car battery packs to power Tesla's vehicles. It may also build other types of energy storage media, perhaps for use in factories or the power industry. Tesla says that the plan has two main goals. First, to create more battery capacity by 2020 from this one factory than all the world produced last year. Second, to reduce battery costs by 30%. In what could seem like an inside joke to the Teslerati, the company announced four finalist states in which the factory might be built. Texas, the state that has prevented Tesla from selling its cars directly, is included.
Tesla is trying not to repeat mistakes made by legacy automakers. One thing it wants very badly to do is avoid using car dealerships. Tesla feels it does not need them and that their direct sales model is superior to the distribution model that every other automaker uses, and is forced by states’ laws to use. Its direct sales and service network is currently a big advantage for Tesla. Texas however, has not seen things Tesla’s way and the automaker cannot sell its cars through factory stores in the state.
This begs the question, why would Tesla reward a state with huge employment and revenue opportunities that has fought against it? The Tesla factory is expected to employ about 6,500 people directly. Local business and other suppliers that support the factory could add three times that number of jobs. It would be a huge benefit to any state in which it is built.
One answer could be that Tesla is a pragmatic. Texas has a lot of wind energy and Tesla plans to power its battery factory with renewable energy. Wind power is created both day and night. Texas is a world leader in wind power.
Another answer could be that leveraging a big benefit to the state's economy may sway legislators' and citizens’ opinions about Tesla’s sales model. So maybe it is a ploy.
Our opinion is that it is not a ploy, not a joke, and that Tesla is seriously considering Texas. The state is a non-union, business-friendly, auto producing state (Toyota makes all its US market trucks there), that ran with wind energy while states like Massachusetts fought the clean energy. Texans also have a can-do attitude and know how to make things happen. Tesla built its Supercharger network through Texas despite the sales issue. To steal a phrase well known in the state, “Tesla isn’t from Texas, but it got there as quick as it could.”
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Screen-shot image shown courtesy of the Tesla public information page.