Tesla chooses Nevada for battery 'gigafactory,' source says

Tesla Motors has chosen Nevada as the site for a massive, $5 billion factory that will pump out batteries for a new generation of electric cars, a person familiar with the company's plans said Wednesday.

The person, who spoke on condition of anonymity because no official announcement had been made, said work would soon resume at an industrial park outside Reno.

Four other states were vying for the project, and the estimated 6,500 jobs it will bring.

Nevada Gov. Brian Sandoval's office said only that the governor would make a "major economic development announcement" Thursday afternoon. A spokesman for Tesla, based in Palo Alto, California, said company representatives would be at the Capitol for the announcement but offered no other details.

The other finalist states were California, Texas, Arizona and New Mexico.

Tesla has done site-preparation work at the Reno Tahoe Industrial Center but had not publicly committed to building in Nevada, instead asking other states to put together their best packages of economic incentives.

States competing for the Tesla site have offered up a litany of fiscal incentives for the electric automaker, which has drawn the ire of budget watchdogs in several states. As Stephen Edelstein wrote for GreenCarReports last week,  policy analysts and citizens are concerned that states are engaged in a "race to the bottom" to get the factory--with Tesla the only possible winner: 

In an open letter, budget watchdogs from the five states--Arizona, California, Nevada, New Mexico, and Texas--say the competition for the gigafactory amounts to a "public auction," with the opening bid set at $500 million.

Tesla previously indicated that it expects the winning state to offer at least that amount--10 percent of the gigafactory's estimated total cost--in incentives.

With economic growth remaining slow, states appear eager to pony up that amount--and possibly more--to secure the 6,500 manufacturing jobs the factory is projected to create.

Manufacturing jobs are more desirable for states because they generally pay more than service-industry jobs.

However, the analysts suggest that spending money on a single Tesla project would produce lower long-term jobs than spreading it around to many different projects.

The signers, led by Good Jobs First--an advocacy group based in Washington, D.C.--claims states risk devoting too many resources to luring Tesla, at the expense of other necessary investments (like infrastructure and education) that more broadly benefit the economy.

CEO Elon Musk said he would prepare two sites, in case one falls through.

The person familiar with Tesla's plans told The Associated Press that a second site would still be prepared, in case Nevada is not able to deliver the incentives it has promised €” or possibly to build a second factory.