Intense Bidding War Expected Among 4 States in Running For Tesla Giga Factory

MAR 7 2014 BY ERIC LOVEDAY 23

With its recent giga factory announcement, Tesla Motors revealed that 4 states are in the running for the battery factory that will employ ~6,500 individuals.

Giga Factory

Giga Factory

As expected, a factory of this size will start a bidding war among the states.

Dennis Cuneo, president of DC Strategic Advisors LLC, stated:

“This would rank as the most attractive industrial project out there.”

All 4 of the states in the running are expected to present some lucrative incentives to Tesla Motors.  The goal will be to bring Tesla there by one-upping the other states.

Tesla says that it has yet to begin negotiations with any of the states, but we’re certain that those 4 states are already seeing what sort of package can be put together to lure Tesla in.

Cuneo adds that the giga factory will “draw interest” from many other states beyond the 4 that Tesla listed.  There will be “robust competition” and “incentives are probably going to be a big factor” says Cueno.

Harley Shaiken, a labor economist at the University of California, Berkeley, adds:

“Without question there will be a very intense bidding war—$5 billion is a breathtaking figure.”

It’s not just the jobs that will lead to the bidding war though.  Shaiken says that a state will want to be able to say that they were part of the “research and development related to this” too.  Like bragging rights, sort of.

Source: Automotive News

Categories: Tesla

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23 Comments on "Intense Bidding War Expected Among 4 States in Running For Tesla Giga Factory"

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If I were Tesla, I would offer to Texas if they would lift the ban on sales.

If they choose Texas I will sell my MS. As a share holder and owner Tesla will let me down if choose a state with politicians than gladly will enjoy Tesla demise.

“If they choose Texas I will sell my MS. As a share holder and owner Tesla will let me down if choose a state with politicians than gladly will enjoy Tesla demise.” –MDEV

MDEV, quit being such a defeatist. Honestly, do you think Texas would want Tesla to fail if Tesla built a $5 Billion mega factory with thousands of jobs in their state?

I was thinking the same thing. It would be a win-win. Tesla needs the sales in Texas as we are a huge state with a large population. Just because our politicians are jack-asses doesn’t mean there aren’t plenty of potential customers here.

Guess those other states need to quickly introduce a ban on Tesla’s retail model too, just to level the playing field with Texas.

I was actually hoping that Tesla itself wouldn’t pit one site against another, since that would be kind of petty and grasping and bad PR. Tesla is nicer than that, in my mind. As far as I’ve read, that remains the case.

It’s unavoidable that the states would compete on their own, however. Let’s hope they don’t eliminate any economic benefits to their citizens by giving away the store.

Why wouldn’t they build in a closer location such as California? In the desert, by Mojave, the race track areas. They could put up some more windmills. Easy access to rail. Good work pool supply from the Palmdale/Lancaster area, etc.

Cuneo adds that the giga factory will “draw interest” from many other states beyond the 4 that Tesla listed.

I saw in another article about an official from Michigan stating that there were a bunch of empty battery factories around the state. He was saying that Tesla didn’t need to build a Gigafactory, but you knew he meant that he would want Tesla to come in and use their empty battery factories.

Michigan would not be the best place to put a huge solar array at least compared to the other 4 states mentioned. Plus more cost of delivery to freemont for the batteries. Its also much farther from japan btw…

I totally agree. It just highlights the truth of the statement in the article that states that are not in the running, will try to get in the running or at the very least try to show why they should have been.

And of course tax n’ spend California is out.

I don’t think Tesla needs to tie site selection to removal or absence of restrictive deal laws. Any politician that has that factory in their state will have no problem with their sales model.

As to site selection, Tesla will pick the site and state that gives them the best incentives. Regardless if you think Tesla is “too nice” to do that, they would be stupid not to. I want to see Tesla succeed and success means keeping a close eye on the bottom line. Yes, there is a moral compass that is needed to avoid things like toxic waste dumping, child labor and the like but I don’t think that extends to tax incentives.

Yep. It’s a publicly traded company. They have a fiduciary responsibility to the shareholders to maximize their value. Yes, in some cases that means being the nice guy, but only when that too means maximizing shareholder value.

Do they have a fuduciary responsibility to not run the company in the ground in the long term for short term gains that pay the CEO a big bonus and supplies a great golden parachute? Because if that were true nearly zero CEOs would be fudiciarily responsible. In other words, is it get rich quick or is it be stable for the long term. If they fail to keep a company going because they took some stupid gamble or made a mistake that punishes all that come after them, can we then seek compensation. I say this because I believe that most corporate failures are due to mismanagement.

I don’t disagree with you at all. However, the answer to the question of the article is based in facts, not desires. Yes, I agree it is more often than not a fact that the demise of many a business is due to short term vs. long term vision. No doubt. However, given the present situation: IF (and a post further down gives some good reasons why it won’t be so) Texas were to reverse its dealer restriction in exchange for the factory and the resulting other options made it at least equal to, if not less in cost to produce batteries there, then… it is possibly the right move in both the short term AND the long term. Many assumptions in there. I don’t like how financial pressure has resulted in Big Agriculture which in turn gives us short term monetary savings over long term health (both ours and the environment). I don’t like Prop 13 here in California which has basically gutted our schools resulting in short term ‘gain’ over serious long term loss. I don’t like a lot of things. My, and I believe SeattleTeslaGuy’s points though are that there are facts on the ground, one of… Read more »

This kind of thinking is exactly what’s wrong with our country. Placing money at the top of the priority ladder when there truly are very important social, health and safety issues to consider for the benefit of the company and its workers. For example; The safety of people in a state where you can openly carry guns, where poison air pollution is treated in a cavalier fashion as the rotten egg smell of success. where there are 75 mph night time unsafe speed limits on two lane roads, the Government can usurp the right of a woman to make her own health decisions and the state suppresses free enterprise by protecting selected business against competition. In effect Tesla would be condoning these conditions and practices by building in Texas. That would be shameful.

I don’t disagree with you. However, it’s still a publicly traded company. Social/environmental/etc decisions CAN add value to the shareholder over financial concerns. Sometimes they do, sometimes they don’t. When they do, great.

However, I fail to see how people would be less inclined to buy a Tesla 10 years from now because their battery plant is in Texas instead of Arizona. Especially since far more buyers of Tesla’s premium cars will live in Texas instead of Arizona.

Thus, if you believe in the electric car vision, and the health of Tesla as part of that vision, you have to at least consider that putting it in Texas is a viable option. And I don’t like Texas’ politics either.

Wow, you get the mega-liberal of the year award.

Not a Liberal, an old Eisenhower Republican who votes independent…just think it’s time we stop putting money first and try to recover a little democracy back in our society.

In my opinion the Texas Government is the worst in the U.S. because they don’t care about the welfare of their citizens, just their Oil Industry.

Do you want the government to change your diaper too… get off your liberal wining soap box please.

The Texas legislature will not be taking up the law that restricts Tesla from making sales for how long? Six to nine months? Texas is out of it. Those branch-water and whiskey, cigar smokin’ fat cats, owned by the Texas AA, have burned down the barn to get rid of rats. They are out it in other words cutting themselves out of the herd, due to their own arrogance and the wish to keep all their marbles. They won’t lose any, but they won’t gain any either. I think there were enough homespun platitudes there to choke a horse.

Hahahha.

Tesla is a genius and those states are idiots…

By “baiting” the state with so called 6,500 jobs, Tesla is seeing which state is willing to put up the money upfront to pay for part of that factory by offering huge incentives…

Elon is a genius…

A typical assembling factor hire about few thousands of people and those SE states typically kick in few hundreds of millions to “win over” business like what happened with MB in AL, VW in TN, BMW in SC and Hyundai/Kia in GA…

But this will kick into another level!!!

Why would you think the 6,500 figure would come true? Most of the battery construction and making aren’t labor intensive and it is far cheaper in the long run to have automation taking care of majority of the process, especially if the volume is expected at what Tesla is claiming…

The factory will be lucky to have 3,000 jobs at its peak….

Much of the discussion elsewhere on this topic has seen NEVADA as the “best choice.” Certainly Nevada seems to have a number of advantages over any of the other three: 1. Closer to Fremont for shipping/supply lines; 2. Closer to ports for supplies from/to Japan and the Far East
3. Closer to actual lithium mines, at least as I understand these locations, and 4. Both a “pro-business” political/tax climate AND a good pool of potential employees.