US electric-automaker Tesla Motors Inc is to build the world’s largest lithium-ion battery plant in Nevada, the state’s governor announced on Thursday, unveiling plans for the US$5 billion “Gigafactory.”
The plant, plans for which were announced in July with Japanese electronics giant Panasonic Corp, is set to bring nearly US$100 billion into Nevada’s economy over the next 20 years, he said.
It would employ 6,500 workers directly and another 16,000 indirectly, and add about 4 percent to the state’s GDP, Nevada Governor Brian Sandoval said, in what he called a “historic day” for the US state.
“[The deal with Tesla] will change Nevada forever and set in motion the creation of thousands of new jobs and stream billions of dollars into our economy,” he said, at a ceremony with Tesla chief executive officer Elon Musk.
“No need to say that this is a significant, historic day for all of us,” Sandoval added, while saying that the deal is subject to legislative review and approval.
When completed, he said, the plant would be the “world’s largest and most-advanced battery factory.”
Nevada was in competition with four other states bidding to host the factory: California, Texas, New Mexico and Arizona.
The state has pledged a tax incentive package worth some US$1.25 billion over 20 years, according to the local Reno Gazette-Journal newspaper.
“This is a Nevada victory,” said Sandoval, who did not comment on tax incentives. “We knew that this was an opportunity that we had to fight for.”
Tesla plans to run operations at the Nevada plant while its Japanese partner is to make battery cells destined for the plant and invest in equipment and machinery, according to a joint statement released at that time.
Japanese media previously reported that Panasonic would invest as much as ¥30 billion (US$290 million) in the plant.
While Tesla produces relatively few vehicles, it has become a star in the sector due to keen demand and a reputation for high quality.
A surge in its share price over the past year has pushed its value over US$27 billion.
Tesla’s Model S sells for around US$75,000, but it is working on a less expensive Model X that is expected to garner wider appeal.
In July Panasonic and Tesla said the plant should drive down the cost of batteries and eventually help popularize electric vehicles. The Gigafactory is to produce battery cells, modules and packs for Tesla’s electric vehicles.
“[It should] enable a continuous reduction in the cost of long-range battery packs in parallel with manufacturing at the volumes required to enable Tesla to meet its goal of advancing mass market electric vehicles,” the joint statement said.
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