Tesla Motors Inc (TSLA) Wise to Choose Logistics Over Incentives for New Gigafactory Home

Tesla Motors Inc (NASDAQ:TSLA) has officially confirmed that the site in Nevada that has been breaking ground in anticipation of being the home of Tesla Motors Inc (NASDAQ:TSLA)’s $5 billion Gigafactory will indeed host it. As Rep. Mark Amodei (R-Nev), explained on CNBC today, Nevada was the perfect choice for the battery factory’s location, not only due to incentives, but also prime logistics.

Tesla Motors Inc (NASDAQ:TSLA)

“The other thing that helped really was, when you look logistically in terms of proximity to lithium, which is a big deal when you’re building these batteries; proximity to their California manufacturing plant, other things in Nevada: the no-inventory tax, things like that, it was the place where they should’ve come,” Amodei said.

Additionally, Amodei praised Tesla Motors Inc (NASDAQ:TSLA) for not simply going after the greatest incentives package, but rather for making the choice that made the most sense logistically for their company. The Nevada incentives package is said to be in the $400 to $500 million range, which is rumored to be the minimum investment Tesla Motors Inc (NASDAQ:TSLA) was seeking from their chosen state government.

However the packages from the other states (which included California, Texas, New Mexico, and Arizona) may ultimately have amounted to greater incentives packages. The Gigafactory is a coup for Nevada, and is expected to generate 6,500 jobs in the state once it’s running at full battery making capacity sometime around 2020.

The Reno site’s proximity to the lithium mine in Silver Peak, Nevada, the only active lithium mine in the U.S, was likely one of the biggest factors in their decision. Lithium is a hazardous product, which makes transporting it a concern at all times.

Interestingly, the Associated Press has reported that Tesla Motors Inc (NASDAQ:TSLA) will still consider a second site as a backup, either in the event something falls through with the Nevada site or incentives, or even as an eventual second factory location should the need arise.

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