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Tesla’s New Battery Plant Won’t Be in California

California is out of the running for Tesla’s new $5 billion battery plant. Los Angeles Times:

California loves Tesla Motors.

The Palo Alto electric car maker’s Model S sedan is the state’s new eco-luxury status symbol. Californians bought more than a third of Teslas sold globally last year. Residents of the state pack the order list for Tesla’s next offering, a sport utility vehicle.

California pollution-control policies enable Tesla to rake in tens of millions of dollars each year from selling environmental credits to other automakers — a key source of Tesla’s revenue.

But is this a case of unrequited love? When it comes to building a $4-billion to $5-billion battery factory that will employ 6,500 workers, Tesla is shunning the Golden State.

The automaker is looking at 500- to 1,000-acre sites in Arizona, Nevada, New Mexico and Texas. Although the location hasn’t been determined, Tesla has crossed California off the list. The company declined to comment on the reasons.

State officials aren’t saying much either. A spokesman in Gov. Jerry Brown’s administration said the state presented a proposal to the automaker with several possible sites, but that the automaker didn’t bite.

Brown’s office provided no other details.

“The Governor’s Office of Business and Economic Development maintains a strong partnership with Tesla and continues to work with them on future opportunities in California,” the office said in a statement.

When Tesla’s “gigafactory” opens in about three years, it will be large enough to manufacture more lithium-ion batteries than the entire industry produces now. The automaker said it expects the advanced technology plant will slash the cost of the battery packs for its cars by almost a third, enabling Tesla to introduce a car that will sell for roughly half of its $70,000 to $100,000 Model S sedan.

Cost and politics are the two biggest reasons Tesla is looking elsewhere.

Land prices alone make a project of this scope more expensive than in the other states, said Michael Bernick, the former head of California’s Employment Development Department. Wages are also higher than in the other regions, he said.

“Tesla should have no difficulty finding skilled workers wherever it locates,” Bernick said.

The rest here.



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