Why Nevada Is the Frontrunner for the Tesla Motors Inc. Gigafactory

Forget Texas, Nevada could now be the frontrunner for the Tesla Motors Gigafactory.

Apr 22, 2014 at 11:01AM

Four states are in the running for Tesla Motors (NASDAQ:TSLA) multibillion-dollar Gigafactory (link opens a PDF), including Arizona, Texas, New Mexico, and Nevada. As much as $5 billion dollars and 6,500 manufacturing jobs are at stake. It makes sense, then, that Tesla is using this massive factory as an opportunity to help convince states like Texas and Arizona to allow the electric-car maker to sell its vehicles directly to consumers in those states. As it stands, Tesla's direct sales model is currently banned in Texas and Arizona.

Texas is a particularly important state for Tesla because it is the second largest and most populous state in the United States. Down the road, it would be hard for the company to achieve its goal of selling 500,000 zero-emissions cars annually without being able to sell its vehicles in Texas. However, despite the obvious benefits for a Tesla Motors plant in Texas, it seems that Nevada could now be the frontrunner in this $5 billion arms race.

Why Nevada?
In an interview with Bloomberg, Matt Hardigree of Jalopnik.com says Nevada is most likely in the lead for Tesla's planned lithium-ion-battery factory. As Hardigree points out, Nevada has a railroad line that connects directly to Tesla's Fremont, Cali., assembly plant. This could play a critical role in the final decision because, ultimately, Tesla will need to transport hundreds of thousands of heavy batteries from the Gigafactory to its assembly plant in California.

Another reason that Nevada seems to make the most sense these days is because the state is rich with lithium pools -- one of the key elements Tesla needs to make its battery cells. In fact, Nevada is the only state in North America with a lithium producing mine today. Lithium demand in this country is growing at breakneck speed, with demand for industry-grade lithium expected to top 320,000 tons by 2020, up from just 102,000 tons in 2010.

These two factors, together with the fact that Nevada is home to the world's largest solar power plant, could make it the new home of Tesla's Gigafactory. Making its massive battery factory both green and self-sustainable to as great an extent as possible is a priority for Tesla. Moreover, the company's chief executive, Elon Musk has already said the plant will be solar and wind powered. While Texas would be a better location for wind power, the arid conditions in Nevada make it ideal for solar power generation.

Screen Shot

Source: Tesla Motors

From its direct rail line and lithium mines to the state's sun-filled landscape, Nevada looks like the ideal place for Tesla Motors to build its massive Gigafactory today. Moreover, Tesla needs to make a decision soon if it plans to begin construction on the factory before year's end.

Tesla Motors has achieved what many thought impossible for a start-up automaker
It's this type of drive for innovation that's earned Tesla its spot as one of The Motley Fool's top growth stock picks of 2011. Motley Fool co-founder David Gardner has proved the naysayers wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. That's why I encourage you to take advantage of this free offer to get his scientific approach to crushing the market as well as his 6 stock picks for ultimate growth in 2014. Click here now for free access, for a limited time.


Tamara Rutter owns shares of Tesla Motors. The Motley Fool recommends Tesla Motors. The Motley Fool owns shares of Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers