Initial public mention of the gigafactory concept was made in November 2013, although Tesla's internal plans predated that; Tesla had investigated almost 100 sites. In July 2014, it was announced that
Panasonic had reached a basic agreement with Tesla to invest in a factory, estimated to cost $5 billion. and that Tesla would not expand beyond original plans. In early 2016 Panasonic president
Kazuhiro Tsuga confirmed a planned total investment of about $1.6 billion by the company to equip the factory to full capacity. However, after
the number of Model 3 reservations became known in April 2016, and announced a
bond sale for $3.86 billion, most of it to be invested in Gigafactory.
Factory location Tesla initially considered several sites, but northern Nevada was not one of them. A manager at
Reno–Tahoe International Airport offered some of its 3,000 available acres at
Reno Stead Airport, and persuaded TRIC owner to split the bill for a private jet to fly Tesla people to the area. They tried several times, and Tesla eventually came to TRIC and was pleased by the speed of
regulatory work.
State competition and incentives At least five
states competed to attract Gigafactory by offering tax abatements, tax credits, cash grants or other incentives: California, Arizona, Nevada, New Mexico, and Texas.
San Antonio, Texas was seen as an early leader for offering bigger incentives and for being a state with a sales tax exemption on manufacturing equipment purchases. Overall, states with favorable sales tax regulations were seen as topping the list of preferred sites. After sticky negotiations, Additionally, the owners of TRIC agreed to give Tesla 1,000 acres for free, about 35% of the the company needed. The incentives package included $195 million in transferable tax credits depending on Tesla's investment in the state and job creation, similar to the
Volkswagen Chattanooga Assembly Plant deal and others. Tesla's investments earn them about $10 million in tax credits per quarter, and by July 2016 had sold these for $20 million cash. At the end of 2016, Tesla and Panasonic had 477 employees and 5,591 construction workers, mostly Nevada residents, and invested $1.1b earning $59m in tax credits. By 2019, the gigafactory companies (now with 7,700 employees) had invested a combined $4.9 billion ($3b by Tesla, $1.7b by Panasonic, and $100m by H&T plus some equipment). This qualified the companies for the full tax credit amount of $195 million The incentive package also includes 20 years free from
sales tax and 10 years free from
property tax, depending on Tesla's ability to meet performance expectations (like investing $3.5 billion in Nevada). For 2014–2018, tax abatements were $240 million. Nevada estimates the construction impact at $2.4 billion and the economic impact from the project at $100 billion over two decades ($5 billion/year, of which $353–378 million are wages) yielding $57 million in state and local taxes. The state estimated the factory would create a tax base of $1.9 billion over 20 years. In 2014,
Nevada Department of Transportation advanced the otherwise dormant south extension. This improves traffic conditions for the many large
logistics centres at TRIC and Gigafactory, bypassing Reno on the way to U.S. Route 50. In 2016, Tesla planned to ship batteries by rail to
its car factory in Fremont, but rail tracks at Fremont were removed. A 2.5 mile
rail right-of-way exists and could be built at a cost of $5 million. Tesla sends 52 truck loads of
auto parts per night from GF1 to Fremont (18,200 loads per year).
Water is scarce in Nevada, and some of the water for the Gigafactory is piped from a
treatment plant in neighboring Washoe County. TRIC built high-pressure
natural gas lines to its sites, but Tesla decided to use electricity and not connect natural gas to Gigafactory.
Heat pump technology is used for heating, and a $6.8 million
hot water storage tank with 10 million gallons is used to balance heat. whereas a former Tesla
logistics manager in 2016 estimated 300 MW to produce 35 GWh of battery capacity per year. Tesla installed
solar panels on the roof in early 2018, reaching over 3.2 MW by 2021, with a preliminary goal of 24 MW. If the factory is fully built, solar capacity could eventually reach 70 MW from 200,000 solar panels. Tesla works with a mining company to
extract lithium to the southeast, at
Silver Peak in
Esmeralda County. They intend to process the underground
brine water industrially over hours rather than the traditional way of letting the water evaporate from ponds over a year.
Construction on a March 2015 tour of construction|213x213pxTesla had already started brush clearing and
grading (prior to official announcement in September; permit date was June 26), Tesla and its partners intend to complete the facility by 2018. Depending on season and building stage, the number of construction workers has fluctuated between 250 and 1,800. On June 13, 2016, Tesla filed for a $63m expansion into section E on the site. By September 2016, the building had grown to with further areas under construction. the building's footprint was with of usable area across several floors. A combined permit value of $322m was registered in July 2016, and $1.2b in July 2017. Solar panels were added to the roof, but other than that, there has been no further external construction on the Nevada Gigafactory 1, although Tesla and Panasonic use nearby warehouses. Gigafactory and the other large companies affect the local area by increased needs in transportation (SR 439) and
housing; house prices increased by 17% in 2015 from half of the peak in the
previous 2008 building bubble. Local businesses were wary of building new homes, which is being done mostly by out-of-state companies. ;Design features
HVAC equipment is located "between the floors rather than on walls and ceilings of a floor." In May 2017 at a TED Talk, Elon Musk stated his intention to announce three or four new Gigafactory sites to manufacture both batteries and complete cars. Prior to the building of more gigafactories, Tesla may expand and potentially double the size of Gigafactory 1. In June 2015, Tesla announced it exercised its option to buy of land adjacent to the original Gigafactory site. According to Tesla spokeswoman Alexis Georgeson, "The purchase gives us the opportunity for future growth." In Tesla's dealings with the state of Nevada expanding the size was always an option should the company choose to do so, said Steve Hill, director of the Governor's Office of Economic Development. "Tesla had said that the factory will be up to 10 million square feet [1 million square meters] in one or two stories," Hill said. "On the earnings call (in May 2015), Elon said they aren't yet committing to this but that they are considering increasing the size of the gigafactory here by 50 to 100 percent." Early estimates from 2014 projected that the factory would employ approximately 6,500 people by 2022, requiring at least half of them to be Nevadans. In March 2023, the state of Nevada approved a new package of tax incentives for Tesla worth more than $330 million, in exchange for Tesla investing $3.6 billion over 10 years in the expansion project. The tax incentive package was structured similarly to the earlier package. Tesla will receive a 10-year full abatement of personal and real property taxes, expected to be worth $246 million. The company will pay a reduced sales tax of 5.35% for 20 years, a savings of $66.6 million, largely on equipment purchase costs. Finally, the automaker will receive a 10-year full abatement of its business tax, saving the company $17.6 million. == Operations ==