By on September 5, 2014

Elon Musk and Brian Sandoval

It’s official: Tesla will build its Gigafactory in Nevada pending legislative approval.

KOLO-TV reports the battery factory will bring its 6,500 jobs to Reno, along with $100 billion dollars and up to 22,000 jobs over the next two decades.

In turn, Governor Brian Sandoval will ask the state for $1.3 billion in tax breaks and incentives at a special legislative session next Wednesday at the earliest. The package is meant to last for 20 years.

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55 Comments on “Sandoval, Musk Announce Tesla Gigafactory To Be Built In Nevada...”


  • avatar
    dwford

    Was there really much doubt? California was never going to happen, and why truck batteries from Texas or Arizona?

    • 0 avatar
      mcs

      And Nevada has the only commercial lithium mine in the US along with being home to the fifth largest known lithium deposit in the world.

    • 0 avatar
      LeeK

      People of Mew Mexico thought they had a chance — lots of criticism of Governor Susana Martinez in today’s papers. I’m not quite sure what more could have been done in the bid and supposedly it was sweet enough to make Telsa seriously consider it.

    • 0 avatar
      jkross22

      California could have happened. After all, Tesla is based in CA. They simply realize there are better places to do business than their home state.

      • 0 avatar
        Pch101

        So when Toyota built a plant in Mississippi, they were turning their backs on Kentucky?

      • 0 avatar
        mcs

        Their main source of raw material is near Orovada Nevada. I think transportation distance of the raw materials had a lot to do with the decision. Reno is sort of halfway between the lithium deposits and the Tesla factory.

      • 0 avatar
        Mike Kelley

        Venezuela is a better place to do business than California.

        • 0 avatar
          VoGo

          Mike Kelley,
          Have you been to Venezuala? I do business in Caracas, and let me tell you a few things about the former ‘murder capital of the world’

          1. Power outages. You wouldn’t think that a country so full of oil would have them, but every afternoon, buildings turn off all non-emergency electric uses, including elevators.

          2. Security. You can’t take a taxi safely, even from one of the few Western “safe” hotels – you need to arrange car service in advance from a reputable firm. Don’t even think of taking a taxi from the airport – you are very likely to never be seen again.

          3. Attitude: everyone I work with is scared to death – to go outside, to take a chance, to build a business. Everywhere you see mobs killing people for no reason.

          4. Living conditions: Slums everywhere you look. Slums within slums. No educated workforce.

          5. Business environment: As you might guess, the government is essentially a mob-led organization designed to steal from anyone trying to make a living.

          Making bizarre statements like that Venezuela is a better place to do business in California just paints you as an ignoramus.

          Show me the Apple, Google or Dreamworks of Venezuela!

          • 0 avatar
            petezeiss

            Wow, high-octane reality. Thanks.

          • 0 avatar
            Mike Kelley

            Sorry, VoGo, I was trying to be ironic. I can’t shake the feeling, though, that California will one day be like the hell you are describing down there. It is trending more and more that way:

            http://www.breitbart.com/Big-Government/2014/08/26/Jerry-Brown-to-Mexican-Illegals-You-re-All-Welcome-in-CA

          • 0 avatar

            Reminds me the former Soviet Union right after collapse of communism. So what prevents all those people to immigrate to US where they will be in safety? Lot of people immigrated from former Soviet Union to US, Israel and Germany before, during and after collapse.

      • 0 avatar
        Xeranar

        Because an empty but heavily-unionized blue state is better than a filled up moderately-unionized blue state? Sorry, lets stop the invectives over the partisan ideas. This argument has no fundamental support. It always made more sense to build a huge solar factory in a state that is both arrid and extremely sunny. Basic geology drove this argument more than anything else.

        • 0 avatar

          How taxes and regulations in Nevada compare with CA and NM? I know few small businesses moved from SF Bay area to Nevada, my friends lost jobs because of that. One of them decided to stay with company and live in Nevada driving back home for a weekend.

    • 0 avatar
      redav

      I personally thought that AZ had a chance, but yeah, NV was definitely the front-runner in my mind.

      • 0 avatar
        highdesertcat

        We in New Mexico had hopes of having that factory here. 6500 jobs!

        But now that all is said and done, it makes sense.

        The Reno location is close to the NV mines, centrally located for rail transport to the assembly plant in California, and just right down the rail road tracks from Oakland Harbor, the major shipping port for the batteries to go overseas in the future.

        This new plant will make batteries for more than just Tesla cars.

  • avatar
    Beerboy12

    Looks like a win win, given Mr. Musk’s track record.
    Only $1.3 billion in tax breaks, really? Washington state handed Boeing $9 billion with out even asking… Perhaps Nevada has fewer roads that need fixing…

  • avatar
    thelaine

    Why is Martin Short shaking hands with the guy in the tie?

  • avatar
    stuki

    And so Musk and Sandoval can both gloat to their respective starry eyed dronelings, how important they are. For the functioning of our supposed “free market”, nonetheless….

  • avatar

    water?

  • avatar
    canddmeyer

    Bad deal for NV taxpayers. $1.3 billion for a return of $865 million is the best case scenario per the NV comptroller. When it fails NV gets stuck with an EPA toxic waste site. Taxpayers are tired of subsidizing billionaires so millionaires can buy toys.

    • 0 avatar
      Lou_BC

      @canddmeyer – Taxpayers may be tired but those writing the cheques aren’t.

    • 0 avatar
      stuki

      I have a really hard time understanding how this can be a bad deal for NV taxpayers. It’s not as if the $1.3 billion would otherwise have been handed back to them.

      It is a bad deal for other smart entrepreneurs who would otherwise have an even shot at competing with Tesla. But aren’t famous enough to have politicians give them the favored treatment. And hence, in the long run, it is a bad deal for science and engineering, and a good deal for vanity and grift. But what else is new in this Dystopian age?

      • 0 avatar
        Xeranar

        Wow…The hyperbole actually got up off the page and smacked me. Good lord, dystopian age? You live in a western state with a standard of living so many factors greater than every other non-first world country and factors greater than our ancestors a century ago. The only decrease in our standard of living has been the transfer of wealth upwards due to a complete turn around of tax system that transferred the burden of payments from corporations and the rich en masse unto the middle-class and poor. If you want to jam fingers in faces aim those puppies back in the mirror because it is exactly people like you who cite some fairytale of ‘free market’ ideology that allows the people in power to sell these ideas.

        • 0 avatar
          highdesertcat

          “….. the people in power to sell these ideas.”

          Xer, it’s the people in power who provide the jobs. It certainly isn’t “the middle-class and poor.”

          All “the middle-class and poor” want to do is enjoy participating in the profits without risking or suffering the agony of the losses, if any.

          Job creators can always find labor to do the work. The US space program proved they could train a monkey to do the work in a space capsule.

          I understand your motivation and ideals, but “the middle-class and poor” derive their employment from “the people in power.”

          It’s always been that way. If “the middle-class and poor” could have done anything constructive on their own, they would have done so decades ago. Those who can, DO! Those who can’t, teach.

          That’s the reality — this Elon Musk Nevada venture is no different. It will provide upwards of 6500 full-time jobs when fully implemented, to people highly qualified and motivated to work in this industry.

          And I think that is a good thing, even if it is not in my state of New Mexico.

          • 0 avatar
            Xeranar

            I’m not in the mood, HDC, your fantasy argument about how capitalists risk it all has no basis in reality. In fact the kind of capital class investments you’re talking about largely come from that middle class and poor you equate with unimaginative and risk averse through their pension funds and fruits of their production. Elon Musk can have all the cool ideas he wants, if he lost Tesla it wouldn’t have been his fortune, it would have been institutional investor fortunes, pension funds and such, paying the price. In fact the difference between small business owners and these types is dramatic. The history of corporate America is littered with people who kept blowing through huge investments and keep getting to try again (Trump is a prime example). They aren’t ‘better people’ or more ‘willing to risk it all’ because they’re never at risk of losing it all.

            If Joe Blow opens a bakery he can go bankrupt and lose his house.

            If Tesla fails Elon Musk simply moves on to his next project leaving his investors high and dry.

            So stop trying to sell me a lie, you know I’m not buying and while I appreciate you’re so self-deluded I try to remain in the firm confines of reality.

          • 0 avatar
            petezeiss

            “I’m not in the mood, HDC”

            Ah.. meeting with your department chair, eh?

          • 0 avatar
            Xeranar

            Petezeiss – What about my department chair? I technically have two, one I work for as a visiting professor and my home University’s. I’m actually in line to be elected to the department chair when I return if I want it and as far as I know I’m rather well liked in both departments.

            But then again the people I work with choose to be educated on the core theories and have research to back their views compared to the general ‘talking out of your ass’ assumptions passed around in these circles. But if your best was merely making an ad hominem remark at the fact that I didn’t particularly feel like hearing HDC’s moral economics argument about how the capitalist class are some how the risk takers though basic research proves otherwise I pity you.

            You do realize this is the internet, right? You go back to your sales job and bitch about the president and I go back to my classroom and I teach objective facts using scientific methodology to indicate probability and likelihoods. When people actually want to make educated decisions on policy they call me, not you. So why would I give a damn about your petty ad hominem attack? I just felt like you needed to understand how much of a gnat you are in relative terms since you felt like you had the power to attack me as an individual.

          • 0 avatar
            highdesertcat

            Xer, I respect your convictions and beliefs. I don’t share them, but that is what makes the world go ’round.

            Before you label someone as being self-deluded, you may want to consider the decline in union memberships over time, since its peak.

            Having been born into and grown up in a two-union household, I can tell you my parents were happier after they were able to change jobs and get out of their respective unions.

            And….. they got to keep more of their hard-earned money for themselves.

            Let me stress here, I believe that it is up to the employees themselves to decide for whether or not they want union representation.

            Seems to me the smarter ones are choosing to opt out.

        • 0 avatar
          stuki

          “The only decrease in our standard of living has been the transfer of wealth upwards due to a complete turn around of tax system that transferred the burden of payments from corporations and the rich en masse unto the middle-class and poor. ”

          Like a billionaire getting highly publicized tax breaks not available to anyone else, you mean?

          The best way to make societies better, less dystopian, is to get rid of burdens. Not transfer them around to “other people.” Just like tax breaks are good for Musk, they are good for everyone else too. Poor, rich, corporations, gayscouts what have you. Good, period.

          • 0 avatar
            Xeranar

            I’m with you in concept, Stuki, I’m just going to disagree with the policies used to reach them. :)

          • 0 avatar

            Xeranar, if it is so easy to make enourmous amount money as a capitalist why most people choose to make miserable amount of money hard way? It sounds kind of counter intuitive to what we know about human nature (greed). How your superior “science” explains that – that 99% of people are dumb? May be that is the explanation.

          • 0 avatar
            Xeranar

            Who said making enormous amounts of money was easy for everybody? If you look at how the economy is divided only a very small number of people at the top are allowed to throw around money as the Capitalist Class. If anything it’s actually very hard to make money in a capitalist system because the capitalist is always leeching off the productivity of others. My labor is not my own, if I work for say a private business as an HR contractor to help settle labor disputes, the difference in my productivity to benefit the company versus my pay is dramatic. The Capitalist class gets a small slice out of everybody’s actions within their system.

            So regardless of intellect unless you can reach a position that allows you free access to investment markets or a sizable backer reaching the exponential profits of Elon Musk or Donald Trump is basically a pipe dream for most Americans. It doesn’t mean that the people on top don’t weight the balance to their favor in elections by positioning themselves on social issues and straining the privately held media to keep discussing their topics in a favorable light. America, Britain, and Canada are really the only countries where Capitalism is largely unfettered and they suffer for it and they create these completely unsustainable situations by choice. So 99% of the people aren’t stupid but most are held in check by being given just enough to keep them willing to work in a system that is obviously broken.

            HDC – Unions peaked during WWII, since then they’ve been fought against by the capitalist class and as industrial unions have suffered losses service unions and white-collar jobs have been slow to develop unionization even though at this point the majority of white collar jobs would be considered for unionization for the uniformity of work expected. The argument over ‘smart’ or ‘dumb’ based on some conscious decision making process is already oversimplified simply because of the previous statement. Never mind the historical backlash and willful fighting and resistance presented by companies like Wal-Mart who would rather outsource and shut down whole segments of the store to stop unionization. Chattanooga is just another example in the string of battles being had because a political party has willfully decided to be anti-labor and has used this reasoning to make unfounded economic arguments about it.

          • 0 avatar

            “So regardless of intellect unless you can reach a position that allows you free access to investment markets or a sizable backer reaching the exponential profits of Elon Musk or Donald Trump is basically a pipe dream for most Americans. ”

            DO you know that Musk was immigrant as anyone else? Or Jobs did not have access to anything to make money? Or Ford, Gates, HP and on and on. They did not have any privileges other than higher than usual intelligence, desire to work hard and take risk (with other people money but who need to be smart to do that). But wait until intelligence can be enhanced – it is interesting because those who will be able to afford intelligence enhancement will move ahead initially. But eventually price will go down.

          • 0 avatar
            Xeranar

            Seriously? You’re going to puff up and pull the completely threadbare and broken down ‘American Dream’ argument in the face of a huge historical argument against them? They’re literally the exceptions that prove the rule.

            Elon Musk – Brilliant South African who came from money. Went to preparatory school, graduated from Wharton School of Business at University of Pennsylvania. By far his connections to the wealthy and elites in these locations opened many a door for him. I’m actually not diminishing his intellect since it was and is massive. But he got there by already having a step up far over most Americans.

            Steve Jobs – Parents didn’t have money, his step into the world of elite power was by entering the industry before any major player was relevant in it and exploited greater intellects like Steve Wozniak. His relationship with Atari opened up doors to the fledging industry backers and if Apple hadn’t been lucky in the initial bonanza he wouldn’t have had access to the later capitalist backers that put him back into authority at Apple. Never mind that again his best ‘skills’ were improving on designs already established and developing social cache with electronics. Not undeservedly but he wasn’t exactly building a world by himself.

            Ford – Similar to Jobs. Basically had a good idea when an industry didn’t exist. He relied on heavy-investors to build FoMoCo 3 separate times. If I had a shed and a great car idea I doubt I could repeat Ford’s success because the industry is stabilized. It doesn’t mean there aren’t new industries but not 320 MILLION new industries for us all to exploit in the same way.

            Gates – Family of wealth, worked with Jobs in a burgeoning industry, didn’t really risk much except a small amount of capital and then landed a sweetheart contract with IBM on DOS.

            HP – Mind as well just repeat the same arguments for Ford & Jobs. They got into a new undeveloped field and basically got lucky before stable labs took over the innovation in the field.

            In the end all of your citations essentially prove that unless you’re born into wealth or privilege (Musk, Gates) or land in a developing industry where you can be essentially a founder of it (Ford, HP, Jobs, Gates). They weren’t really risking anything, all of them had either major investors into the next step OR were investing some of their limited capital but mostly their time into these fledgling industries. The internet land grab is pretty much at an end, there will be new developers but the goal now is to be bought by Google, Facebook, or Amazon…etc.. It doesn’t mean that most people aren’t willing to take risks but you can’t tell me that these people who have had major investment put into their firms compare to an average small business owner who leverage their house and basically their entire life for a single-location business in a developed industry.

          • 0 avatar

            So you basically want a society where people who do not go to college or business school, do not have good communication skills, are not able to establish good business relationship and convince investors, have no faith in American dream, constantly bitch about capitalism and believe only in redistribution of wealth to become multimillionaires and success stories? This society may only exists in your dreams. It is not scientific.

          • 0 avatar
            Xeranar

            Not ‘basically’ at all. In fact you didn’t read a word of what I said. I was actually being proud of individuals who are willing to put up their house for a bakery or restaurant. But I also recognize that our current form of capitalism is seriously flawed and that those at the very top aren’t risking anything but your money and mine in their next scheme to make more money.

            It’s actually really sad you’re down to misinterpreting the very basic views and understandings I pointed out. I know, it’s upsetting to be told you likely aren’t going to be a multi-millionaire, if it makes you feel better neither will I. But it doesn’t mean we can’t have a living wage and provide for our citizens at a fair level. Nobody I know of advocates for exactly equal wages whether you’re a janitor or a doctor. If anything they firmly believe in more critical and educated work deserves better pay, but the most wealthy citizens are making far more money than they deserve as ‘capitalists’ since the names you used atleast built companies. The Forbes 400 list is made up mostly of families who own stock, hold natural resources, or are investment bankers who basically lend out our money so they can get interest on it from people who are productive. Maybe that doesn’t seem wrong to you, but I think most of that money should be going to the average worker and the more educated for the work we do.

  • avatar
    TomHend

    Does anyone think this deal was done crony capitalism free?
    Crony capitalism being government and business in the same bed, why does Telsa need $6B in tax breaks?

    • 0 avatar
      highdesertcat

      TomHend, doesn’t matter. This deal provides jobs for Americans, in America. Nevada and the US government will collect far greater than the $6B in tax breaks provided Tesla, in the long run (i.e 5, 10, or 15 years).

      I wonder if someone, somewhere at some liberal University, has done an analyses of the break-even point for the $6B.

      I suspect that companies, like Tesla, Toyota, Honda, Nissan, Mercedes, BMW, Subaru, Hyundai/KIA and VW, do such an analysis, in-house, and that the numbers figure hugely in their decision of where to open up a plant (and for how long).

      • 0 avatar
        stuki

        The deal also reduces the ability for entrepreneurs who could build batteries cheaper and more efficiently that Tesla to get funding. That which is not seen, as Bastiat figured out so long ago. Of course, in dystopias brimpacked with economic illiterates….., huh???

        Government directing economic, or for that matter any, activity is never good. Five year plans telling whom what to do didn’t work in the long run either. And neither will deciding who should and should not make batteries.

        Of course, a century of near universal publicly funded indoctrination, has left a population so devoid of even the most basic concepts of anything whatsoever, that it pays off for some schmuck of a pol to prance around on stage with his billionaire pal proclaiming he can do just that. Without nary a droneling batting an eyelid over the idiocy of it all.

        • 0 avatar
          highdesertcat

          stuki, you’re right, it does short-circuit those who could build batteries cheaper and more efficiently.

          However, Elon is ready to commit now. The others are not.

          It was tried with A123, and that failed miserably, although the Chinese got a real good deal on that venture.

          Coupled with Fisker, the Chinese could be producing their own EVs before Elon ships his first Nevada-built battery.

          • 0 avatar
            stuki

            If The government gave KMart a few hundred billion in breaks and incentives, Walmart wouldn’t for long bother being ready for anything, either.

            Just like, when the government hands the banks infinite amounts of money at no cost at all, banks won’t bother ever getting ready to pay savers a dime for their deposits. Ensuring savers won’t save, but rather burn every penny on childish home remodels and expansions that are at best breaking even as value creation goes.

            All deals like this accomplish, is shifting wealth away from people who actually invent and create things, and towards people who lobby and get lobbied. Musk may well have been somewhat of an inventor at some point, but in this case, he showed his shareholders he can make them more billions by playing the crony game, than by building the best and cheapest product he can. That will not, since it can not, fail to hurt the country/world as a whole in the long run.

    • 0 avatar
      stuki

      Any time you have a society where the ability to talk to a politician, increases as your wealth increases; you have crony capitalism. Tesla needs $6B in tax breaks, just the same as I do. And everyone else does. We’re all equal in that respect. The only difference being, in dystopian hellholes, some are more equal than others.

  • avatar
    Big Al from Oz

    It seems quite a considerable amount of lithium comes out of Australia, approx. 34.7% of global supply which is good for us. It would be more advantageous if we could actually make the batteries.

    Lithium use is quite competitive and it’s biggest use in in the glass and ceramics industry. Only 18% of the lithium market is for batteries according to the link below, a lot less than I would have thought.

    With it’s use so competitive and the cost of the mineral relatively high, we will hopefully find ways to reduce the cost of recovery of this great metal.

    http://www.globalstrategicmetalsnl.com/_content/documents/405.pdf

    World Resources

    According to estimates by the United States Geological Survey (USGS), which have been modified by Geoscience Australia for Australia’s resources, world lithium resources in 2012 totalled about 13 538 kt. The resource data does not include Canada. Chile holds approximately 7500 kt, or about 56% of the total world resources, followed by China with 3500 kt (about 26%), Australia with 1538 kt (11.4%), and Argentina with 850 kt (6.3%).

    Lithium resources occur in two distinct categories, lithium minerals and lithium-rich brines. Canada, China and Australia have significant resources of lithium minerals, while lithium brine is produced predominantly in Chile, followed by Argentina, China and the USA. Lithium brines are the dominant feedstock for lithium carbonate production. All Australia’s current resources and production are from lithium minerals.
    World production in 2012 was estimated by the USGS to be 37 kt of contained lithium, excluding the USA production for commercial reasons. Chile produced about 13 kt (35.4%) to remain the world’s largest producer in 2012 followed closely by Australia (34.6%), China (16.4%) and Argentina (7.4%).Top
    Industry Developments

    • 0 avatar
      highdesertcat

      I suspect there’s a bit of lithium in Nevada as well. No doubt logistics played a big part in this decision as Reno is located within easy rail-road access from the Tesla assembly plant, Oakland Harbor and the Nevada lithium deposits.

      • 0 avatar
        Big Al from Oz

        @HDC
        Just recently the largest lithium deposit was found in Wyoming.

        I do think this has more to do with dollars and cents and subsidies/handouts.

        As I’ve stated Musk is a leech on the American economy. Without his Space, EVs, etc, he’d be a nothing.

        He couldn’t survive without handouts, he’s one of America’s largest recipients of welfare. I detest this.

        I wonder if any Musk venture can function without the huge direct and indirect handouts involved.

        The problem with these types of handouts it will end up like the chicken tax and create inefficiencies to protect a segment of industry rather than the industry standing on it’s own two feet.

        • 0 avatar
          highdesertcat

          BAFO, there’s a rich history of these types of handouts in America, among them GM, Chrysler and the UAW in 2009.

          Before that it was all sorts of entrepreneurial ventures, going all the way back to the building of the rail roads. Long history!

          With the exception of A123, Solyndra and other failed government handjobs to buddies of the administration in power, most of them created jobs, wealth and a feeling of prosperity. Shrub did the same for Big Oil, et al.

          Elon’s Space-X is a thinly disguised cover for Israel’s Ballistic Missile program, underwritten by the US.

          If Space-X can deliver a Dragon capsule to an orbiting space station, they can deliver a nuclear warhead to a stationary Tehran.

          Why do you think Iran is trying so hard to develop their own offensive capabilities?

          • 0 avatar
            Big Al from Oz

            @HDC,
            The US military doesn’t require Musk at all.

            You guys have sh!t that you could only dream of.

            Tehran?? Geez, I don’t think the Iranians are as capable as made out to be.

            Like Putin at the moment, he’s playing poker in the old Soviet fashion. Perception driven by politics.

            The West only has to stand and knock on these guys doors and you will see the house of cards fall.

            Why do we not attack Iran? They are causing much grief with the Russians, for different reasons.

            The Russians are stirring up problem to inflate the cost of energy, their economy is dependent on this.

            The Iranians/Shites and the Sunnies. This is a political problem created by us in the West.

            We made Western boundaries for them to live within, except, the boundaries were laid out for political and economic gain for the West.

            Now we have a problem to resolve……partly of our own making.

          • 0 avatar

            What is Tesla then – thinly disguised cover for Israel’s electrified wheeled missile program to bring destruction and misery to Palestinian people and Gigafactory coverup for making nuclear warheads for Israel?

          • 0 avatar
            Mike Kelley

            –Why do you think Iran is trying so hard to develop their own offensive capabilities?–

            So they can dominate their region and annihilate all of Israel’s cities.

  • avatar
    Bob

    Smart on their part going to a right to work state. I have a new negative opinion of unions after getting a job in the rail industry. I finally see why everyone hates unions.

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