Tesla tags Reno for Gigafactory, but won't commit

RENO — Tesla Motors said Thursday that it "broke ground" for its giant battery plant outside Reno. But despite the work, it said it isn't yet committing to it as the site for its 6,500-employee "Gigafactory."

"In June, we broke ground just outside Reno, Nevada on a site that could potentially be the location for the Gigafactory," CEO Elon Musk and CFO Deepak Ahuja wrote in a note to investors. "Consistent with our strategy to identify and break ground on multiple sites, we continue to evaluate other locations in Arizona, California, New Mexico and Texas."

Musk says the final choice will be made over the next few months.

The anticipation and anxiety in Nevada's economic development community has been building since last winter for the plant that could be as big as 10 million square feet.

On the Nevada front, speculation has pointed to grading work started in late May on a 600-acre site dubbed "Project Tiger," and closed to curious onlookers, at the Tahoe-Reno Industrial Center 17 miles east of Sparks. When grading stopped abruptly last week, the rumors revved up: It meant a no-go for a Gigafactory in Nevada. No, it was merely a pause in the prep work. No, the site has gone dark and silent.

"It wasn't unplanned. They're at a stopping point, a natural pause, with a different starting element to come," Lance Gilman, TRIC developer, said Wednesday. Citing a nondisclosure agreement, he refused to identify the business targeted for the grading work. But he said, "The building got bigger by several million square feet. Some plans have changed. To my knowledge, it's still an open book. There will be more to come."

At the Economic Development Authority of Western Nevada, uncertainty, to some degree, has surfaced. Two months ago, CEO Mike Kazmierski said, "I'm confident we're on the short list."

On Wednesday, he was more elaborative and appeared to be hedging his bets as he awaited Thursday's events.

Tesla had said it would select, starting in June, two or three finalist states to begin construction simultaneously as a way to maximize speed and minimize risk of delays before a winning site is selected by year's end. It also noted that California could be a possible contender.

But June and now July have come and gone and still no word on which sites from the original four semifinalists would advance to the finalist stage. And in fact, Tesla's home state of California, once considered a long shot, is now seriously in the running, Tesla says, and reports last week in Tech Times and the Los Angeles Times say Stockton south of Sacramento is the favored locale.

Two sites in Nevada

Besides Nevada, other states are wooing Tesla. Those states — and now California — have formulated plans for millions in incentives, including tax relief. Republican Texas Gov. Rick Perry even visited Sacramento on June 10, arriving at the Capitol in a Tesla Model S, to push his state's cause.

In Nevada, officials have cited standing policy not to discuss economic incentives for prospective businesses, including what they're offering Tesla. Tahoe-Reno Industrial and Reno Stead Airport in Nevada had been considered potential targets for the gigafactory. But TRIC is thought to be the favored choice given the business park's size, more than 100,000 acres, and rail and highway access directly to the San Francisco Bay Area and Tesla's car-manufacturing plant in Fremont.

Gilman said his center, located in Storey County, just outside Reno, offers prospective businesses a "high-priority" schedule with minimal risk, meaning as few time-consuming impediments as possible from permitting to operation. "We can deliver a building permit in 30 days or less. That's almost unheard of in the U.S.," he said. "We can fast-track building, pouring slab at one end while finishing permitting at the other. It gives a company a lot of confidence in moving forward with a project."

In the case of "Project Tiger," Storey County records show a "clear and grub" permit for 2641 Portofino Drive, where a guard post turned away onlookers, was pulled on May 22 with work to conclude in November. "There's a pad out there for somebody," Gilman said of the business he refused to identify. "Millions of cubic yards have been moved. From start to finish, (grading) took three and a half weeks. That's unprecedented."

O'Driscoll reported from Reno and Woodyard from Los Angeles