Breaking News: $5 Billion Tesla Battery 'Gigafactory' Headed to Nevada

With competition from California, Arizona, New Mexico, and Texas, Elon Musk, the CEO of Bay Area-based Tesla Motors, chose the Silver State to build his much sought after $5 billion battery "giga factory."

"State officials scheduled a news conference at 4 p.m. Thursday in Carson City to announce the plant," writes Mike Ramsey of The Wall Street Journal. "Tesla earlier this year began developing a site near Reno, Nev., though the company had said it was possible other states could still compete for the project," he adds.

Nevada likely offered Tesla one of the largest incentive packages in the history of the U.S. auto industry to lure the factory to a state with relatively little presence in automotive manufacturing."

The payoff will be enormous though for Nevada for securing the $5 billion battery factory.  Tesla will "employ up to 6,500 workers and produce 35 gigawatt hours of battery cells annually in its so-called gigafactory," adds Ramsey.

In addition to the incentives, Nevada also offers Tesla "ready access to lithium, a key raw material for the batteries." However, one analyst stated that "the single most important factor is the [site's] low-cost green power,"

Reno offers Tesla choices among solar, wind and geothermal energy for the plant. He also said Nevada's lack of corporate and personal income taxes aided its selection.

"Karl Brauer, an industry analyst with Kelley Blue Book, says a carmaker making its own batteries is an even bigger deal for the auto industry because the battery pack is the most expensive part of producing an electric car and it's the one that car manufacturers previously - who've produced electric vehicles - have had the least control over," writes Sonari Glinton, NPR Business Desk reporter. "They've been basically at the mercy of battery makers."

Not all analysts are optimistic on Tesla's investment though. "(B)attery industry researchers and executives have been skeptical of Tesla's plan for the factory," writes Ramsey. "On Wednesday, Lux Research, issued a report estimating that the gigafactory would have 57% overcapacity in 2020 as sales of Tesla vehicles will be less than half of what the company is forecasting."

No word as to whether Musk held out for changing the state nickname from silver to lithium.

Correspondent's noteSubscriber-only content to Wall Street Journal article will be available to non-subscribers for up to seven days after Sept. 04.

Full Story: Tesla to Choose Nevada for Battery Factory

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