CARSON CITY, Nev. -- Tesla Motors Inc. selected Nevada as the site for a massive battery factory that will be key to the success of its next generation of electric cars.
The California-based electric car maker is still hammering out the final details on the plant that will crank out cheaper and more efficient battery packs for future cars, including the $35,000 Model 3 that is due in 2017.
Nevada Gov. Brian Sandoval is asking the Legislature for as much as $1.3 billion in financial incentives to help Tesla build its “gigafactory,” said Steve Hill, executive director of Sandoval’s Office of Economic Development.
The plant may cost as much as $10 billion, Hill said. Tesla CEO Elon Musk had initially said the plant would cost $5 billion.
The incentives will come in the form of tax breaks and abatements, state officials said, and are subject to approval by Nevada lawmakers.
In exchange, Tesla must invest a minimum of $3.5 billion in manufacturing equipment and real property in the state -- a threshold that is much lower than the $10 billion Nevada officials expect the company to invest in the state over the next two decades, the Reno Gazette-Journal reported late Thursday.
Musk said Nevada's offer to Tesla "was not the biggest incentive package" but said that the state was picked because it "can do things quickly."
California, Texas, Arizona and New Mexico were also in competition for the plant.
It's being billed by Telsa and Nevada officials as the biggest lithium ion factory in the world.
Japanese supplier Panasonic Corp. will produce lithium ion cells for battery packs and will fund part of the cost of the plant, which is considered an important part of Tesla's ambitions of popularizing and lowering the price of EVs.
Musk told Tesla investors in July that 40 to 50 percent of the cost of the battery plant would be covered by Tesla, with Panasonic funding between 30 and 40 percent, and the state where it is located 10 percent.
"Other industrial partners" will provide between 10 and 20 percent of the cost for the "Tesla Gigafactory," Musk said in July.