A plan by Tesla Motors Inc. to build what co-founder Elon Musk described as the largest battery site in the world could prompt a bidding war between states wanting the 6,500 jobs the $5 billion investment could create. Tesla disclosed Wednesday that it is selling at least $1.6 billion of convertible notes to finance the 10 million-square-foot project.
It is exploring possible locations in Texas, Nevada, Arizona and New Mexico for the site. "This would rank as the most attractive industrial project out there," remarked Dennis Cuneo, president of DC Strategic Advisors LLC and a former executive Toyota Motor Corp. who helped it select manufacturing sites.
Tesla has called the project the "gigafactory,” which would make the carmaker a force in both US manufacturing and electric power. Musk envisions a battery site that would have more capacity than any other plant to produce lithium ion batteries.
"This has a huge impact beyond Tesla," said Harley Shaiken, a labor economist at the University of California, Berkeley told Bloomberg. "It gives enormous legitimacy to battery production and the future of the electric car because that lies in the battery. It's high stakes, high technology."
Tesla said in a presentation on its Web site that it is planning an investment of between $4 billion and $5 billion by the end of the decade, financing around $2 billion of the total.
The convertible bond offering could rise to $1.84 billion, according to a separate statement. The plant is considered as vital to Tesla becoming a volume carmaker capable of building 500,000 or more electric vehicles a year from an expected 35,000 this year, Musk has said.