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California In the Running For Tesla Gigafactory

An anonymous reader writes Thanks to some clean-energy tax incentives approved late this spring, California appears to be in the running again for Tesla's "Gigafactory". From the article: "The decision should have been made by now, and ground broken, according to the company's timeline, but is on hold, allowing California, which was not in the race initially — CEO Elon Musk has called California an improbable choice, citing regulations — to throw its hat in the ring. 'In terms of viability, California has progressed. Now it's a four-plus-one race,' said Simon Sproule, Tesla's vice president of global communication and marketing, referring to the four named finalists — Texas, Arizona, New Mexico and Nevada — for the prize. That's heartening. Having the Gigafactory would be a vindication of Gov. Jerry Brown's drive to make California the home of advanced manufacturing, of which Tesla's battery technology is a prime example. With its technology, 'Tesla may be in position to disrupt industries well beyond the realm of traditional auto manufacturing. It's not just cars,' a Morgan Stanley analyst told Quartz, an online business publication last year.

36 of 172 comments (clear)

  1. Texas? by cdrudge · · Score: 4, Insightful

    Why the hell is Texas in the running? I mean, it makes perfect sense to reward a state that makes it as difficult as possible to sell a vehicle with Tesla's sales model.

    1. Re:Texas? by necro81 · · Score: 5, Insightful

      I mean, it makes perfect sense to reward a state that makes it as difficult as possible to sell a vehicle with Tesla's sales model.

      It makes perfect (business) sense to locate it in a state with depressed wages, huge amounts of available land, little-to-no zoning restrictions, lax environmental regulations, and politicians that are at least a buy-able as the rest. Hell, if it's good enough for the oil and gas industry...

    2. Re:Texas? by StoneCrusher · · Score: 5, Insightful

      This is why you're not a CEO or politician. Building this factory in Texas would make it harder for politicians to fight "Texas Made" cars. Sure the mouth pieces and opposition will still be there, but the mouth pieces promoting the cars would get a lot louder. Once you get Texas on board, a lot of southern states are easier. They are looking how to move forward, not punish for history.

      Remember the next round of Tesla cars will be SUVs and bog standard sedans. Not pick up truck territory, but certainly Texas soccer mom and Austin city car markets.

    3. Re:Texas? by alen · · Score: 3, Insightful

      what state is the largest producer of clean wind energy?
      hint, it's not california

      Texas is a big tech hub

    4. Re:Texas? by Mr+D+from+63 · · Score: 2

      A good CEO will not let politics, revenge or reward guide the decision, but rather consider the total package/environment and how that supports the success model. But, regardless of which states are in the running, the trick is to always have several competitive states in the mix right up till the end, even if you've already decided internally, just to make sure you get the best deal possible.

    5. Re:Texas? by StoneCrusher · · Score: 2

      Not so much. They need to build the plant anyway. Even if Texas doesn't start making it easier for Tesla to sell directly, the plant will still function. It's not like building it in a another state will make Texas happy. It's a Win/draw situation for building in Texas to help the Texas and southern market, not a win/lose.

      Now of course there are lots of other factors at play about where the factory will be built, but I'm pointing out that revenge is an absolutely terrible metric to use when making business decisions.

    6. Re:Texas? by luis_a_espinal · · Score: 4, Interesting

      I mean, it makes perfect sense to reward a state that makes it as difficult as possible to sell a vehicle with Tesla's sales model.

      It makes perfect (business) sense to locate it in a state with depressed wages, huge amounts of available land, little-to-no zoning restrictions, lax environmental regulations, and politicians that are at least a buy-able as the rest. Hell, if it's good enough for the oil and gas industry...

      Really? You really want to go there? True that huge chunks of employment in Texas is in the Walmart-like category for people with no specialized skills. But for manufacturing and up, wages are decent and the economy is booming. Go to Austin, Dallas or Houston for good paying jobs without the ridiculous hassles that you see in the Bay area: ageism, gentrification, and most important of all, absurd zoning laws that prevent creation of new housing/rental units to accommodate the growing population (and which causes housing/rental prices to be absurd to anyone except couples where both partners are in IT/STEM/Software.). The same is true in Seattle, Portland ,The Triangle and Denver (in particular Denver.) Texas is doing fine, more than fine. Just because there are a bunch of backwater NIMBY small towns full of folks who thing America's best years were 30-40 years ago, that doesn't mean the state is crap. People are moving there in droves for a reason, small businesses are booming, people in manufacturing are doing well. And most importantly, whether you work in STEM or in a factory plan, you can still afford an actual house that is not a hole in the wall (Sillycon Valleeey, I'm looking at you.)

      Texas is doing well, and will be doing well for a long time. It is fair to criticize, but try to give some credit where credit is due every once in a while instead of blindly following the bash-your-favorite-dead-horse crowd.

    7. Re:Texas? by vossman77 · · Score: 2

      Not that I want to defend Texas, but based on the wiki-table, you posted:

      Texas produces the most renewable electricity (w/o Hydro) at 37,784 GW.h of any state in the USA (California close 2nd). I just happens to be a small percentage of its total electricity usage.

    8. Re:Texas? by luis_a_espinal · · Score: 2

      A good CEO will not let politics, revenge or reward guide the decision, but rather consider the total package/environment and how that supports the success model. But, regardless of which states are in the running, the trick is to always have several competitive states in the mix right up till the end, even if you've already decided internally, just to make sure you get the best deal possible.

      Hahahahaha, that is the stupidest thing I have ever heard? Where are you been all this time? Under a rock on Endor? Selling cars directly to customers is highly politicized, and there is no way a good CEO will make decisions without taking that into account.

      It would be nice if we had a true free market where companies can sell their products directly to customers (and let the best product win) without interest groups lobbying for their right to be "middle man". But this is 'Murika, land of the free (when you can afford it), home of the brave (when you have the moolah to back it up.)

      Tesla is being prevented from selling directly to customers because of politics, not market forces.

      This is a huge political battle that Tesla must win for its benefit (and for the benefit of us all.) That requires political awareness and acumen.

      A good CEO for Tesla will take politics into consideration when making decisions. When an industry

    9. Re:Texas? by cdrudge · · Score: 2

      I think most people would say that "clean energy" and "renewable energy" are synonymous with one another. Why would you exclude hydroelectric as a clean and/or renewable energy source? When considering ALL forms of clean energy combined, Texas is not first. Not first in total production. Not first in percentage of generation.

      If you are going to exclude hydroelectricity generated energy because it's only available in certain parts of the country, shouldn't you also exclude wind generated power since it's only feasible in certain parts of the country too? I'd probably also include solar since the further north you go, the less viable it becomes.

    10. Re:Texas? by Anonymous Coward · · Score: 2

      Funny thing, even the rural rednecks would love a Tesla pickup truck:

      1: If they want to roll coal, a fake set of stacks and a fog machine can be added. Realistically, I live in Texas, and no rural farmer or rancher I know would ruin an expensive vehicle by detuning it and voiding the warranty, so why tempt fate?

      2: A lot of rural work requires electricity. Being able to pull out tools, plug them into an inverter on the side of the truck, then get to work would make life a lot easier in the middle of nowhere. Even if the truck's batteries just powered a small A/C in an outbuilding, it would be useful.

      3: Electric motors have lots of torque, and this is what is needed.

      Texas is going to have to decide between dealer pull versus having a modern battery factory. I hope they do get with the times.

    11. Re:Texas? by angel'o'sphere · · Score: 2

      You have waste, so it is not "clean".
      Evers saw a mining site for Uranium? Does not really look nice either.

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    12. Re:Texas? by Dishevel · · Score: 2

      The reason they have a w/o Hydro set is that many states do not have massive rivers and have no ability to compete there. So they create a set that all states can take advantage of if they want. In the that set Texas does really well.

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    13. Re:Texas? by Impy+the+Impiuos+Imp · · Score: 2

      > 3. Electric motors have lots of torque

      This is why diesel railroad engines are used. In the words of Doc Brown, " No, no! This sucker's electrical!". The diesel motor powers a generator which drives the electric motor.

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    14. Re:Texas? by LWATCDR · · Score: 2

      As I said, "the greens will never stand for it". Well if you look at the amount of mining for Nuclear verses coal over the life of a power plant....
      Yadda yadda. You can fight nuclear or climate change and win. You can not fight both.

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  2. I was worried for a minute by Gothmolly · · Score: 4, Funny

    Slashdot hadnt yet posted anything about Elon Musk today. My groupthink-o-meter was starting to dip back down below 'fellate'.

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  3. Re:What are the other 99% supposed to do? by zwede · · Score: 3, Interesting

    The plans for this factory have it automated to hell, employing a skeleton crew of human beings.

    The plans include 6,500 employees.

    https://www.greentechmedia.com...

  4. Texas! by sycodon · · Score: 4, Insightful

    It makes perfect (business) sense to locate it in a state with reasonable wages not drive up by unreasonable taxes and regulations, huge amounts of available land, common sense zoning restrictions, reasonable environmental regulations, and politicians that are actually interested in your business becoming a success . It's what's made the oil/gas/information services/computer/auto/semiconductor/etc. industry successful so far.

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    1. Re:Texas! by DigiShaman · · Score: 2

      Texas! A model for the rest of the world. Well, except for the patent trolling Marshall, TX. It's our "asshole" of the state.

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    2. Re:Texas! by cayenne8 · · Score: 3, Insightful
      Yep.

      The over regulation and high taxes in CA are the killer for any business possibilities there. Large companies are leaving California due the the bad fiscal management out there and overbearing govt restrictions on businesses out there.

      You'd think at some point, sensible folks would see this and do something to curtail the problem, but when you let political philosophy outweigh what common sense should present to the current vision, you get much of what you see in CA, and more recently in the entire Federal admin overall.

      Sadly, some seem to hold their philosophical vision over and above solutions that could fix things at ALL costs. Some folks wold rather fail by breaking, rather than to bend and survive.

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    3. Re:Texas! by cant_get_a_good_nick · · Score: 4, Insightful

      What made the oil industry successful is oil. Whatever regulations or non-regulations you want to give, if there's no oil, there's no oil industry.

      It can be argued that silicon valley grew because of California University school system. A good chunk of which is publicly funded. Remember Sun stood for Stanford Univeristy Network. Google started at Stanford. A good chunk of Apple Mac OSX and iOS is BSD, developed at University of California, Berkeley. The Internet as we know it started at Berkeley - one of the first TCP/IP stacks was just known as Berkeley Sockets. The Internet was at first a DARPA project (government funded) for distributed command and control. The work then went to California universities, trying to share scarce computing resources.

    4. Re:Texas! by viperidaenz · · Score: 2

      Only one Texas Ranger can clean it up.

    5. Re:Texas! by cant_get_a_good_nick · · Score: 2

      Troll feeding time...

      Why is it that government can never do anything right, well, unless it's the army, then it can do no wrong. Somehow if there's a bullet involved, government becomes perfect. Try to feed a kid, whoa, that can never work.

      Oh, and if the government tries something and doesn't work, that's proof that government sucks. But if it does something, and can compete with private business, hey that's government being mean, and there's some law to prevent it. Government sucks by attrition - anything that works that works better than private industry is killed and all you see are the things that don't work.

      Anyways, Google started using the university network, using students educated at Stanford, using an operating system partially developed at a University, using a networking protocol developed at a University from ideas originally from a government institution. The original hardware included a Sun, again developed at Stanford. They used the web, which was started as a non-business thing, a bunch of CERN guys wanted to push physics research papers around. The first web didn't have much commerce on it, it was the NCSA webserver (NCSA from the University of Illinois - a public land grant institution) and NCSA Mosaic that popularized it before any company went on.

      Yet, you'd say none of that matters. It's very easy to win arguments by definition. Im sure you'd say "but none of that HELPED them" and just dismiss it.

  5. Re:The walken-comma by ganjadude · · Score: 2, Interesting

    frankly I dont know why anyone would want to open a business in cali right now. Business taxes are high, cost of living is high, regulations are horribly complex. Id much rather open a business pretty much anywhere else in the country over cali

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  6. Re:Make it a law by Ol+Olsoc · · Score: 3, Funny

    If you want to sell a Tesla in Calistan then it has to be built in Calistan by illegal aliens.

    Rush Limbaugh called. He wanted us to tell you that you're a little over the top.

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  7. Re:What are the other 99% supposed to do? by TheRaven64 · · Score: 2

    How many factory workers were middle class, during this heyday of which you speak?

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  8. Re:Nevada is the only candidate by gmhowell · · Score: 2

    Now if only trucks or trains could be used to transport lithium...

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  9. Jobs by sjbe · · Score: 4, Informative

    That is a tiny fraction of what US manufacturing used to employ

    It's ONE COMPANY and a relatively small one at that. Do you expect them to single handedly employ everyone looking for work? 6500 jobs is a LOT of jobs but way to try to diminish a good thing there Debbie Downer.

    During the heyday of the American middle class, GM employed hundreds of thousands of people.

    They still do. GM presently directly employs roughly 219,000 people. Last I checked that qualifies as "hundreds of thousands of people". GMs suppliers employ about 6 times that many people for products made by GM. (look it up - there is roughly 6 manufacturing workers in the supply chain for every one at a major auto maker) And furthermore there is is a multiplier effect whereby every $1 spent in manufacturing results in approximately $1.35 in additional economic activity which means more jobs. The death of US manufacturing has been greatly exaggerated.

  10. Re:What are the other 99% supposed to do? by necro81 · · Score: 5, Insightful

    How many factory workers were middle class, during this heyday of which you speak

    A surprisingly large number. Going back to the early days of the model T, Ford (the person) recognized that if he paid his people better than the usual factory wages, he would 1) have lower employee turnover, 2) short-circuit squabbles with the nascent labor unions, 3) increased productivity and throughput (see 1 and 2), and most importantly 4) be creating a population that could actually buy the product he was trying to produce.

    More recently, during the heyday that the GP spoke of (1940s through 1970s, then declining through the early 2000s), an auto worker could expect a modest, but stable, middle-class lifestyle from his (it was mostly men) factory job. It was blue-collar, didn't require a college degree, and could support a family on a single income. The large tracts of modest homes that made up Detroit are a testament to this fact. The decline in manufacturing around Detroit has directly led to the general poverty of the city, the depopulation, the urban blight (whole blocks of abandoned homes), and eventual bankruptcy of the city.

    If you can get it, the same can be said for an automotive job today, or building airplanes for Boeing. Or, until their decline, the textile industries in the American southeast or the lumber industries in northern states. There are fewer guarantees with a manufacturing job today - it may not be lifelong employment, and your prospects during retirement look less secure. Still, they are decent jobs for decent people, and (right or wrong) the kinds of jobs that cities and states climb over each other to get.

  11. Which California? by Dan+East · · Score: 3, Funny

    Which California? I hear there are 6 now.

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  12. Re:The walken-comma by cjjjer · · Score: 2

    You would think that Tesla would build the plant in Detroit, not only is land cheap and most likely loads of incentives but it would be a direct slap in the face to the big three automakers.

  13. California is a fine place to start a business by sjbe · · Score: 2

    frankly I dont know why anyone would want to open a business in cali right now.

    Depends on the business. For certain types of businesses, California is where the talent is located. Not to say you can't locate a successful company elsewhere (you can!) but there is a reason you find a lot of tech companies in California just like there is a reason you find a lot of manufacturing companies in Michigan, a lot of finance companies in New York, etc. Despite the problems California didn't become the economic powerhouse it did by random chance. It got there because it has the right combination of institutions, resources, talent and location.

    Id much rather open a business pretty much anywhere else in the country over cali

    Then I'm guessing you haven't opened a lot of businesses. There are certain businesses that make tremendous sense in California and others that make sense elsewhere. Unless you are going to get considerably more specific about what type of business you are planning to open then you are not making any sort of reasonable point.

  14. Clueless about Detroit by sjbe · · Score: 2

    The trouble in setting up there would be, what are you going to use for a workforce?

    You think there is a lack of a willing and capable workforce in Detroit Metro? You could not be more wrong. There are reasonable reasons to pick places other than Metro Detroit to build a factory but the blight in Detroit City and perceived lack of a workforce is not among them. Honestly I can't think of many better places to build a factory if you really look at the evidence. The opportunity is definitely there. You might find cheaper labor elsewhere but you aren't going to find a more capable labor force anywhere for manufacturing.

    Likely as not, not locals

    You bet. There is more manufacturing and engineering talent in Detroit metro than all but a handful of places in the US. Did you forget that GM has their headquarters in downtown Detroit? Where do you think they get their people from? Do you think it is by accident that almost every single car supplier of consequence has engineering operations somewhere near Detroit? Michigan ranks 4th in the nation in high tech jobs. Metro Detroit is the second largest source of tech jobs of any metro area in the US. If you want manufacturing talent you could do a lot worse than Michigan.

    So yeah, the locals will do just fine.

    how are you going to convince folks to me to Detroit, not much incentive to move to a barren, economically sparse, drug infested/violence infested area.

    If you think that properly describes all of Detroit then you aren't wanted there and you clearly know little about the area. Downtown Detroit near the Renaissance Center has actually seen a pretty nice revival. Not to say the city overall doesn't have a long way to go (it very much does) but there are big parts of it that are nothing like the hell hole you are describing. Guys like Dan Gilbert are buying up all kinds of property and businesses are setting up shop left and right. It's a hell of an economic opportunity if your investment horizon is sufficiently long term. There are three major stadiums, a convention center, a university, three casinos, GM, outstanding restaurants, Whole Foods, and lots more all downtown. You really think Whole Foods is going to set up shop in the middle of a blighted, drug infested area? I just had a relative open up an upscale coffee shop in Downtown Detroit and another relative of mine has a fast casual restaurant at the Renaissance Center.

    Furthermore it doesn't have to be in Detroit City. The Detroit Metro area is genuinely nice. I live in Oakland County which is immediately to the north of Detroit City and is one of the ten wealthiest counties in the entire US, has a AAA credit rating and is a genuinely nice place to live. Washtenaw and McComb counties are equally nice places. The University of Michigan as well as several other excellent local universities provides an outstanding local talent pool.

    1. Re:Clueless about Detroit by khallow · · Score: 2

      You think there is a lack of a willing and capable workforce in Detroit Metro?

      Yes. There's also the matter of the labor unions and the screwed up politics of both Detroit and the state.

      I think it'd be far cheaper to move whatever fragment of that workforce which is still "capable" out of Michigan to California or Texas than it would be to build anything there.

  15. Re:The walken-comma by ganjadude · · Score: 2

    only problem with that is he would have the UAW up his ass every day and no one wants to deal with the UAW

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  16. Re:"...vindication of Gov. Jerry Brown's..." by bledri · · Score: 2

    ..., not to mention that Texas has no income tax; what moron would build a factory in California? Elon was just being nice when he didn't categorically rule it out when asked.

    You realize that both the Tesla factory and the SpaceX factory are in California, right? So I guess Elon Musk is a moron...

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