NO DECISION YET: Tesla owner and billionaire Elon Musk won’t say which states are still in the running for a “giga-factory” that promises to employ 6,500 workers.
By Rob Nikolewski │ New Mexico Watchdog
SANTA FE – The Tesla tease continues.
There was speculation that Tesla Motors CEO Elon Musk would announce on Wednesday two potential locations for a $5 billion “giga-factory” that promises to employ 6,500 workers to assemble lithium-ion batteries in the company’s electric cars but in an investors call, Musk did not winnow the field of four states — including New Mexico — that are in the running.
In fact, he confirmed reports that California is a fifth state in the running, sort of.
“California is improbable but not impossible,” Musk said. California is the home state of Tesla’s headquarters but Musk said he’s concerned about regulations in California potentially delaying the building of the giga-factory.
“It’s not so much the incentives but how fast the site can be completed,” Musk said, adding that the company can’t afford to wait a year or more for a permit before proceeding.
“In other states, it’s much more streamlined,” Musk said.
But one thing that did come out of Wednesday’s call? A decision is coming very soon.
Last week, Musk said the company will announce two potential sites for the factory to lower the risk that one site may not work out. On Wednesday, Musk said he plans to break ground on the first giga-factory site “next month” and “one to months after that, we’ll break ground on the second.”
So it’s still “hurry up and wait” for government officials in New Mexico — along with Nevada, Texas, Arizona and now, California.
The size of the Tesla project has spurred furious speculation inside the states in contention for the plant, with business insiders handicapping the fiscal strengths and weaknesses of each state and what kind of incentive package they can produce to lure Musk.
Nevada, for example, is considered a strong contender because it has no state income tax, is adjacent to California and is home to a lithium mine.
Among New Mexico’s potential advantages? It’s the home of Spaceport America, where Musk’s SpaceX rocket company already has a lease to flight-test a reusable rocket program. Plus, the state has recently cut the corporate tax rate to go along with New Mexico’s renewable energy tax credit.
As for New Mexico’s disadvantages? One industry expert pointed out that New Mexico was the only one of the four contenders that is not a right-to-work state– where workers can decided for themselves if they want to join a labor union or not.
“New Mexico would be wise to move in that direction and do what Indiana and Michigan did and become right to a work state,” John Boyd Jr., the president of a company in New Jersey that works with companies on site selection, told KOAT-TV.
“States give huge incentives to get this kind of business in their regions,” Jakki Mohr, marketing instructor at the University of Montana, told www.marketplace.org earlier this week, and this is a way of “playing one state against another to receive better incentives to locate there.”
Back in February when Tesla announced that New Mexico was one of the finalists, New Mexico Economic Development Director Jon Barela said winning the Tesla contract “would be a transformational opportunity for this state” and, “we would covet a project like this.”
Barela said he could not reveal any details of what New Mexico might offer to lure Tesla, citing confidentiality provisions in such negotiations.
Contact Rob Nikolewski at rnikolewski@watchdog.org and follow him on Twitter @robnikolewski
