Tesla: Investments are minor compared to revenue that could be lost

Posted at: 07/31/2014 4:59 PM
By: Stuart Dyson, KOB Eyewitness News 4



Tesla Motors confirms it: the electric car manufacturer is breaking ground and preparing a site for its huge new battery factory near Reno, Nevada. But New Mexico and four other states are still in the running for the "gigafactory" that will eventually employ 6,500 people.

Tesla admits it has broken ground east of Reno for the $5 billion lithium ion battery plant that will power its next generation of electric cars, but the company says it will "continue to evaluate" sites in New Mexico, Texas, Arizona and California before making a final decision in the next few months.

It's all about timing. Tesla needs the battery plant to be up and running for production of the $35,000 Model 3, which is intended to be the first mass market electric car. That price tag is about half the price of the current Tesla Model S.

"Any duplicative investments are minor compared to the revenue that could be lost if the launch of the Model 3 were affected by any delays at our primary gigafactory site," the company said in its second quarter letter to shareholders.

In the same letter issued Thursday Tesla announced a formal agreement with Panasonic to supply the production equipment for the battery plant.