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Tesla: breaking ground at one Gigafactory site in June

teslaTesla Motors Inc. reiterated Wednesday that it plans to begin work on its $5 billion battery factory in two states, but it has yet to determine which two states will remain in contention for the 6,500 jobs that go along with it.

The Palo Alto, Calif.-based car manufacturer made the announcement in conjunction with the release of its first-quarter earnings.

“We have not yet finalized the ultimate location for the Gigafactory and we are going to start work on at least two locations in parallel in order to minimize risk of delays arising after groundbreaking,” Tesla Chairman and CEO Elon Musk wrote in his four-page letter to shareholders.

In February, company officials identified Arizona, Nevada, New Mexico and Texas as the four finalists for the mammoth lithium-ion battery factory.


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But during a conference call with analysts later Wednesday afternoon, Tesla officials made it clear that a decision is close — in fact, it plans to break ground as early as next month.

“We expect to break ground on the first of those sites probably next month,” Musk said. “Shortly thereafter, maybe a month or two later, we’ll break ground on a second one.”

Tesla officials also said that California — which initially had been ruled out as a site for the factory — is “potentially back in the running.”

“California is in the improbable but not impossible category at this point,” Musk said, acknowledging that state officials are making a strong eleventh-hour push to accommodate the company’s needs.

Musk said it’s not so much a matter of incentives, but whether Tesla could make it through that state’s lengthy regulatory process fast enough to meet its aggressive timetable.

Last week, the company first disclosed that it intends to begin work in two states to ensure a last-minute glitch doesn’t delay the production schedule for the batteries that power its vehicles.

The factory is critical to the company’s plans to reduce production costs enough to build a sedan due out in 2017 with a target price of $35,000 — roughly half the cost of its current Tesla S model.

Tesla said the 10 million-square-foot plant would be built on between 500 and 1,000 acres and produce enough batteries by 2020 to power 500,000 vehicles a year.

Previously, Albuquerque officials have said if Tesla does choose New Mexico, the plant would be built somewhere in the Albuquerque metro.