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Tesla will build a $5 billion factory that will build 500,000 electric car batteries a year by 2020. They will employ 6,500 workers and they will locate in either Texas, New Mexico, Nevada, or Arizona. The plant will be powered by mostly solar and wind power.

The automaker expects to sell 35,000 all-electric Model S sedans this year and is readying production of its Model X SUV that will go on sale early next year.

It plans to begin selling a more affordable “Gen III” sedan by 2017 for about $35,000, or roughly half the cost of the cheapest Model S, but the company says cutting the cost of battery packs is necessary to make its cars more affordable.

Politicians in Ohio and Texas are fighting tooth and nail to keep Tesla out of their state. And Texas is on the outside looking in unless they ease their law saying that Tesla can't sell people cars through its own dealers in that state. But from a business perspective, all of the final four states that they have selected are major economic growth areas in the next few years given that they have a lot of sun and a lot of wind.

As our country tries to shed itself from dependence on fossil fuels, more and more people will be turning to solar and wind. And Tesla is positioning itself to be one of the prime beneficiaries.

As Raw Story notes, this is more batteries than were produced in the entire world last year. As technologies get cheaper, it will be more and more possible for people, companies, and cities to sell solar and wind power to utilities, which can then sell them to customers. The challenge now, for Tesla and other car makers, will be to make their cars more affordable so that anyone can buy one.

This will be a growth opportunity for the United Auto Workers as well. Although they were rebuffed in Tennessee, they will have a chance to expand their membership once the plant is built and the workers are hired. The challenge for Tesla will be to see if they can attract workers with pay rates that are competitive with GM, Chrysler, and Ford.

Originally posted to Stop the Police State! on Thu Feb 27, 2014 at 01:03 PM PST.

Also republished by Climate Change SOS.

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Comment Preferences

  •  Aren't those all Right-to-Work states? (14+ / 0-)

    I mean, I am definitely glad they're doing it, but I wish they were doing in here in California where they already have facilities and a more union-friendly environment. Oh well, still good news!

  •  Well this, thankfully, should explain (5+ / 0-)

    Musk meeting with Apple's M&A  execs.

    The rumors that he might sell Tesla to Apple were absurd.

    Although given how well my iPhone holds a charge, I'm not sure that consulting with Apple on battery technology is such a great idea.

    © grover


    So if you get hit by a bus tonight, would you be satisfied with how you spent today, your last day on earth? Live like tomorrow is never guaranteed, because it's not. -- Me.

    by grover on Thu Feb 27, 2014 at 01:45:22 PM PST

  •  A minor quibble, (2+ / 0-)
    Recommended by:
    grover, MPociask
    And Texas is on the outside looking in unless they ease their law saying that Tesla can't sell people cars through dealers directly in that state.
    •  The story says here: (1+ / 0-)
      Recommended by:
      MPociask
      Texas is among a handful of states where Tesla is prohibited from selling its cars directly to customers through its own dealerships, although customers in Texas may buy vehicles through the company’s website.
      That is why I took it to mean dealerships.

      "The cost of liberty is less than the price of repression." - W.E.B. Du Bois Be informed. Fight the Police State.

      by Eternal Hope on Thu Feb 27, 2014 at 02:39:39 PM PST

      [ Parent ]

      •  It's more complicated. (2+ / 0-)
        Recommended by:
        terabytes, MPociask

        In Texas, as in many other states, manufacturers are required to sell cars to private dealers rather than making direct sales. That's why they're called dealerships rather than stores.

        Iirc Texas customers must take physical delivery out of state.

      •  Tesla doesn't have dealerships (5+ / 0-)

        In the traditional sense.

        It has showrooms where you can test drive a car. But the guy who takes you out isn't a sales person. He doesn't earn a commission. He's a product specialist.

        You don't execute your purchase there at your local facility. It's all done directly with corporate. There is no stock to buy  from. You order your car. When it's ready, it's delivered to that location or you can go to California to pick it up.

        There are no dealers.

        Politicians say they're worried that if they grant Tesla the ability to sell directly to the public, what's to keep Ford or Chrevrolet from doing the same?

        I kind of understand that argument. But if a dealer adds value and service and doesn't jack up invoice prices much, then many customers prefer to deal with someone local.

        The issue will be how do you stop people from using dealers for test drives and then buying direct to save a few dollars? ;which has plagued a lot of brick and motar businesses).  Well, I'm sure that between dealers and manufacturers, they can figure out a way to resolve that.

        The problem in most industry, like say, technology, Amazon  and Best Buy aren't on the same team. Well, Ford should be on the same team as its dealers. They can work it out.

        Or, just don't grant exemptions to any manufacturer who has dealers in state.

        © grover


        So if you get hit by a bus tonight, would you be satisfied with how you spent today, your last day on earth? Live like tomorrow is never guaranteed, because it's not. -- Me.

        by grover on Thu Feb 27, 2014 at 02:54:21 PM PST

        [ Parent ]

      •  It's an error in the article. Teslas business (1+ / 0-)
        Recommended by:
        MPociask

        model includes selling direct to customers.  When an Texan, actually a majority of states, wants to buy a Tesla, they use a circuitous route.  Buy and title the car in California, then ship it to Texas, and transfer title.

        It would be more efficient to allow the Texan to order the car online, get in titled in Texas at the time of purchase, and be done with the intermediate step.

        But the Car Dealers lobby insists that Tesla establish a dealer network in the state, which would cut into Musk's profits.

        Dont Mourn, Organize !#konisurrender

        by cks175 on Thu Feb 27, 2014 at 03:39:44 PM PST

        [ Parent ]

        •  Car dealers... why? (0+ / 0-)

          Official repair shops where you have to get your warranty work done I understand. But what do car dealerships bring to the equation, other than car choices limited to local availability and inflated prices that require silly back and forth haggling just to get at the real price?

          Say I want to buy a new Chevy Volt.  Why can't I go to a Chevy web page, buy a Volt that I customized to every detail, and await delivery of my recently manufactured to my specifications car?  

          Who likes the dealership system, except for the dealers?

          •  Job security (0+ / 0-)

            The auto dealerships are a strong force. They contribute a lot of cash to politicians, so they have laws in place written to protect the status quo.

            Oddly enough, you can buy a Volt online, but you will really be dealing with the "dealership" to do that. They get around online sales through a technicality.

            Funny that Texas (my home state), talks about absolute freedom for businesses from regulations, but has this "protection" in place. I guess freedom only applies for certain people and businesses.

            I do wonder why Tesla just can't set up a dealership in which they have nothing more than a single "intern" answering phones in a cubicle. I'm sure the dealerships have made sure that there is not an easy workaround.

  •  Tesla currently does not have a union although (1+ / 0-)
    Recommended by:
    Eternal Hope

    Most of its operations are in California, a union friendly state.

    The most important way to protect the environment is not to have more than one child.

    by nextstep on Thu Feb 27, 2014 at 02:47:28 PM PST

  •  larger implications (5+ / 0-)

    While the development of the "gigafactory" will definitely be a huge economic plus for whatever state is selected, there are much larger implications that Wall St is starting to take notice of.  Morgan Stanley just raised the price target from $153 to $320 a share for Tesla, based upon the potential that Tesla could not only become a major auto builder rivaling the big 3, but also provide substantial competition for electric utilities.  From this article in Forbes:

    Morgan Stanley analyst Adam Jonas wrote, “Tesla’s quest to disrupt a trillion $ car industry offers an adjacent opportunity to disrupt a trillion $ electric utility industry. If it can be a leader in commercializing battery packs, investors may never look at Tesla the same way again.”
    If Musk can pull this off over the next several years, he will have not only revolutionized the auto industry but will also give the fossil-fuel heavy electric utilities a run for their money.  With literally trillions of dollars at stake in the existing conventional auto, oil, gas and utility industries I shudder to think what their reaction will be as it comes closer to reality.

    "Dark is the suede that mows like a harvest..."

    by profundo on Thu Feb 27, 2014 at 04:33:07 PM PST

  •  When they can build (0+ / 0-)

    A car for the Everyman I'll care. Until the, Tesla is just a rich mans toy.

    You best believe it does

    by HangsLeft on Thu Feb 27, 2014 at 05:32:58 PM PST

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