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.