Tesla Motors Inc (TSLA) Considering California as Site for Gigafactory

Tesla Motors Inc (NASDAQ:TSLA) is now considering California as the site for its proposed $5 billion gigafactory after the lawmakers in the state offered new tax breaks and changes in regulations that could accelerate construction and reduce costs, according to report from the Wall Street Journal.

Last month, Tesla CEO Elon Musk stated that the electric car manufacturer will select the final site of the gigafactory by the end of 2014. He also indicated that Tesla Motors Inc (NASDAQ:TSLA) might pick three states and aims to start the preparation of the construction starting with completing the plans, gaining approval and  “all the way to creating a foundation” of the project.

California was not included in the list of states that were originally being considered by the electric car manufacturer for the gigafactory. Tesla Motors Inc (NASDAQ:TSLA) initially identified Arizona, New Mexico, Nevada and Texas as the potential locations of the gigafactory.

Tesla spokesperson Simon Sproule said different legislative measures were the reason behind the inclusion of California as a potential location for the gigafactory.

“California has set into play various legislative proposals and actions that have enabled it to come back into consideration. Discussions have taken place between us and various representatives of the state and the overtures they are making and conditions they are proposing place them in a better position for consideration,” according to Sproule.

Republican State Senator, Ted Gainess of Roseville and Democratic State Senator, Darrell Steinberg of Sacramento proposed a bill with a placeholder language referring to an economic development project involving a battery factory.

The lawmakers are working with economic development department of the state and Tesla Motors Inc (NASDAQ:TSLA) to develop a list of requirements. Their objective is to present the bill when the legislature resumes its session in August.

Sen. Gaines emphasized during an interview that he “will do everything” in his power for California to become the location of the gigafactory. He emphasized, “It’s very important for California, and sends a message across the country that we are open for business.”

California will be able to change the perception that it is not a competitive for manufacturing if Tesla Motors Inc (NASDAQ:TSLA) finally decides to build its gigafactory in the state, which is already a critical base for the company. Tesla’s headquarters and car factory is located in the state.

Panasonic Corporation (TYO:6752), the primary battery supplier of Tesla Motors Inc (NASDAQ:TSLA) already made a commitment to invest in the gigafactory. The Japanese conglomerate wants to become a major partner/sole manufacturer of batteries for the gigfactory.