Thursday, September 04, 2014

Did lithium mines seal the deal for Tesla battery factory going to Nevada?

Tesla has chosen Reno, Nevada as the site for its  $5 billion factory to supply lithium batteries for its electric cars, beating out competitors including Arizona. 

A story today by Dorothy Kosich at quotes John Boyd, a principal of the site selection firm The Boyd Company, as telling the Wall Street Journal, “I think the single most important factor is the [site’s] low-cost green power, including solar, wind and geothermal energy for the plant. He also cited Nevada’s lack of corporate and personal income taxes as positive factors."

Arizona may have sent mixed messages on this front, offering tax breaks and other incentives, but with concurrent debates at the Arizona Corporation Commission over continuing utility subsidies for solar power, and proposals to roll back the requirement for utilities to provide 15% of their electrical power from renewable energy resources.

Dorothy also points out that  "Nevada currently is home to the only brine lithium operation in the United States. Rockwood Lithium, which produces lithium carbonate from brines near Silver Peak, Nevada, has invested $75 million in an expansion of its U.S. lithium production. Pure Energy Minerals holds contiguous claims near the Silver Peak operation."   She notes that Western Lithium’s King Valley project is often promoted thusly: “Nevada is uniquely positioned to support the world-wide increase in renewable energy production and demand for electric vehicles through lithium mining—the key ingredients to the high-performance batteries, which will power electric vehicles and be used in utility-scale energy storage projects.”

How much did Nevada's support for producing the minerals needed for manufacturing batteries play into Tesla's decision?

[updated 9-6-14]


  1. Anonymous3:07 PM

    Here is the real reason Tesla choose Nevada and it's not because of all the high profile mining opposition groups.

    Nevada wins Tesla gigafactory, but at what cost?

    In choosing Nevada for its $5 billion gigafactory, Tesla Motors apparently did not check CNBC's 2014 rankings of America's Top States for Business. If company officials had, they would have found a state that finished 29th overall, with the second worst education system in the country (behind neighboring Arizona).

    But Tesla had other priorities, including a generous incentive package from the winning state. Nevada delivered that—and then some.

    In July, company co-founder Elon Musk said he expected $500 million in assistance from the state where the battery plant would be located. Nevada more than doubled that—$1.25 billion over 20 years, including a near total tax break for the first decade. One watchdog group that tracks state subsidies to business says it is the latest step in a race to the bottom, with states spending big money for trophy deals.

    But Republican Gov. Brian Sandoval said the long-term benefits to Nevada far outweigh the cost of nearly $200,000 per job.

  2. Thanks - good information. Sounds like this decision is going to be parsed and analyzed in more ways because of the scale of breaks being offered.

  3. Nevada has no world class lithium deposits. Silver Peak is mediocre and others like Western Lithium are Jr Mining stock promotion plays. Choosing Nevada had nothing to do with lithium.