Nevada's Tesla Battery Factory Triggers Wave Of Follow-Up Business

Dec 29, 2014

Earlier this year, Tesla Motors chose Northern Nevada for its battery factory in exchange for a huge incentives package. It's a bounty for communities there that, until recently, have seen years of slow economic recovery. Will Stone of Reno Public Radio reported for NPR's Morning Edition on the impact of this factory.

Tesla's massive factory is being built at the Tahoe Reno Industrial Center outside Reno.
Credit TahoeReno.com

When Lance Gilman talks Tesla, it can feel like a return to the days of the Gold Rush, silver mining and pioneers.

"The new Comstock Lode is sitting right in front of us right now. There is going to be tremendous financial growth."

The Comstock was the lucrative silver deposit discovered here in the 1800s. Gilman believes Tesla's $5 billion battery factory holds the same promise.

"And they've chosen to locate here in Storey County in the Tahoe Reno Industrial Center. And that choice then triggered a tsunami wave of follow-up business."

Gilman runs this industrial park where the factory is being built, about 30 minutes outside Reno. At the top of a plateau, he points to a scene of cranes and equipment below.

"You can see that there's construction going on down there. They're putting footings in right now."

In a few years, the so-called gigafactory will churn out more lithium ion batteries than all the producers in the world combined. And Gilman says Nevada was the unlikely winner in a bidding war with states like California and Texas.

"Everybody was throwing huge amounts of financial support and commitments, etc., etc. Here's this little, old Storey County with 3,800 people in it. And to come out the winner, I think that's epic."

So, too, the gains. The factory will employ about 6,500 workers alone. Add in the indirect jobs, and that's more than five times the population of this small, rural County. The local construction unions say they'll have to nearly triple their numbers in the next five years to meet demand. And that's not the only industry playing catch-up.

"This is the machine shop. And manufacturing has slowly been emerging in the Northern Nevada market."

Jim New is dean of technical sciences at Truckee Meadows Community College. He says Tesla has brought a new cachet to this field.

"And when we started talking to prospective students about options that were out there, suddenly they were very interested in these types of programs, especially those tied to advanced manufacturing."

New says their graduates won't necessarily be working in Tesla's factory, but they will make parts for the assembly line, for example. Bernie Magness actually worked in construction during the housing boom. After years of unemployment, he's now a student in this manufacturing program.

"There was so much growth residentially and commercially going on that there wasn't enough carpenters to go around. And right now it's kind of, like, the same way. There's not enough machine operators to go around for the work."

The governor's office estimates a statewide economic impact of $100 billion over the next two decades. But Tesla didn't come cheap. The company received a package of incentives and tax abatements totaling more than a billion dollars. Tesla isn't going to pay property, payroll or sales tax for years.

"Who is going to pay for the services that the workers are going to use? Who is going to pay for the firefighters, the police, the schools?"

Bob Fulkerson is with the advocacy group The Progressive Leadership Alliance of Nevada.

"We always have this mentality about, well, we'll just figure that out down the road. You know, maybe there will be gold in the next Gold Rush, you know. It's this boom-and-bust mentality."

But Tesla's abatements are performance-based. And the increase in people working and living here will supply new revenue, says developer Lance Gilman:

"I'm going to suggest we just all get busy and earn our money. It's here. We only have it to lose."

And unlike the Comstock Lode, Nevada hopes Tesla will bring lasting prosperity.