Eight words, give or take, and a state-by-state scramble was on. “Scouting locations for Cybertruck Gigafactory. Will be central USA,” Elon Musk wrote on Twitter on Tuesday, March 10, 2020. A second tweet followed: “Model Y production for east coast too.”
That was the whole announcement. No state named, no investment figure, no date. As ever, the detail that matters is what he left out.
A familiar playbook
Bloomberg noted that Musk has done this before. In 2014 he held what amounted to a bake-off among Arizona, California, New Mexico and Texas for Tesla’s battery plant, and Nevada walked away with a $1.3-billion incentive package. Publicising the Cybertruck search first is the same trick, run again, with the Cybertruck due to start production late the following year.
Musk did offer one clue in an email to the Wall Street Journal. Government incentives would matter, he said, but so would logistics costs, access to big and talented workforces, and quality of life.
John Boyd, who runs a site-selection firm in Princeton, New Jersey, has a view on where the money will go. States with right-to-work laws are the likely contenders, he said. “I’d put Tennessee, Indiana, Kentucky, Texas and Michigan on the list,” Boyd said, calling it “a trophy project for the automotive sector.”
TechCrunch, for its part, reported that Tesla was already talking with Nashville officials, citing a source familiar with the discussions. It also mentioned a short list of cities that nobody has published. Officials in Missouri, Colorado and Oklahoma meanwhile courted Musk in public on Twitter, according to Jalopnik.
What Tesla already had
The company’s only auto-assembly plant in the US at that point sat in Fremont, California, building the Models S, X and 3, and starting on the Model Y. Panasonic and Tesla jointly ran a lithium battery factory in Sparks, Nevada, and a solar cell factory in Buffalo, New York. Business Insider pointed out that both had run into trouble in recent months.
Abroad, the picture was busier. A Shanghai plant had just been finished and locally assembled Model 3 sedans started reaching Chinese customers in January. A Berlin-area factory was planned too. Engadget observed that Musk had polled his followers only hours earlier on whether that German site needed a “mega rave cave”.
That is a fair reason for caution. A tweet in February had asked people whether to build in Texas, and Engadget’s Richard Lawler admitted it was hard to tell which of Musk’s posts to take seriously. Musk had also hinted in February that Texas could get a Tesla factory. Texas has form here: its Enterprise Fund, set up under former governor Rick Perry, has become one of the largest payers of economic-development incentives in the country.
Money and expectations
The cash looked ready. Tesla had taken advantage of a soaring share price to raise $2.31 billion the month before, and it told investors its annual capital spending could reach $3.5 billion through 2022, more than double the 2019 figure.
The truck itself carried plenty of baggage. Musk unveiled the Cybertruck in November 2019 at a launch event where a demo to show off shatter-proof glass ended with cracked windows, and Tesla sold T-shirts of the result. Musk said the company had collected more than 250,000 pre-orders.
Tesla still had to prove it could build what it sold. Business Insider noted that it had repeatedly missed production goals. A factory in the American interior was a promise, not yet a plant.
Sources
- Tesla on the hunt for Cybertruck plant location in central U.S. (Los Angeles Times / Bloomberg)
- Elon Musk says Tesla is scouting locations for a Cybertruck factory in the 'central USA' (Business Insider)
- Elon Musk is 'scouting' new US locations for Cybertruck, Model Y production (Engadget)
- Will Elon Musk Build the Tesla Cybertruck Factory in Nashville? (InsideHook)
