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Three Reasons Tesla Picked Nevada for Gigafactory

Tesla Gigafactory illustration

Last Friday, the Omaha Chamber of Commerce arranged to have Michael Mullis, the CEO of J.M. Mullis, Inc. give an hour-long talk on the Gallup campus. Mullis' firm specializes in finding locations for companies to either relocate or expand; many of them Fortune 500 organizations.

What attracted me to the 7:30 AM event downtown was the promotional announcement that he would be talking about Tesla's Gigafactory site location and how it is impacting the whole economic development landscape, especially for cities and states looking to attract companies and jobs. Due to an accident on the freeway, I was about 10 minutes late in arriving, so if he mentioned Tesla or the Gigafactory in his opening remarks, I'll never know, but from the time I arrived he made zero reference to what I thought was the topic of the talk. Instead he walked in general terms about what economic development staff need to consider when seeking to attract new companies or retain current ones. It was all highly interesting and informative, but I was disappointed that he didn't talk about Tesla.

So, I went up to him afterward and asked. What did he think of the selection of the site outside of Reno, Nevada? His answer?

"I think it's a bad decision," he said bluntly. "Besides Nevada's legislature still hasn't approved their incentive package for Tesla."

"I know," I acknowledged, having just posted the story on EV World's news feed earlier.

"Musk has already broken ground outside Reno," Mullis noted, adding that Elon Musk's decisions are often politically motivated, making a reference to Space X in Texas.

Just as I was about to pursue this thread further, an attractive blonde business woman walked up and started talking to him, but not before he intriguingly added, "I am doing a similar search for Tesla's biggest competitor."

"That's a story I'd like to follow up on," I added just as the blonde handed him her card.

End of conversation.

There was a lot to mull over in that brief exchange, which I'll likely never get to explore with Mullis, though I did hand him my card and emailed him a follow up later that day. He's not responded. However, I do question his comment about it being a bad decision.

One of the more obvious reasons for choosing Nevada over, say, Texas or New Mexico is the Reno's site's relative proximity to the assembly plant in Fremont, California; the newer parts facility going up in Lathrop, CA just to the east, as well as corporate headquarters in Palo Alto. Reno to San Francisco is just over 200 miles or about 4 hours by Interstate 80. There are three Supercharger stations along the route: Vacaville, Folsom, Truckee.

But perhaps just as important as proximity is the question of energy. Musk has promised that the Gigafactory will be powered by renewable energy. The rendering at the top of the page is an illustration of what the plant may look like. It includes giant solar panel fields and on a distant ridge filled with wind turbines.

What it doesn't show is maybe the deal clincher: geothermal.

Today, I received an email that included the graphic displayed below. It shows the size and location of geothermal energy plants in the US southwest. Notice where most of the projects are concentrated. They are inside the box near the California/Nevada border, right smack in the area where Tesla is building its Gigafactory.

Geothermal energy projects in US Southwest

As we all are aware, the sun only shines during the day and wind can be pretty variable. The beauty of geothermal, tapping the superheated brine below the ground is that it's dispatchable. According to SNL, the people who prepared the geothermal chart, "geothermal energy now provides 2,856 MW of operating generation in the U.S…." They noted, "Of the 415 MW in advanced development or under construction, roughly 66%, or 272 MW, is located in Nevada." And virtually all of that is in the Nevada elbow.

One of the more interesting aspects of geothermal is that it also may prove to be a reliable and cheap source of lithium salts. A startup firm called Simbol has developed a method to extract lithium from geothermal brine and are aiming to have their first facility in production by 2017, the same year Tesla is planning to commence battery production at its Gigafactory. While the Simbol facility is located in the Imperial Valley, the three dots at southern end of California on the chart, it should be relatively cost effective to ship the processed lithium carbonate up to Reno by truck or train. Presumably, the geothermal fields in central Nevada might also have the right chemistry for extracting lithium.

As for the question of solar and wind power, the two maps below suggest that the central Nevada location is a good choice for tapping both.

So, while I may never know all the reasons why Musk and the Tesla team settled on Reno, one thing I do know, at least from a renewable energy perspective, they could have picked far worse locations.

Oh yes, and did I mention Nevada's underground aquifers?

Nevada Wind Energy Resources


Note the relatively high wind regime just east of Reno.

US Solar Energy Resources

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