Tesla is looking for locations in the central United States to build a new factory for the company’s electric pickup truck. Cybertruck, a wedge-shaped pickup, is expected to go into production in late 2021 and start selling for a price of just under $40,000. By publicizing Tesla’s plans to construct a factory for the truck, the firm is repeating a strategy used in 2014 to score a $1.3 billion incentive package from Nevada. The state lured the company’s massive battery factory there after Tesla held a bake-off in which Arizona, California, New Mexico and Texas were the finalists that came up short.
States with right-to-work laws that prohibit unions from requiring prospective hires to join their membership are likely to be contenders for Tesla’s facility, writes Industry Week (March 11, 2020). Government incentives will also play a role in Tesla’s decision-making on a plant location, along with logistics costs, access to big, talented workforces, and quality of life.
Tesla recently completed construction of its newest plant in China and started delivering locally assembled Model 3 sedans to consumers in January. It’s also planning a factory near Berlin.
Last month, Elon Musk hinted that Tesla could build a factory in Texas. The Texas Enterprise Fund, created by the state’s legislature, has become one of the largest payers of economic-development incentives in the nation. Texas offered $2.3 million to entice SpaceX, the rocket company Musk founded and runs, to locate a launch facility in Brownsville.
Classroom discussion questions:
- What are the most important location factors for Tesla’s new plant?
- What kind of incentives did Amazon seek when it announced its search for a second HQ last year? (Hint: see our post on the topic).