Tesla Announces Plans to Build its Next $1.1 Billion Gigafactory in Austin

Tesla has picked Austin for its $1.1 billion Gigafactory that will make Cybertrucks, Semi, Model 3, and Model Y electric vehicles.

Elon Musk, Founder and CEO of Tesla, made the announcement Wednesday during Tesla’s second-quarter earnings call with analysts.

“We’re going to make it a factory that’s going to be stunning. It’s right on the Colorado River,” Musk said. “We’re actually going to have a boardwalk where there is going to be a hiking and biking trail. It’s going to be basically an ecological paradise: birds in the trees, butterflies, fish in the stream. It’s going to be open to the public as well.”

Tesla’s plant will be located in eastern Travis County on 2,100 acres at SH 130 and Harold Green Road. It’s five minutes from the Austin-Bergstrom International Airport and about 15 minutes from downtown, Musk said. The site is currently a sand and gravel site that houses a concrete batch plant. Tesla paid $5.3 million for the various parcels of land, according to its filing with the Texas Comptroller’s Office.

In reports submitted to Travis County government officials, Tesla representatives have said they wanted to begin construction on the plant in the third quarter of 2020.

Tesla, based in Palo Alto, makes electric cars and last year it launched the Tesla Cybertruck, with prices starting at $39,000. It is expected to enter production next year. Telsa’s main plant is in Freemont, California.

Tesla plans to grow its California operations as well as the Texas site, Musk said.

“This is a nice split between California and Texas,” he said.

Musk also gave a shoutout to Tulsa, Oklahoma, which was in the running for the new plant location, along with Austin. Musk said he would keep Tulsa in mind for future expansions.

The Tesla electric vehicle plant will create 5,000 new jobs. And Tesla has pledged to hire at least 50 percent of its employees from Travis Country. Tesla’s jobs will pay more than $35,000 a year with benefits including equity in the company or its cash equivalent.

Photo courtesy of Gov. Abbott

Governor Greg Abbott tweeted a picture of himself with Musk and issued a statement calling Tesla “one of the most exciting and innovative companies in the world.”

“Texas has the best workforce in the nation and we’ve built an economic environment that allows companies like Tesla to innovate and succeed,” Abbott said. “Tesla’s Gigafactory Texas will keep the Texas economy the strongest in the nation and will create thousands of jobs for hard-working Texans. I look forward to the tremendous benefits that Tesla’s investment will bring to Central Texas and to the entire state.”

Last week, Travis County Commissioners voted to approve a 20-year economic incentive package for the Tesla project, which was dubbed the Colorado River Project.

“In addition to the 5,000 new jobs and $1 billion facility investment, Travis County has been able to take a tract of land that paid $64,000 in tax revenue over 10 years and turn it into a tract that will pay $8 million in tax revenue during the same period,” Travis County Judge Sam Biscoe said in a news release. “I am proud of the agreement we have reached. It strikes a balance between incentivizing Tesla, securing significant community benefits, and ensuring the protection of workers and the environment.”

The Tesla plant faced some pushback from local residents and union leaders. Several people spoke out against the plant during weeks of virtual meetings of the Travis County Commissioners Court. Their main concerns were that Tesla was not paying enough for workers to live in the Austin area and they wanted reassurances that the labor force would be treated well during the COVID-19 Pandemic, including construction workers. Others spoke out against giving tax breaks to Musk, a billionaire and Tesla, now one of the largest automakers in the world. There were also concerns about increased traffic and plant emissions impacting the environment.

The Del Valle Independent School District board of trustees also approved a tax incentive deal for Tesla worth nearly $50 million over 10 years.

Tesla representatives have said they plan to work closely with the Del Valle school district as well as local colleges on workforce development.

“We are excited to welcome our new neighbors Tesla into the DVISD community,” Del Valle ISD Board of Trustees President Rebecca Birch said in a news release. “From the start, their support, generosity, and commitment to our students has been unwavering. Based on the overwhelmingly positive feedback at both of our public board meetings, this sentiment is shared not only with our board and superintendent, but our community at large. As demonstrated in other locations, Tesla can make a big impact on student learning. We are looking forward to developing multiple pathways to enrich our students’ and community’s lives with programming and employment opportunities. We are confident that Tesla will be ‘DV Proud’ partnering with us on the journey of preparing students for a successful future.”

The Texas plant will be Tesla’s third gigafactory in the U.S. and fifth worldwide. It already has gigafactories in Nevada and New York and a gigafactory in Shanghai, China, and a new one in Berlin, Germany. The factory in China began producing vehicles this year. The Germany plant is still under construction.

“The long term sustainable advantage of Tesla is manufacturing,” Musk said.

The Greater Austin Chamber of Commerce estimates for every position created at the Gigafactory, an estimated four indirect and induced jobs will be created in the region.

Gary Farmer, the Chair of Opportunity Austin, the Greater Austin Chamber of Commerce’s five-county economic development initiative, said: “Tesla’s decision to locate its news Gigafactory in Austin will expand and enhance our innovative culture while also providing new and exciting career opportunities for all segments of our Central Texas workforce.”

“The company’s pioneering spirit and advanced manufacturing technologies will be instrumental in our region’s economic recovery and our sustainable growth for the longer term,” he said.