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Tesla picks Nevada for its battery-making ‘Gigafactory’

Tesla Motors’ plan to build a massive battery “Gigafactory” has fueled intense competition among five states, but it’s all over now.

The Gigafactory will be located in Nevada, CEO Elon Musk  and Governor Brian Sandoval announced in Carson City yesterday.

Tesla recently completed excavation work at a site in Reno, which will presumably become the factory’s actual location. The company has also said that it could build additional Gigafactories at some point in the future.

The $5 billion project spurred Nevada, as well as Arizona, California, New Mexico, and Texas, to put together incentive packages to lure Tesla and the 6,500 jobs it’s expected to create with the Gigafactory.

The factory will produce 50 gigawatt-hours of battery cells per year, enough for 500,000 cars, according to Tesla. Those batteries will be used primarily for the Model III electric car; production on this scale is required to reach the car’s roughly $35,000 target price.

In addition to helping produce cars that are good for the environment, the factory itself will be quite green.

Related: Tesla Model X crossover coming in 2015

Tesla says it will be powered by renewable energy (note the solar panels in the above rendering), and will be a “net zero-energy factory,” meaning the amount of energy consumed will be equal to that produced on site from renewable sources.

Groundbreaking will take place before the end of the year, and Tesla expects the Gigafactory to be operating in full swing by 2020.

That’s actually somewhat later than the original 2017 date discussed by the carmaker. That’s when the Model III is expected to go on sale, meaning the plant won’t be operating at full capacity – or won’t be operating at all – in time, even though Musk previously said the car couldn’t go into production without Gigafactory batteries.

Tesla is partnering with Panasonic – its current battery supplier and a shareholder – to operate the factory. The Japanese company will provide machinery and cash to get the factory up and running.

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