Tesla Confirms it Will Build $1.1B Factory in Austin!

Tesla Inc. has picked Austin for its next big factory.

CEO Elon Musk said July 22 the electric carmaker will build a gigafactory in Austin, ending weeks of speculation about whether the electric carmaker would pick the Texas capital or Tulsa, Oklahoma, for the project.

Tesla intends to build a 4 million- to 5 million square-foot manufacturing facility on a site off the State Highway 130 toll road near Austin-Bergstrom International Airport. The $1.1 billion project could employ about 5,000 workers with an average annual salary of $47,147.

Tesla, now the world’s most valuable automaker, plans to build its new Cybertruck at the plant, as well as its Model Y vehicles.

“We’re very excited to announce that we’re going to be building our next Gigafactory in Texas,” Musk said on a call with analysts as the company reported its second-quarter financials. Musk confirmed the site was the Austin Green location off SH 130, noting it was five minutes from Austin’s airport, 15 minutes from downtown Austin and about 2,000 acres in size. “We’re going to make it a factory that is going to be stunning — it’s right on the Colorado River,” he said. Musk said there would be a boardwalk and hike and bike trail along the river that’s open to the public. “It’s going basically to be an ecological paradise,” he said.

Travis County commissioners on July 14 approved tax rebates that could funnel millions of dollars back to Tesla (Nasdaq: TSLA) if it meets economic development goals. Del Valle Independent School District trustees on July 9 approved tax abatements for the project estimated to save the company $46.4 million over 10 years. State incentives could follow.

For the most part, Tesla’s investment is received with great fanfare in a city struggling under the weight of a pandemic and recession.

Developers and landlords on the east side of the city are salivating over the prospect of providing space to the workers that will be needed and the ancillary businesses that feed off a factory such as the one Tesla proposes.

Some local labor and environmental groups, however, have raised concerns about worker safeguards at Tesla, and a coalition of such organizations issued a statement July 15 criticizing the pay levels promised by the electric carmaker as well as its track record for workplace safety. Tesla representatives addressed the concerns when they briefed Austin City Council recently.

While the city of Austin has largely been cut out of the process so far, going forward municipal processes and perhaps politics will be a factor as various permits are secured.

Tesla operates factories all over the world. It has a major factory in Fremont, California, as well as gigafactories in Nevada and Upstate New York. The company is also building a gigafactory outside Berlin, Germany, and adding to its plant in Shanghai, China. Tesla expects those projects to wrap up in 2021.

  • Austin Business Journal

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