Tesla will build its next US factory in Austin, Texas, CEO Elon Musk announced today, wrapping up a months-long search for a location to build the upcoming Cybertruck. Construction work is “already underway,” Musk said. “It started this weekend.”
Tesla was recently granted tens of millions of dollars in tax breaks from both the county in Texas where the factory will be built and from a local school district. The company was also considering Tulsa, Oklahoma, and Musk said Tesla would “strongly consider” it for future projects.
The new factory in Texas will be open to the public, Musk said, and that there will be a boardwalk and hiking and biking trails. “It’s going to basically be an ecological paradise. Birds in the trees, butterflies, fish in the stream,” he said.
In addition to the Cybertruck, Tesla will also build Model Ys and Model 3s destined for the East Coast, as well as the Tesla Semi, Musk said. It will be the company’s fourth factory in the US, following the vehicle factory in California, battery factory in Nevada, and solar factory in New York. Tesla also has a new vehicle factory outside Shanghai, China, and is building another factory outside Berlin, Germany.
The site where Tesla is building the factory consists of about 2,100 acres of land east of the Austin-Bergstrom International Airport, with about two miles of exposure to Texas’ Colorado river. It’s largely unused at the moment, though a sand and gravel mining company operates in the center of the development. In a June meeting with county officials, Tesla’s senior global director of public policy said this of the site:
The potential is just great for recreation, for beauty, and the vision of being able to potentially transform an old mining site into a sustainable factory with recreational opportunities — that’s just a vision that sits perfectly with our mission.
Tesla plans to hire up to 5,000 workers at an average salary of $47,147, with entry-level positions starting at $35,000. It will invest at least $1 billion and is planning to make a factory of between 4 and 5 million square feet.
“Tesla is one of the most exciting and innovative companies in the world, and we are proud to welcome its team to the State of Texas,” Texas Gov. Greg Abbott said in a statement. “Texas has the best workforce in the nation and we’ve built an economic environment that allows companies like Tesla to innovate and succeed. 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.”
It’s currently unclear what, if any, promises Tesla received from the state of Texas for choosing to build in the Austin area.
Kevin Stitt, the governor of Oklahoma, said in a statement that he will be “actively recruiting Tesla’s supplier base to Oklahoma,” and that just being a finalist has raised the state’s profile.
“Over the past few months, Tulsans and Oklahomans as a whole showed the nation and the world that our state is worthy of being one of two finalists for an innovative, cutting-edge company like Tesla,” Stitt said. “I wish Elon Musk and Tesla all the best. In fact, I wish them so much success they are forced to expand again, because I know just the place.”
Steve Adler, the mayor of Austin, said in a statement that the factory will be “an important economic boost in East Austin, especially as we fight the economic effects of the virus.”
“Tesla moving to Austin is exciting. It gives us three things we need in east Austin. It gives us thousands of good wage jobs that don’t need a 4-year degree. Its factory will be better for people and the planet,” Adler said.
Reached for comment Wednesday afternoon, Hector Nieto, the public information officer for Travis County, Texas, said that county officials had not been notified of any decision. “It’s like being invited to the prom with our dress and corsage on, but we’re still waiting for them to show up.”
Musk revealed that Tesla was looking for a spot to build a new factory back in March. “Scouting locations for Cybertruck Gigafactory. Will be central USA,” he tweeted on March 10th. Nashville, Tennessee was reportedly an early candidate, before Austin and Tulsa ultimately emerged as the finalists. Officials in (and residents of) Tulsa put on a lot of flashy moves, like painting a 70-foot-tall statue of an oil driller to look like Musk. Patel said last month that Tesla had held conversations with “nearly every state and governor East of the Rocky Mountains.”
While Tesla took its time working out a massive deal for its first Gigafactory in Nevada a few years back, the company was far more expedient this time around. The process only seemed to accelerate in May when Musk threatened to pull Tesla out of California over the public health orders that forced the company to close its vehicle factory there, and multiple reports soon sprouted that Austin and Tulsa were the finalists.
Not long after, Tesla started having public discussions about tax incentives for a possible deal in Austin. It was at one of those those meetings that many residents expressed concern about Musk’s behavior during the pandemic, and especially the battle he picked with Alameda County, where Tesla’s California factory is located. Local union members also repeatedly pressed officials during these meetings to get Tesla to agree to better wages and worker protections. Tesla did ultimately agree to some concessions, like paying food service and janitorial workers the same $15 per hour minimum wage that entry-level factory workers will make.
However, many more residents and local business owners expressed excitement during those meetings about the idea of Tesla building a factory in Austin. In the final meeting of the Travis County Commissioners Court, the policy-making and administrative arm of the local government, a common phrase emerged among those in support of bringing Tesla to Texas: that this was a “generational” opportunity that Austin shouldn’t miss out on.
Commissioner Jeffrey Travillion said his precinct, which is where the factory will be, represents “the greatest amounts of poverty and the smallest amounts of access to health, social, and economic resources” in the Austin area.
Travillion, who was advocating for approving the tax package in response to a request to delay the vote, said he felt the Tesla factory could help address those problems.
“If we are talking about a transformational process that will address poverty and opportunity in that area for generations, it would be difficult for me to accept that we have a consensus moving forward and we didn’t make a decision, and allowed this project to go to another market,” he said.
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