News Column

Is California Going to Land Tesla's Battery Plant?

July 29, 2014

By Reed Fujii, The Record, Stockton, Calif.

California's Stockton appears to be the leader for Tesla's $5 billion battery plant if the state lands it. (file photo)
California's Stockton appears to be the leader for Tesla's $5 billion battery plant if the state lands it. (file photo)

San Joaquin County would be the most likely site for Tesla's proposed $5 billion battery factory if the electric car maker decides to build it in California, regional economists agreed Monday.

But that selection remains uncertain, as Tesla initially focused on just four states: Texas, Arizona, New Mexico and Nevada.

The Los Angeles Times reported Monday that Stockton appears to be a leading in-state contender, citing economists and business development experts.

Stephen Levy, director of the Center for Continuing Study of the California Economy, confirmed the opinion he gave the Times.

"I said that Stockton was the clear winner, meaning first choice among California locations, for several reasons," he said, referring to the metropolitan area that includes all of San Joaquin County.

"(It) would give Tesla the lower land cost of the Stockton area but with full access to the labor force and suppliers of the Bay Area."

The other states, however, offer even lower real estate costs, as well as lower labor costs, plus less government regulation and taxes.

Competition for the Tesla battery plant is fierce, with state officials offering packages of tax cuts and other incentives.

"This is the most coveted economic development target in the Western U.S. right now," said Jeffrey Michael, director of the Business Forecasting Center at University of the Pacific.

He, too, sees the San Joaquin County area as a good candidate for Palo Alto-based Tesla's project.

"It seems to me a location in the northern San Joaquin Valley would be the most logical in California," Michael said Monday.

He noted it is close to Tesla's assembly plant in Fremont; that former NUMMI facility sourced many of its parts and supplies from operations in San Joaquin County; and Tesla is developing a parts factory in Lathrop.

Tesla, like many high-tech companies, will almost certainly maintain its corporate headquarters in the Bay Area, Michael said.

"But like a lot of tech companies, the question is, as they expand production, are they going to expand it in California or somewhere else?"

Shelley Burcham, vice president of the San Joaquin Partnership, said the countywide economic development agency had made its pitch for the battery plant but could not vouch for the Times story putting Stockton ahead of the pack.

"I'd love for it to be, but it's not my headline," she said.

"There has been a lot of different sites as (other) economic development agencies submit their best sites," she said.

Burcham also noted that Tesla is moving forward on establishing a parts plant in a 430,000-square-foot former Chrysler distribution center in Lathrop.

"Having them located so close to their plant in Fremont just makes sense," she said.

___

Contact reporter Reed Fujii at (209) 546-8253 or rfujii@recordnet.com. Follow him on Twitter @ReedBiznews.

Original headline: Report: Stockton best site for Tesla plant


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Source: (c)2014 The Record (Stockton, Calif.) Visit The Record (Stockton, Calif.) at www.recordnet.com Distributed by MCT Information Services


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