Austin Nabs Tesla Gigafactory Spot But Much More

AUSTIN, TX—Tesla Inc.’s latest gigafactory will be built near Austin, CEO Elon Musk announced during the quarterly earnings call on Wednesday. The manufacturing facility will be built on 2,000 acres some 15 minutes from downtown Austin, Musk said.

The newest Tesla factory will focus primarily on the company’s all-electric pickup vehicle, the Cybertruck, but also manufacture the automaker’s Semi, Model 3 and Model Y vehicles for the eastern half of North America, he added.

“We’re also very excited to announce that we’re going to be building our next gigafactory in Texas. It will be about five minutes from Austin (Bergstrom Inter)national Airport and 15 minutes from downtown Austin,” Musk said. “It’s right on the Colorado River, so there’s actually going to be a boardwalk where there’ll be a hiking and biking trail. It’s going to basically be an ecological paradise, birds in the trees, fish in the stream and they will be open to the public as well. So if anyone is interested in looking at a Giga Texas with engineering, production, whatever the case may be, please let us know. Now at the same time, I want to say we will continue to grow in California, but we expect California to do Model S and X for worldwide consumption, and 3 and Y for the western half of North America.”

Tesla had earlier reportedly zeroed in on Texas and Oklahoma for the gigafactory manufacturing plant. Last week, Travis County offered the automaker $1.1 billion in tax breaks. Texas governor Gregg Abbott lauded the development.

“Tesla’s Gigafactory Texas will keep the Texas economy the strongest in the nation and will create thousands of jobs for hard-working Texans,” said Abbott.

But, the development of Giga Texas is more than a simple corporate move, says Ari Rastegar, founder and CEO of Rastegar Property Company.

“The profundity of Tesla moving to Austin is so much greater than just simply a company of Tesla’s status moving to Austin in an isolated incident,” Rastegar tells GlobeSt.com. “When you take companies such as Google having their second largest office in the world, Apple with their 140-acre campus, Dell being in Round Rock, Oracle’s new major campus, Amazon’s acquisition in Whole Foods (being an Austin-based company), as well as Facebook, all of that together created this massive synergy for what Austin is becoming. Tesla adding the gigafactory is the linchpin. That’s the final moment where we now know that Austin is the next San Francisco. It certifies Austin’s station of not only now becoming a top 10 city of the United States, but with a Google Fiber infrastructure of the Internet and people relocating, leaving the urban corridor for cities and areas that have fast Internet and the ability to work from home, it represents something much bigger than where the actual gigafactory is going.”

The automaker currently assembles all its US electric vehicles at a single factory in Fremont, CA. Rastegar surmises that this location might give way to another announcement in Austin, despite Musk’s pronouncement on the earnings call this week.

“We believe that they’ll eventually move their global headquarters as well after this $1.1 billion acquisition. We understand the corridor off of 130 in Del Valle very well as we own 50 acres about five minutes away from the site and have done extensive research on the area. It’s going to invigorate that entire corridor, bringing homes and jobs,” Rastegar tells GlobeSt.com. “But what’s most interesting, is all the companies that support Tesla and all the ancillary mechanical parts that go into building the gigafactory products are what’s going to cause another huge surge in jobs and another huge surge in real estate prices in areas that normally didn’t have them. This is the game changer of all game changers. This is going to make Austin unworldly on the global stage.”

Before making the announcement about Tesla’s new Austin facility, Musk gave a nod to the team’s efforts in bringing about a successful quarter amid the financial crisis.

“I’d like to thank the Tesla team for exceptional execution in the second quarter despite tremendous difficulties,” Musk said. “They’ve done an incredible job, and it’s an honor to work with such a great team. I mean, there were so many challenges, too numerous to name, but they got it done and just what a great group to work with. And as a result, we were able to achieve our fourth consecutive profitable quarter. And although the automotive industry was down about 30% year-over-year in the first half of the year, we managed to grow deliveries in the first half of the year. So despite that massive industry decline, we actually went up.”