Tesla Looks to California for New Battery Manufacturing Plant
Tesla Motors Inc. may be setting its sights on the Golden State. The automobile manufacturer has added California to its list of potential locations for its much-hyped $5 billion Gigafactory.
Initially, California wasn’t much of a contender, but the longer the site-selection process continues on, the better their odds are. After six months and a few proposed tax breaks and regulations by California lawmakers intended to lower costs and speed up construction, Tesla—based in Palo Alto—might be interested in building the factory close to home.
“California has set into play various legislative proposals and actions that have enabled it to come back into consideration,” Tesla spokesman Simon Sproule told the Phoenix Business Journal. "Discussions have taken place between us and various representatives of the state and the overtures they are making and conditions they are proposing place them in a better position for consideration.”
California is pushing to land the investment, which would include the creation of 6,500 jobs. The Gigafactory would be a substantial boon to the state’s economy, especially after Toyota Motor Corp. announced its plans to relocate its U.S. headquarters from Los Angeles suburb Torrance to Dallas, Texas.
Last month, Sen. Ted Gaines, a Republican, and Sen. Darrel Steinberg, a Democrat, announced their bill to lure the major manufacturer their way. California Senate Bill 1309 declares intent to streamline regulatory and environmental permitting.
“I will do everything in my power to have California land this factory," California State Sen. Gaines told the Wall Street Journal. “It's very important for California and sends a message across the country that we are open for business.”
Arizona is also in the running, as several cities and plots of land within the state have been proposed as possible sites, including Tucson and a vast expanse of vacant land in Surprise. But California, Arizona, New Mexico and Nevada may all lose out to Dallas. The Dallas Business Journal recently reported that Tesla is also considering 700 acres in Dallas for the Gigafactory. Reportedly, if Tesla picks the southern Dallas County site, transportation officials say nearly $200 million will be available to finish transportation improvements in the area.
IMF: Variants Can Still Hurt Manufacturing Recovery
After a year of on-and-off manufacturing in the US, UK, and the eurozone, demand for goods surged early last week. Factories set growth records in April and May, suppliers started to recover, and US crude hit its highest price point since pre-COVID. As vaccination efforts immunise much of the US and UK populations, manufacturers are now able to fully ramp up their supply chains. In fact, GDP growth could approach double-digits by 2022.
Now, the ISM productivity measure has surpassed the 50-point mark that separates industry expansion from contraction. Since U.S. president Biden passed his US$1.9tn stimulus package and the UK purchasing managers index (PMI) increased to 65.6, both sides of the Atlantic are facing a much-welcomed manufacturing recovery.
Lingering Concerns Over COVID
Even as Spain, France, Italy, and Germany race to catch up, and mining companies pushed the FTSE 100 index of list shares to a monthly high of 7,129, some say that UK and US markets still suffer from a lack of confidence in raw material supplies. Yes, the Dow Jones has made up its 19,173-point crash of March 2020, and MSCI’s global stock index is at an all-time high.
Yet manufacturers around the world realise that these wins will be short-lived until pandemic supply chain bottlenecks are solved. If we keep the status quo, consumers will pay the price. In April, inflation in Germany reached 2.4%, and across the EU’s 19 member countries, overall prices have increased at an unusual pace. Some ask: Is this true recovery?
IMF: Current Boom Could Falter
Even as Elon Musk tweeted about chip shortages forcing Tesla to raise its prices, UK mining demand skyrocketed; housing markets lifted; and the pound sterling gained value. The International Monetary Fund (IMF), however, cautioned that manufacturing recovery won’t last long if COVID mutates into forms our vaccinations can’t touch. Kristalina Georgieva, Washington’s IMF director, noted that fewer than 1% of African citizens have been vaccinated: “Worldwide access to vaccines offers the best hope for stopping the coronavirus pandemic, saving lives, and securing a broad-based economic recovery”.
Across the globe, manufacturing companies are keeping a watchful eye on new developments in the spread of COVID. Though US FDA officials don’t think we’ll have to “start at square one” with new vaccines, the March 2021 World Economic Outlook states that “high uncertainty” surrounds the projected 6% global growth. Continued manufacturing success will in large part depend on “the path of the pandemic, the effectiveness of policy support, and the evolution of financial conditions”.
Mathias Cormann, secretary-general of the Organisation for Economic Co-Operation and Development (OECD) concurred—without global immunisation, the estimated economic boom expected by 2025 could go kaput. “We need to...pursue an all-out effort to reach the entire world population”, Australia’s finance minister added. US$50bn to end COVID across the world, they imply, is a small investment to restart our economies.