Tesla Closes Deal On Battery Factory In Nevada

Tesla will begin construction on a lithium-ion battery factory on an open land in Nevada.

Tesla Roadster

Tesla closed a deal that will give them 980 acres of land in Nevada to build a lithium-ion battery factory for the auto company, said Lance Gilman, the principal and partner for the industrial area where the giga-factory will be built. 

Gilman told Fortune that Tesla not only gained the land for free, but negotiated a $1.3 billion package of economic-development incentives for the state of Nevada. The soon-to-be factory is located a little outside Reno, and will give jobs to 6,500 people.

The whole production will cost about $5 billion when completed by 2020. $43 billion was paid to the industrial park's owners where the factory is being built, in order to construct a roadway through the area. The road will be called the 'USA Highway', and will provide shorter commutes for workers as well as open more of the surrounding land for future development.

The factory has a plan to produce 500,000 lithium-ion batteries a year, which will cut battery costs by 30%. This will help the Tesla cars be more affordable, which now stands at $70,000 for the Model S. After 2017, the car will presumably be around $35,000, according to CEO Elon Musk.  

The factory will generate the economy for Nevada, and will use renewable energy to produce the batteries. The Tesla cars, which run on these lithium-ion batteries, don't use gas and will be accessible by the average American. 

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