Tesla Motors Inc. (Nasdaq: TSLA) has reportedly chosen a site in Nevada for the future home of the Tesla Gigafactory, a $5 billion project that is expected to revolutionize lithium-ion battery production.
According to sources at the Nevada governor's office, the location "[is] a go, but they are still negotiating the specifics of the contract."
Nevada's Governor Brian Sandoval will hold a press conference at 4 p.m. in Carson City, Nev., today (Thursday). A media advisory from the state said that the governor will make a "major economic development announcement.''
Tesla Motors Inc. (Nasdaq: TSLA) had been scouting locations in Arizona, California, Nevada, New Mexico, and Texas for the plant.
Chief Executive Officer Elon Musk has previously stated that he wants to begin construction by the end of 2014, and have the plant operational by 2017. The company's timeline calls for the plant to reach maximum capacity by 2020, at which point it will be able to supply power for more than 500,000 vehicles annually.
Tesla is expecting to spend around $5 billion on the construction of the factory, and will employ approximately 6,500 people at the facility.
In July, Tesla announced that the Japanese electronics giant Panasonic had joined as an investing partner in the new mega-factory. Panasonic will reportedly be investing between $200 and $300 million, but that number could climb as high as $1 billion.
Panasonic will be responsible for the equipment used to build the lithium-ion batteries. Tesla will be handling the costs of the buildings and the site.
The Tesla stock price was up more than 1% today following the report. Investors should expect another jump in TSLA stock if the governor's announcement does indeed deal with the Gigafactory.
Tesla shares have been trading at all-time highs this week, near $288 per share, following a new partnership in China and a stock recommendation from Stifel Nicolaus.
However, Money Morning's Chief Investment Strategist Keith Fitz-Gerald believes that the Tesla stock price is going much higher than that in the next year. And the Gigafactory is a major reason why...
Tesla Gigafactory Will Send TSLA Stock Soaring
"I believe TSLA stock will double within the next 12 months," Fitz-Gerald said. "This company is on track to see a stock explosion that will make its surge back in the spring of 2013 look like a speed bump."
Fitz-Gerald made that prediction on Aug. 19, and TSLA stock is already up almost 10% in that short time.
And according to Fitz-Gerald, one of the biggest catalysts that will continue drive the stock through 2015 is the Tesla Gigafactory.
"The announced plans for what Tesla is calling a Gigafactory mean that the company is pouring resources into slashing battery costs like never before," he said. "This 10 million square-foot factory will have a price tag of $5 billion... hefty, you might say, for a company whose earnings were less than half that in 2013."
"But the juice is worth the squeeze. That's because the Gigafactory will be a pioneer in mass production of cost-effective and high-quality battery packs that will give Tesla an even deeper competitive edge over its competitors going forward. It's going to be the largest lithium-ion battery manufacturing plant in the world."
But the Tesla Gigafactory isn't the only reason why Fitz-Gerald loves TSLA stock long term. Find out the other catalysts driving TSLA's profits, as well as a way to play TSLA at a fraction of its $284 per share cost...
Join the conversation on Twitter @moneymorning and @KyleAndersonMM using #Tesla
Related Articles:
- The Wall Street Journal: Tesla to Choose Nevada for Battery Factory