California May Relax Regulations Just for Tesla 'Gigafactory'

Jun 07, 2014 10:11 AM EDT | Jordan Ecarma

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Right after word that Tesla is considering breaking ground on three sites for its billion-dollar battery plant, California lawmakers have made it clear that they want the world's biggest lithium-ion factory in their state.

Senate President Pro Tempore Darrell Steinberg, a Sacramento Democrat, and Senator Ted Gaines, a Republican from Roseville, have proposed a bill that would allow for "changes to regulatory and environmental processes to expedite groundbreaking" for the $5 billion project, reported.

"Speed to execution has always been key to this project," Diarmuid O'Connell, Tesla's vice president of business development, told Bloomberg by phone. "Any effort which accelerates our ability to break ground and start to build this factory is a good thing."

A spokesman for Steinberg said Tesla has been looking at the former Mather Air Force Base near Sacramento, which closed in 1993, as well as other California sites.

"It's important to land the gigafactory in California where the innovation started," Gaines told Bloomberg in an interview. "We ought to be in the business of creating middle-class jobs."

The electric car company announced plans earlier this year to build a factory to produce lithium-ion cells, reducing battery costs by around 30 percent. After being completed, the plant is expected to employ 6,500 workers and boost the local economy.

Tesla has reportedly been eyeing Arizona, Nevada, New Mexico and Texas for the project and earlier said it planned to break ground in two states.  

CEO Elon Musk hasn't specified which states are ahead in the running or when Tesla will announce the factory location. The Palo Alto, Calif.-based company has raised $2.3 billion through convertible note sales to build the factory.

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