Gigafactory location finalists (© Tesla Motors, Inc.)Click to enlarge picture

Tesla has announced four states are finalists for the company's proposed gigafactory: Texas, New Mexico, Arizona, Nevada.

After teasing with a few small details last week, Tesla revealed more information on its proposed gigafactory that will provide lithium-ion batteries for its electric vehicles — and others? — for 30 percent less than what they cost now.

"The Gigafactory is designed to reduce cell costs much faster than the status quo and, by 2020, produce more lithium ion batteries annually than were produced worldwide in 2013," the company declared in a blog post yesterday afternoon.

The plant is expected to cost between $4 billion and $5 billion, with Tesla kicking in $2 billion, the company said. Once running at full capacity in 2020, the plant is expected to produce more than 500,000 batteries, matching Tesla's expected output of 500,000 vehicles.

Tesla's new factory will employ 6,500 people and will be located in one of four states: Texas, New Mexico, Arizona or Nevada. The location is due, in part, to the company's desire to use renewable energy resources, such as wind and solar, to power the plant.

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The choices for the site location are interesting. Texas has been fighting the automaker's efforts to sell its vehicles outside of the existing dealer franchise network for some time.

Tesla-backed bills that would have created an exemption to current state law restricting factory-owned dealerships failed to make it to the floor of the Texas House or Senate for voting last year, the Automotive News reported. The Legislature's regular session ended last May, and it won't meet again in a general session until 2015.

As for New Mexico, it was considered the early leader to be the home for the company's production plant. In fact, Gov. Bill Richardson announced the company was coming, but in a last-minute reversal, Tesla purchased the old General Motors/Toyota plant in Fremont, Calif. that currently builds the Model S. As a result, the developer involved in the deal for the New Mexico site, Rio Real Estate Opportunities, filed a lawsuit against the maker claiming fraud, breach of contract and other violations.

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The suit claims that Rio Real Estate was contracted to build the plant for $1.35 million per year for a period of 10 years, and in the run-up to the deal, the developer invested in environmental reports, local approvals and engineering resources, according to All those efforts cost the firm money, and Rio Real Estate claims that Tesla reneged on the deal after it signed a binding agreement in February of 2007.