A charging Tesla Model S. Photo courtesy of Tesla Motors.
A charging Tesla Model S. Photo courtesy of Tesla Motors.

Tesla, billionaire Elon Musk’s luxury electric vehicle manufacturing enterprise, has ended the multi-state competition for a $5 billion battery factory that will employ 6,500 people and decided to concentrate its manufacturing in Reno – ruling out San Antonio.

Tesla is expected to make the formal announcement at a Thursday press conference in Carson City with Musk and Nevada Gov. Brian Sandoval sharing the stage.

San Antonio Economic Development Foundation President and CEO Mario Hernandez said he was notified Wednesday by Tesla officials of the decision.

“They didn’t really say why they chose Reno or why they didn’t choose San Antonio,” Hernandez said. “I think it’s safe to say they made the choice to locate the new operations as closely as possible to their vehicle manufacturing facility. They have to figure out ways to bring down their costs.”

Hernandez and other officials felt confident with San Antonio’s bid. What the city lacked in geographic proximity it made up for with other assets, notably the availability of inexpensive energy, a choice of 1,000-plus acre sites in Bexar County outside the city limits, and a growing supply of skilled auto manufacturing workers in a city with a more affordable and attractive lifestyle.

“Whatever Reno offers, the city won’t be able to match what CPS Energy put in the table,” said one local official. “But Reno is just across the state line, in their comfort zone.”

Reno’s proximity to the Fremont, Calif. Tesla manufacturing plant may prove to be the deciding factor as the advanced batteries produced by the facility are expected to power Tesla’s next generation of electric cars and supply batteries for other carmakers and utilities.

The “Gigafactory” is expected to play a critical role in Musk’s plan to make a more affordable, mass-market Tesla car. By producing 500,000 lithium-ion batteries a year by 2020, the goal is to drive the price of the batteries down.

According to Business Insider, “he plans to build multiple Gigafactories in the future.”

Correction: An earlier version of this story incorrectly stated that the press conference would held in Reno.

*Featured/top image: A charging Tesla Model S. Photo courtesy of Tesla Motors.

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Robert Rivard

Robert Rivard, co-founder of the San Antonio Report, is now a freelance journalist.