Tesla announces plans to build a game changing “Gigafactory”

Tesla Motors announced on Wednesday its plans to build a “Gigafactory” to produce lithium-ion battery cells, ramping up technology that could potentially revolutionize the utilities and auto industries. Designed to reduce cell costs “much faster than the status quo,” the Gigafactory aims to produce more lithium-ion batteries annually by 2020 than were produced worldwide last year, according to a Tesla blog post.

Tesla Motors Inc. (TSLA)’s plan to build what co-founder Elon Musk bills as the world’s largest battery factory could not only shake up the power industry but trigger a bidding war between states eager for the 6,500 jobs the $5 billion investment could create. The luxury electric-car maker announced yesterday that it’s selling at least $1.6 billion of convertible notes to finance the project and exploring locations in Texas, Nevada, Arizona and New Mexico for a 10 million-square-foot facility. Tesla declined to comment on whether any negotiations had begun. “This would rank as the most attractive industrial project out there,” said Dennis Cuneo, president of DC Strategic Advisors LLC and a former Toyota Motor Corp. executive who helped that carmaker select manufacturing sites.