Elon Musk announced that Tesla is scouting locations to build its in-development Cybertruck in the U.S., likely triggering a state-by-state competition similar to one he set off six years ago.
Tesla will add a factory to produce both the electric pickup and the Model Y crossover for customers on the East Coast, the chief executive officer tweeted Tuesday. He didn't elaborate on which states Tesla is considering beyond saying that it will be somewhere in the central U.S.
By publicizing Tesla's plans to construct a factory for the truck, set for production late next year, Musk, 48, is repeating a strategy used in 2014 to score a $1.3 billion incentive package from Nevada. The state lured the company's huge battery factory there after Musk angled for tax incentives and cash grants from several states, and Arizona, California, New Mexico and Texas were the finalists that came up short.
Musk unveiled the Cybertruck in November and pitched it as a radically different option from the highly lucrative pickups produced by Ford, General Motors and Fiat Chrysler Automobiles. A botched demonstration in which Tesla's design chief cracked supposedly shatter-proof glass generated enormous buzz and prompted the company to sell T-shirts featuring the broken windows.
States with right-to-work laws that prohibit unions from requiring prospective hires to join their membership are likely to be contenders for Tesla's facility, said John Boyd, principal of the Boyd Co., a manufacturing site-selection firm in Princeton, N.J.
Tesla took advantage of its soaring stock price by raising $2.31 billion last month. The company disclosed just before announcing its equity offering that its annual capital expenditures budget will be as much as $3.5 billion through 2022, more than double what it spent in 2019.
Tesla shares closed down 1.7% at $634.23 on Wednesday in New York. The stock is up 54% this year.
Government incentives will play a role in Tesla's decision-making on a plant site, along with logistics costs, access to large, talented workforces, and quality of life, Musk told The Wall Street Journal in an email.
Tesla recently completed construction of its newest plant in China and started delivering locally assembled Model 3 sedans to consumers in January. It's also planning a factory near Berlin.
Last month, Musk hinted that Tesla could build a factory in Texas. The Texas Enterprise Fund, created by the state's Legislature under former Gov. Rick Perry, has become one of the biggest payers of economic-development incentives in the nation.
Texas offered $2.3 million to entice SpaceX, the rocket company that Musk founded and runs, to put a launch facility in Brownsville, on the Gulf Coast near the Mexican border. Tesla's computer chip team is based both in Palo Alto, Calif., where the carmaker has its headquarters, and in Austin, Texas.
The company's sole U.S. auto-assembly plant is in Fremont, Calif., which makes the Model S, X and 3 and has begun producing the Model Y crossover.
Business on 03/12/2020