Tesla Announces Austin as Site for New $1.1 Billion Gigafactory
Tesla has officially selected Austin, Texas, as the location for its next U.S. manufacturing hub—a massive 4-5 million square foot facility costing $1.1 billion. The factory will produce the highly anticipated Cybertruck, Tesla Semi, and Model Y/3 vehicles for East Coast markets.
Key Details About the Austin Gigafactory
- Location: East of Austin near the airport
- Size: 4-5 million square feet
- Investment: $1.1 billion
- Production Focus: Cybertruck, Tesla Semi, Model Y, and Model 3
- Timeline: Construction begins in 2020
An “Ecological Paradise” with Public Access
CEO Elon Musk described the future facility as an “ecological paradise” featuring:
- Public boardwalks
- Bike lanes
- Open access areas (unlike the restricted Fremont factory)
Strategic Expansion of Tesla’s Global Manufacturing Network
The Austin facility joins Tesla’s growing portfolio of factories worldwide:
- Fremont, California: Produces Model S/X/3/Y (will continue operations)
- Reno, Nevada (Gigafactory 1): Battery packs and electric motors
- Buffalo, New York: Solar panel assembly
- Shanghai, China: Operational since late 2019
- Berlin, Germany: Currently under construction
Why Austin Won the Bidding War
The site selection process became public in March 2020 when Musk tweeted about seeking a central U.S. location. While Nashville and Tulsa were considered, Austin emerged as the frontrunner due to:
- Favorable incentives packages (see below)
- Strategic geographic position for East Coast distribution
- Existing tech talent pool
Breakdown of Texas Incentives Package
Tesla secured significant tax benefits in exchange for job creation:
- Total tax abatements: Minimum $61 million
- Job requirements:
- 5,000 total jobs
- 25 “qualifying” jobs at $74,050+ salary
- Remainder at $47,147 average
Key Components:
- Del Valle School District: $46.6 million property tax abatement
- Travis County: $14.7+ million over 10 years with performance-based escalators:
- 70% rebate at $1.1B investment
- 75% at >$1.1B
- 80% at >$2B
Penalties apply if Tesla fails to meet investment/job targets.
The Tulsa Story: Oklahoma’s Valiant Effort
While Tulsa, Oklahoma made a strong push with an unprecedented statewide campaign, Austin ultimately prevailed. Oklahoma officials remain optimistic about attracting Tesla suppliers to leverage their:
- Central U.S. location
- Multi-modal transportation infrastructure (rail/road/water)
- Available workforce
What This Means for Tesla’s Future
The Austin Gigafactory represents:
- Production capacity expansion for upcoming models
- Geographic diversification of manufacturing
- Continued growth despite pandemic challenges
With construction starting imminently, Tesla moves closer to realizing its ambitious production goals while strengthening its U.S. manufacturing footprint.
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