Could Tesla be Coming to Texas?

Ever since Tesla chose Nevada over Texas for its $5 billion electric vehicle factory in 2014 with the help of economic incentives, Lone Star State leaders have seemingly wanted another shot at the Palo Alto, California-based car maker’s business. Now, they may get their chance.

“Musk’s Tweet mentioning Nevada and Texas could be a way to pit the states against each other and see what they might offer in terms of a business destination,” said Susan Arledge, President of Site Selection Services for¬†brokerage firm esrp.

“They really are the last automobile manufacturer left in California and this could be the ploy to justify the relocation they’ve been looking at for a while now,” Arledge said in an interview. “A line has been drawn in the sand and it depends on how Fremont and Alameda County handle this. If Tesla can’t reopen, the relocation of their facility makes for a simple solution.”

Tesla owns quite a bit of land in Nevada, which could accommodate additional operations, but the talent pool isn’t as deep in Nevada compared with larger Texas cities, Arledge said. The Lone Star State also has a plethora of land within a quick drive of major cities, including commercially owned ranches once used as plants, she said. In recent years, some large swaths of Texas ranch land earmarked for commercial use has been marketed to would-be buyers by companies such as Dallas-based Luminant and New York metals manufacturer Alcoa Inc.

The upcoming production of the Tesla Cybertruck next year could also give Texas an edge with Musk, with the state having the biggest share of truck sales throughout the United States. In all, Texas accounts for 18.4% of truck sales in the country, with more than 3.1 million trucks sold in Texas in 2019, according to recent data from Edmunds, which tracks vehicle sales in the United States.