Tesla plant construction slowdown a concern for contractors, but not for state

About 30 Nevada contractors met with Gov. Brian Sandoval in mid-February wanting to know what’s going on with Tesla Motors’ $5 billion Gigafactory, where they said their construction work had come to a halt.

The slowdown at the site of the planned 10 million-square-foot battery factory in Northern Nevada began in early February, said the group, which includes members of the Associated General Contractors of Las Vegas.

“Although work started, at this point it’s been halted,” said Sean Stewart, executive vice president of the organization. “There’s an uncertainty about why the work has halted. Several of our contractors are still off.”

But a Tesla spokesman said the job is ongoing, and going well.

“The project is currently progressing ahead of schedule,” said the spokesman, who asked that his name not be used. “We work with a number of partners in our construction efforts at the Gigafactory and, because we are building in phases, we are constantly modulating resources based on the scope of work at that time.”

The project’s progress is of high interest in light of Nevada’s award of $1.3 billion in tax breaks, credits and other incentives to land the battery plant, a joint effort by the electric car company and Japanese consumer electronic giant Panasonic.

The secretive nature of the Tesla project has made it difficult to determine whether the factory is being built on schedule.

A statement Friday from Sandoval said he is satisfied with Tesla, but shed no light on whether there were any building delays.

“I am incredibly pleased by Tesla’s investment and selection of Nevada as home to its Gigafactory,” Sandoval’s statement said. “The Gigafactory is an unprecedented project and when completed will be unlike any other facility in the world. TESLA has demonstrated a firm commitment to Nevada as home to this exciting project. They continue to meet the expectations of hiring Nevadans and transforming Nevada’s manufacturing and industrial base.”

Officials in Storey County, where the factory is based, said work on the project sometimes slows between construction phases, but as far as they can tell the work continues.

“It’s obviously a massive project that will have its ebbs and flows,” Storey County Manager Pat Whitten said.

“There have been periods of concentrated construction and then periods where they program extra time to make sure the project is completed. The timeline and deadline (are things) we’re very focused on.”

Whitten said he believes the project is getting ready to “start back up with the steel work,” for example.

The contractors signed nondisclosure agreements with Tesla, barring them from discussing the project. But one of the Nevada contractors who complained about a work stoppage owns a crane rental company.

Many of the state incentives are contingent on Tesla meeting investment deadlines and employment goals, according to the deal Sandoval struck, which was approved by the Nevada Legislature during a special session in September.

For example, if Tesla fails to invest at least $3.5 billion in the project, the state could “claw back” the giveaways. The company also committed to hiring Nevadans for at least 50 percent of the expected 6,500 Gigafactory jobs.

Nevada Sen. Patricia Farley, R-Las Vegas, a construction company owner, said lawmakers are intent on ensuring all promises are kept and the project pays off for the state.

“It’s a priority to ensure Nevadans are working on the Tesla site,” Farley said Friday. “It’s key to the comeback of our industry and Nevada families. “

Tesla has teamed with Panasonic, which will produce the lithium-ion batteries for its electric cars.

The factory is scheduled to be completed in 2017, and is expected to help Tesla reduce the cost of its high-end cars, making them more mass-market sellers.

Concern about the Gigafactory’s progress surfaced last week when the Reno Gazette-Journal reported that construction was delayed, citing union job boards that said there had been a change in demand for what the company calls “Project Tiger.”

Sources attributed the delay to a change in factory designs, although Elon Musk, the CEO and chief product architect of Tesla Motors, took to Twitter to deny the story.

“There is no slowdown of the Gigafactory construction underway, as anyone near Reno with eyes can verify. It’s not subtle,” Musk tweeted, following up with photos of construction managers on site.

Lance Gilman, director of the Tahoe-Reno Industrial Center where the Tesla factory is being built, told the Review-Journal everything is fine with the project.

“Too much rumor and not enough facts,” Gilman said in an email. “Things are great in Tesla World. … as the saying goes …

“ ‘All will be known in due time.’ Patience.”

Contact Laura Myers at lmyers@reviewjournal.com or 702-387-2919. Find her on Twitter: @lmyerslvrj.