Five US states queue up to bag Tesla's “gigafactory”

Five US states - Texas, Nevada, New Mexico and Arizona - have lined up incentives in a bid bag Tesla Motors' massive $5- billion "gigafactory" to make batteries for a new generation of electric cars, The Associated Press reported.

The winning state would be expected to offer Tesla publicly financed incentives exceeding a half-billion dollars to host the plant that is expected to generate 6,500 well paying jobs.

Earlier, the company invited economic development officials from seven western states in the US and presented its vision for a ''gigafactory,'' the giga referring to the large amount of power that batteries produced at the plant would store.

Taking a further step down his rather unusual path, CEO Elon Musk, earlier this year, announced Tesla would spend millions to prepare sites in two or three states before the finalist site chosen. Then, over the summer, Musk said the winning state would have to pitch in about 10 per cent of the cost, which effectively signalled the minimum bid at $500 million.

Investors see huge potential in Tesla's stock as they believe the company has a big future, and reviewers have praised Tesla's Model S, the current model that boasts a price tag of $70,000-plus.

However, Tesla had been guarded about even saying how many cars it had sold. According to various estimates the company has produces 50,000 Model S vehicles so far. By contrast Toyota and General Motors each sold nearly 10 million vehicles in 2013.

According to Greg LeRoy, executive director and founder of the Washinton, DC-based watchdog called Good Jobs First, Tesla had bold aspirations and a magnetic CEO, but it had got microscopic market share, and a business model that was yet to prove itself.