Now that the media frenzy over Tesla’s recent announcement to locate their Battery “Gigafactory” in Nevada is subsiding, we thought it was time to weigh in. As home to Tesla’s vehicle production operation, many have asked what we think of the decision. The truth is that while everyone else was busy speculating about the Gigafactory’s ultimate home, we have been busy supporting their existing manufacturing business, which remains firmly planted in Fremont and continues to expand.

Of all the articles that theorize about the reasons why Tesla chose Nevada, we think Silicon Valley Business Journal reporter, Lauren Hepler, got it right in her piece, “4 Reasons Tesla’s Gigafactory Went to Nevada Instead of California.” Below are the four reasons she cites along with our own observations.

  • Recent History: When reports surfaced earlier this summer that Tesla had begun construction on a facility in Nevada, it was a pretty big hint to us where the Gigafactory was likely headed.
  • Strategic Geography: Of all the “out-of-state” options Tesla was considering, we think this works most in our favor, given the short drive time and transit connections between Reno and the Bay Area. In fact, Reno has easier access to Fremont than many California locations that may have been contenders for the Gigafactory.
  • CEQA Red Tape: Yes, this was probably an important factor in the decision. We agree with others who have expressed hope that this serves as California’s wake-up call to finally act on CEQA reform.
  • Taxes: What taxes? As Hepler’s article states, Nevada is known for its extraordinarily low taxes. From my position as mayor, I can tell you that cities are often in the position of responding to business prospects about how we can match tax incentives offered elsewhere. California has made great strides in this area with California Competes and other Go-Biz programs, but at the end of the day we offer a different value proposition.

And as a bonus, we would actually add a fifth item to the list:

  • Lithium Mine: Many don’t realize that Nevada is home to the country’s only lithium mine—the crucial ingredient in their lithium-ion battery recipe. Considering that Tesla is expected to use about one fifth of the world’s lithium supply, it seems highly likely this was an important determinant and something no other state could offer.

For those who see this as a loss, we’d like to offer a slightly different view. We see this decision (and Tesla’s ability to ramp up battery production quickly) as a very good prospect for supporting their thriving, growing California manufacturing ecosystem, which has yielded thousands of good jobs and put us on the map for revolutionizing the EV industry. We would argue that Tesla’s contribution to and impact on California will be profound for years to come—something we should applaud them for.