It’s official. Tesla’s gigantic battery factory just outside of Reno is now up and running, as of Wednesday. And it’s only the beginning for this ground-breaking tech-company and for the biggest little city, Reno.
Tesla’s new Gigafactory is already bringing in a huge number of employees to the area, and the factory is less than 30 percent complete . The company says there are 2,900 employees working there now, but Tesla says it expects to have 6,500 employees on the payroll this coming year.
And the jobs that Tesla will create in the area will go beyond those who work at the factory. Tesla says the Gigafactory will indirectly create between 20,000 and 30,000 additional jobs in that region.
When the building is all done, Tesla says it will be the biggest in the world. And it’s already huge with 4.9 million square feet of operational space.
Right now, the factory is producing lithium-ion batteries for Tesla’s Powerwall 2 home energy products. But the factory is also crucial for Tesla’s soon-to-be launched Model 3 – which it expected to begin production about halfway through this year.
Tesla has already seen massive demand for the Model 3, with an estimated 700,000 pre-orders. At just $35,000. it will be the most affordable model yet. The company hopes to build and sell 500,000 of the Model 3 sedans before the end of 2018.
And since all those cars need batteries, Tesla was concerned that current battery manufacturers in Japan, South Korea, and China, couldn’t keep up with Tesla sale. Thats why Tesla decided to build its own battery factory in Reno about two years ago.
In addition to keeping up with demand, Tesla hopes to bring the cost of the batteries down, and make the cars more affordable for more people.
This is all happening in an area where tech companies are congregating because of Nevada’s business-friendly environment. Fortune magazine writes about why Nevada has become a hub for energy-tech companies:
It says: “Nevada, known mostly for gambling, turns out to have a unique set of characteristics like a low cost of doing business, large incentives, an ability to move quickly, and ample clean energy resources that make it attractive to companies developing innovative energy technologies. It’s slowly become a hub for manufacturing for energy storage, clean energy and greener transportation that could one day be as important as Silicon Valley is to Internet and software startups.”
Fortune cites plans by Tesla-rival Faraday Future for a 3 million square-foot electric car factory outside Las Vegas. The company hopes to be producing cars at the factory by next year.
Hyperloop Technologies began testing an ultra-fast transit system in the Nevada desert about a year ago. The Hyperloop is a system of pods move through tubes on cushions of air.
Last July, a battery recycling start-up called Aqua Metals, opened a factory near Tesla Gigafactory. The company will break down lead-acid batteries, which are the kind you see in non-electric cars.
Reno is also attracting high-tech companies like Apple, which has a data center in Reno. You’ll also find an Amazon distribution center, and a Microsoft licensing unit in Reno, along with tech start-ups. Switch just built their billion dollar data center near Tesla. And there’s a street in Reno that’s nicknamed “Startup Row” because of app developers and cloud computing companies located there.
Now what does this all have to do with real estate investing?
Jobs growth drives population growth and people need housing. Right now, the employment rate is down to 5% – otherwise known as the chronically unemployed. Plus those folks are likely not trained in high tech.
That means engineers and programmers need to move to Reno, but housing hasn’t caught up with demand.
It’s estimated that 50,000 new high tech jobs will come to Reno over the next 4 years, and 35,000 homes will be needed. Builders are no where near keeping up with demand.
In the meantime, workers are being flown in from the Silicon Valley and staying at casinos. But they will want to move their families up as soon as housing is available.
And while there appears to be plenty of land in the area, much of it is unbuildable to too expensive to build due to the rugged terrain. That’s why land prices have soared as developers fight over remaining lots.
Prices are still cheap compared to California land values and the cost to build is much cheaper, but prices are rising every single month as business in this region grows. And that’s what you want to see if you’re an investor — you want to see all those numbers rising.
I’m so thrilled to say that our company, Real Wealth Network, has partnered with some very sophisticated developers who have been looking for land for the past 5 years. And just this year, we were able to tie up a highly desirable piece of land right off 80 at the Boomtown exit.
The former owners got into trouble because entitlement took longer than expected so they ran out of money, and had to take on a hard money loan. When the loan came due, they were desperate to sell. We acquired it fully entitled for the price they paid for raw land.
We’ll be finishing out the lots this Spring and plan to sell half the lots to builders, which will leave us with the remaining 92 lots free & clear.
This syndication just closed out in December. We raised $16million in a matter of months due to the desirability of this project. I couldn’t talk about it on this podcast due to SEC regulations, but now that it’s sold out, I can.
And we’ll keep you updated.
I will say, we have some very very exciting projects coming soon in Reno. So if you’d like to know about them before they sell out, just join.
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