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Published on February 2nd, 2016 | by Kyle Field

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Gigafactory Ahead Of Schedule, Behind On Job Creation? Spoiler: Nope!

February 2nd, 2016 by  


Originally published on EV Obsession.

Construction of the Tesla Gigafactory is proceeding at a rapid pace and is, in fact, still ahead of schedule when it comes to being on track to actually produce batteries. This may come as a surprise to many, as one of the consistent themes with Tesla is a tendency to let dates slip. Having said that, the fact that the critical Gigafactory gear in the behemoth that is Tesla Motors and Tesla Energy is ahead of schedule is great news on all fronts.

With Tesla and Panasonic dumping literally billions of dollars into the local economy, jobs are being created — many of which can be found on our Clean Tech Jobs Listings — but many news outlets are up at arms and calling Tesla out for not creating jobs. This wouldn’t normally be worth talking about but for the fact that job creation is the key metric for the state of Nevada, which provided a sizable incentive package for Tesla to land the Gigafactory in The Silver State. Pulling back the layers of the onion and it’s obvious that something stinks… and it’s not Tesla.

To understand the story, let’s take a quick flashback to October (don’t worry, I’ll be quick) for context. On October 9th, two journalists from the Reno Gazette Journal were caught trespassing on the Gigafactory construction site. All signs indicated that the pair was attempting to get the inside scoop on what was going down at the Gigafactory, but it didn’t work out so favorably and they ended up getting some face time with the local sheriff instead after allegedly assaulting a few Tesla employees.

As I started to cut into the Gigafactory job creation stories to peel back the layers, I found that they all have a common (weak) link: they all cite a single article by the Reno Gazette-Journal. I’m not alleging that everything coming from the RGJ is faulty by association to the incident in October, but a dive into the data behind the recent RGJ article reveals that, in this case, the article isn’t much more than a cheap pot shot at Tesla, supported by flawed data and weightless assertions.

The cheap shots at Tesla are all over the article, starting with the intro paragraph:

“The Tesla-Panasonic battery gigafactory is falling far short of the economic impact projections on jobs and capital investment used to persuade lawmakers to approve a record-breaking tax incentive package for the project, according to an analysis by the Reno Gazette-Journal.”

The intro above claims that Tesla and Panasonic have missed the target. They are not fulfilling their end of the bargain and are not creating the jobs they said they would. It paints a case of a sly business trying to get over on a state that put together a “record-breaking tax incentive package.” Just another story of a corporation trying to get over… but that’s just not the case.

Throughout the article, comparisons are made between current jobs and job creation forecasted by state-hired economists. These are not commitments made by Tesla, nor are the job numbers cited anything that Tesla agreed to. Rather, the numbers cited as supporting the bold headline, “Tesla gigafactory ahead of schedule, but off-track on job, investment projections,” are from a state-funded report. Get that? Not from Tesla, not even what Tesla said they would do back in 2014… but from an independent economist hired by the state!

A specific example from the article references the state-hired economists’ projections for job creation (700 jobs) compared to jobs created in September (months ahead of the timeline it was compared to) and finally to an unofficial count from the end of the year. This comparison is followed up by an official-looking graph that again uses the September data vs the year-end projections from the economists:

“In 2014, state-hired economists projected Tesla would have created 700 permanent jobs by the end of 2015. By Sept. 30, the most recent numbers available, the gigafactory employed 82. An unofficial count of permanent jobs as of Dec. 31 is more than 200.”

The article repeatedly infers that Tesla is missing the mark and letting the state down and it is abundantly clear that the Reno Gazette-Journal is ultimately just running a smear campaign that is only skin deep, slinging mud on the new guy in town to drive traffic to the RGJ site. What’s ironic about the article is that it starts off with such a bold headline, knowing that most people won’t get past the headline… and that most people will only read the headline and immediately internalize it as truth.

For the 20% of readers (this statistic comes from an “anonymous expert making bold assumptions” — aka, was pulled from thin air) that do make it past the headline into the article, the first few paragraphs are similarly misleading. However, for the 3% that research the initial articles, get through to the RGJ site, get past the headline, and read more than just the first few paragraphs… the article actually undermines itself.

As noted above, the article comes clean… but the damage is already done:

“But while the gigafactory isn’t meeting original projections, it is on track to meet the legal requirements of the tax incentive package, is actively hiring permanent employees and has already started producing powerwalls for home energy storage. Tesla company officials say they changed their construction schedule to open the building earlier than originally anticipated.”

This makes it clear (finally) that Tesla is on track to meet the legal requirements of the tax incentive package and is otherwise kicking tail across the board at the Gigafactory. We are not short of Tesla love here at EV Obsession and CleanTechnica, and I myself just bought some Tesla stock last week, but this is not just another case of Tesla love run rampant but an obvious case of the Reno Gazette-Journal slinging mud at the new guy in town that is actually trying to hire a TON of people in Nevada at this very moment (seriously), which you can look into on our new Clean Tech Jobs search tool
 
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About the Author

I'm a tech geek passionately in search of actionable ways to reduce the negative impact my life has on the planet, save money and reduce stress. Live intentionally, make conscious decisions, love more, act responsibly, play. The more you know, the less you need. As an activist investor, Kyle owns long term holdings in BYD, SolarEdge, and Tesla.



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