Now California Might Get Tesla's Gigafactory After All

Tesla has been stringing California along when it comes the company's intentions for its $5 billion gigafactory.

Back in May, CEO Elon Musk said it was "improbable" that the massive lithium ion battery facility would be built in the Golden State, but he didn't rule it out. Now there's speculation California may seriously be back in the running.

There's just one potential sticking point: according to local news outlet KTVU, California could be offering real estate at a Superfund site that's not completely cleaned up. It's the former Concord Naval Weapons Station, a sprawling, 12,800-acre site, about 30 miles east of San Francisco.

Possible Gigafactory locations in Arizona, Nevada, New Mexico and-most humiliatingly for California, home to Tesla's Palo Alto headquarters-Texas have all reportedly been discussed. Tesla has also indicated that its timetable for constructing a factory is brisk. The company wants to have the annual capacity to produce enough lithium-ion battery packs to power 500,000 vehicles by 2020 (only about 50,000 cars now roll off the assembly line).

The Concord Naval Weapons Station is where the U.S. Navy stored bombs, torpedoes, and missiles for decades, beginning during World War II (a devastating explosion at Port Chicago, part of the complex, killed over 300 sailors and civilians in 1944). There's more than enough land available for Tesla to realize its gigafactory ambitions, but the Superfund site cleanup of various highly toxic contaminants is still ongoing (heavy metals are the environmentally destructive military-industrial gift that keeps on giving).

That process could be too slow for the electric-car startup. Musk wants to increase production of the Model S sedan over the next year and gear up to manufacture two new vehicles through 2017: the family-oriented Model X SUV and the smaller Model 3 sedan.

However, Tesla's on-again, off-again gigafactory flirtations with its home state have exasperated some outspoken critics of the way that California does business. Venture capitalist Tim Draper has made Tesla's rebuff of California a talking point for his controversial "Six Californias" initiative. Losing Tesla strikes him as a smack-your-forehead example of the state's dysfunctional business and political culture.

No one in California government, at either the state or local level, is happy that a futuristic, media-darling company like Tesla has signaled that it wants to create over 6,000 jobs someplace else, either. California has all but branded itself as the natural entrepreneurial engine of the new transportation economy. And although Tesla remains committed to its plant in Fremont, its audition of other western states and their more enticing tax arrangements proves that while Musk & Co. may be committed to the idea that California nurtures innovation, the reality of running a capital-intensive car company means that nothing is ever set in stone.

Tesla didn't immediately respond to Business Insider's requests for comment, but the company did tell KTVU that it hasn't made a final call on the gigafactory location.