Energy
Tesla’s Gigafactory continues to reshape Reno: Transforming education, housing and the small business sector
Reno, a city just four hours away from Silicon Valley, has been home of Tesla’s Gigafactory – a city whose economy once chiefly relied on the low-wage casino industry, where bankruptcy and crime were frequent and unpredictable. Hit hard with the housing crash and recession, Reno fell into hard times in 2010 with a 14 percent unemployment rate. Once home to mostly thrifters and passersby, Reno’s outlook started to change with talks of Tesla’s plans for technological revitalization. Startups and incubators have been popping up to attract more millennials, new murals are being painted onto derelict walls, all are response to the hope that Tesla will be able to inject into the local economy sustainable, higher-paying jobs.
Tesla announced three years ago, in 2014, that construction would begin for its new Gigafactory in Reno, Nevada. As of now, battery cell production is well underway, and the factory has become the main production facility for Model 3 battery packs and drive units.
The introduction of Tesla into the region has not only infused Reno’s economy with jobs that have shifted it out of its economic drought, but also incentivized enrollment in neighboring schools, especially in STEM-related subjects. Nearby professors at the University of Nevada commented to eenews that the Tech Sector may be the area with the most secure employment base. The construction of the factory has provided over 4000 local jobs for the Reno economy, and will support close to 10,000 jobs when complete, up from a previous estimate of 6,500 jobs.
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- Are we seeing a pathway leading from the main Gigafactory 1 facility leads to a new “parking lot”? [Photo: Teslarati]
Tesla Gigafactory flyover July 2017 captures parking lot expansion
This will in turn increase the retention rate at schools, both secondary and professional/university, creating a positive feedback cycle within the job sector and the education sector, thus securing the longevity of both. In fact, in 2013, a large part of the economic recovery was due to STEM jobs, driving unemployment down to 6.4 percent, reported the Atlantic. Additionally, STEM jobs pay from 28 to 68 more than non-STEM jobs.
The presence of Tesla is complemented by other tech companies such as Apple and Amazon, with more expected to come. It’s very likely that the landscape of Reno in the years to come will be vastly different than it was before the introduction of Tesla, and many experts and officials dub this the “Tesla Effect”.
Hillary Schieve, the Mayor of Reno, defined the “Tesla Effect” as “a positive shift toward changing Reno’s national perception for the better….Reno’s emerging neighborhoods, such as Midtown, downtown, and the Fourth Street corridor…due in large part to [the] booming technology industry with billions of dollars being invested from some of Fortune’s highest-ranked companies, which includes Tesla, Switch, Amazon and Microsoft.”
Tesla recruiting from the University of Nevada, Reno in 2015
The growth from the “Tesla Effect” extends beyond just the technology sector. Applied Economics presented a study in 2014 to Nevada Governor’s Office of Economic Development stating that “Tesla would be an important contributor to the region’s economy and could serve as a catalyst for additional manufacturing and logistics development in the region with its worldwide name recognition and cutting-edge technology. In addition, all of the jobs created by the company would be net new jobs thereby growing the economy both locally and regionally. The attraction of this company to Washoe County and Storey County would not only create a large number of new direct jobs, but also support a sizeable amount of additional economic activity, jobs and payroll at related local supplier and consumer businesses.” The study further broke down the revenues streams into different sections and explained where each calculated value was estimated from. You can see the full report here.
The presence of Tesla has pushed for market diversification within Reno. The building of the factory continues to draw in slews of local businesses to supplement the needs of both the factory and the people. Demands for food, supplies, gas and food will increase, bringing in more employment and more cash flow.
Drawing new businesses also could have the potential to diversify and infuse culture into the local neighborhood, highlighting flairs and quirks that will make it competitively attractive culturally to job seekers against neighborhoods such as the rich-cultured Austin.
Siena Hotel Spa & Casino in Reno, NV outside of nearby Tesla Gigafactory in Sparks. Source: Siena Hotel & Casino
With neighborhood changes, come real estate changes. The median rent prices along with the amount of rentals saw a sharp spike followed by a steady increase beginning around February 2017, according to trulia.com. But while the tech boom creates a great demand for apartments and housing, the boom does not seem like it would expand into areas stricken by poverty and food deserts so far. According to the Atlantic, the boom has not yet worked to create enough affordable housing, possibly stratifying the inequality levels in correlation to distance from the tech center. The consequence could be creating a real-estate scenario similar to that of San Francisco’s. However, better local government regulations and sanctions could possibly ameliorate the problem, since the factory has not officially opened all of its doors yet to potential job-seekers.
With the influx of jobs and traffic, infrastructure and transportation will be greatly impacted. According to the Reno Gazette Journal, “USA Parkway’s still-unbuilt 16 miles to U.S. Highway 50 in Silver Springs will be “fast-tracked” to completion in as soon as two years, they said, opening up access to Lyon County and the Dayton Valley and to Carson City beyond”. Increasing the connectivity of the community may better bridge the divides between individual counties and neighborhoods, and between Reno and the outside world, facilitating more efficient transfers of material, information and persons.
With shifting concerns and economies, cities are made to be more adaptable to the different cultural, demographic and social climates. Jobs markets created by fossil fuels will meet diminishing futures in face of environmental and climate concerns. The redirection towards clean energy leaves white space for the development and creation of jobs in the clean energy technologies. Creating a technological oasis centered around sustainability in complement with the current economy will secure both long term and short term profits. It will insure a steady revenue stream for the state and poise itself for the transition into a green future.
Energy
Tesla Energy celebrates one decade of sustainability
Tesla Energy has gone far since its early days, and it is now becoming a progressively bigger part of the company.
Tesla Energy recently celebrated its 10th anniversary with a dedicated video showcasing several of its milestones over the past decade.
Tesla Energy has gone far since its early days, and it is now becoming a progressively bigger part of the company.
Tesla Energy Early Days
When Elon Musk launched Tesla Energy in 2015, he noted that the business is a fundamental transformation of how the world works. To start, Tesla Energy offered the Powerwall, a 7 kWh/10 kWh home battery system, and the Powerpack, a grid-capable 100 kWh battery block that is designed for scalability. A few days after the products’ launch, Musk noted that Tesla had received 38,000 reservations for the Powerwall and 2,500 reservations for the Powerpack.
Tesla Energy’s beginnings would herald its quiet growth, with the company later announcing products like the Solar Roof tile, which is yet to be ramped, and the successor to the Powerwall, the 13.5 kWh Powerwall 2. In recent years, Tesla Energy also launched its Powerwall 3 home battery and the massive Megapack, a 3.9 MWh monster of a battery unit that has become the backbone for energy storage systems across the globe.
Key Milestones
As noted by Tesla Energy in its recent video, it has now established facilities that allow the company to manufacture 20,000 units of the Megapack every year, which should help grow the 23 GWh worth of Megapacks that have already been deployed globally.
The Powerwall remains a desirable home battery as well, with more than 850,000 units installed worldwide. These translate to 12 GWh of residential entry storage delivered to date. Just like the Megapack, Tesla is also ramping its production of the Powerwall, allowing the division to grow even more.
Tesla Energy’s Role
While Tesla Energy does not catch as much headlines as the company’s electric vehicle businesses, its contributions to the company’s bottom line have been growing. In the first quarter of 2025 alone, Tesla Energy deployed 10.4 GWh of energy storage products. Powerwall deployments also crossed 1 GWh in one quarter for the first time. As per Tesla in its Q1 2025 Update Letter, the gross margin for the Energy division has improved sequentially as well.
Tesla Energy shined in what was a weak delivery report for the first quarter, as the company’s frequently-forgotten battery storage products performed extraordinarily well.
Tesla reported its Q1 production, delivery, and deployment figures for the first quarter of the year, and while many were less-than-excited about the automotive side, the Energy division performed well with 10.4 GWh of energy storage products deployed during the first quarter.
This was a 156 percent increase year-over-year and the company’s second-best quarter in terms of energy deployments to date. Only Q4 2024 was better, as 11 GWh was recorded.
Tesla Energy is frequently forgotten and not talked about enough. The company has continued to deploy massive energy storage projects across the globe, and as it recorded 31.5 GWh of deployments last year, 2025 is already looking as if it will be a record-setting year if it continues at this pace.
Tesla Megapacks to back one of Europe’s largest energy storage sites
Although Energy performed well, many investors are privy to that of the automotive division’s performance, which is where some concern lies. Tesla had a weak quarter for deliveries, missing Wall Street estimates by a considerable margin.
There are two very likely reasons as to why this happened: the first is Tesla’s switchover to the new Model Y at its production facilities across the globe. Tesla said it lost “several weeks” of production due to the updating of manufacturing lines as it rolled out a new version of its all-electric crossover.
Secondly, Tesla could be facing some pressure from pushback against the brand, which is what many analysts will say. Despite the publicity of attacks on Tesla drivers and their vehicles, as well as the company’s showrooms, it would be safe to assume that we will have a better picture painted of what the issue is in Q2 after the company reports numbers in July.
If Tesla is still struggling with lackluster delivery figures in Q2 after the Model Y is ramped and deliveries are more predictable and consistent, we could see where the argument for brand damage is legitimate. However, we are more prone to believe the Model Y, which accounts for most of Tesla’s sales, and its production ramp is likely the cause for what happened in Q1.
In what was a relatively bleak quarter, Tesla Energy still shines as the bright spot for the quarter.
Tesla has chosen the location of its latest manufacturing project, a facility that will churn out the Megapack, a large-scale energy storage system for solar energy projects. It has chosen Waller County, Texas, as the location of the new plant, according to a Commissioners Court meeting that occurred on Wednesday, March 5.
Around midday, members of the Waller County Commissioners Court approved a tax abatement agreement that will bring Tesla to its area, along with an estimated 1,500 jobs. The plant will be located at the Empire West Industrial Park in the Brookshire part of town.
Brookshire also plans to consider a tax abatement for Tesla at its meeting next Thursday.
The project will see a one million square-foot building make way for Tesla to build Megapack battery storage units, according to Covering Katy News, which first reported on the company’s intention to build a plant for its energy product.
CEO Elon Musk confirmed on the company’s Q4 2024 Earnings Call in late January that it had officially started building its third Megapack plant, but did not disclose any location:
“So, we have our second factory, which is in Shanghai, that’s starting operation, and we’re building a third factory. So, we’re trying to ramp output of the stationary battery storage as quickly as possible.”
Tesla plans third Megafactory after breaking energy records in 2024
The Megapack has been a high-demand item as more energy storage projects have started developing. Across the globe, regions are looking for ways to avert the loss of power in the event of a natural disaster or simple power outage.
This is where Megapack comes in, as it stores energy and keeps the lights on when the main grid is unable to provide electricity.
Vince Yokom of the Waller County Economic Development Partnership, commented on Tesla’s planned Megapack facility:
“I want to thank Tesla for investing in Waller County and Brookshire. This will be a state-of-the-art manufacturing facility for their Megapack product. It is a powerful battery unit that provides energy storage and support to help stabilize the grid and prevent outages.”
Tesla has had a lease on the building where it will manufacture the Megapacks since October 2021. However, it was occupied by a third-party logistics company that handled the company’s car parts.
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