Elon Musk Teases New Gigafactory in Texas With Twitter Poll

(Bloomberg) -- With two words and a question mark, Elon Musk dropped a hint Tesla Inc. may build another U.S. factory, days after President Donald Trump suggested the chief executive officer owed the country another manufacturing plant.

Musk posted “Giga Texas?” and started a Twitter poll late Tuesday, using shorthand for gigafactory, a term he coined years ago to describe a big plant. As of 2 p.m. New York time Wednesday, 80% of roughly 260,000 respondents voted “Hell yeah.” The remainder clicked “Nope.”

The euphoria that preceded Musk’s post -- Tesla closed Tuesday at $887.06, up 112% from where it started the year -- has given way to record sell-off. The stock plummeted as much as 21% Wednesday, its biggest intraday decline. The downward move followed several Wall Street analysts issuing cautious reports on the shares.

Trump weighed in on the hype around Tesla last month, calling the South Africa-born CEO “one of our great geniuses” and comparing him with Thomas Edison and the inventor of the wheel. Musk, 48, became a U.S. citizen in 2002, the year before Tesla was founded.

“He’s going to be building a very big plant in the United States,” Trump told CNBC in the Jan. 22 interview from Davos, Switzerland. “He has to, because we help him, so he has to help us.”

Tesla just completed construction of its newest plant in China and started delivering locally assembled Model 3 sedans to consumers in January. It’s also planning a factory near Berlin and targeting 2021 for the start of production.

In 2014, Tesla announced plans to build a massive battery manufacturing plant, setting off fierce competition for what was then one of the country’s biggest economic-development prizes. The company narrowed the finalists to five states -- Arizona, California, Nevada, New Mexico and Texas -- and Nevada prevailed.

The Texas Enterprise Fund, created by the state’s legislature under former Governor Rick Perry, has become one of the largest payers of economic-development incentives in the nation. Texas offered $2.3 million to entice SpaceX, the rocket company Musk founded and runs, to locate a launch facility in Brownsville, on the Gulf Coast near the Mexican border. Tesla’s chip team is based both in Palo Alto, California, where Tesla is headquartered, and in Austin.

The press office for Texas Governor Greg Abbott hasn’t responded to inquiries following Trump’s comments and Musk’s tweet.

Tesla’s sole auto-assembly plant in the U.S. is in Fremont, California, where the company makes the Model S, X and 3 and is about to start producing the Model Y. Musk unveiled another upcoming model, the Cybertruck, in November, and hasn’t yet said where it will be built.

Texas is the top state for pickup sales in the country and home to General Motors Co. and Toyota Motor Corp. truck factories.

Musk must seek pre-approval from a Tesla lawyer for sending certain tweets about the company as part of an amended settlement with the Securities and Exchange Commission related to his August 2018 gambit to take Tesla private. The agency accused him of running afoul of the accord a year ago, leading to a revised deal that made clearer what he can and can’t post without running the information by an attorney.

©2020 Bloomberg L.P.

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