Tesla plans to flood U.S. with 500,000 electric cars using solar-powered 'gigafactory'

Tesla plans to build a $5 billion “gigafactory” to produce more lithium-ion batteries by 2020 than were made worldwide last year – which should be enough, the company said, to power 500,000 electric vehicles annually.

The automaker hasn’t chosen a site for the factory, expected to occupy by about 10 million square feet and eventually employ 6,500 workers, but is has narrowed down its options to four states.

Arizona, Nevada, New Mexico, and Texas are all vying to be selected as the site for the facility, which will be largely powered by renewable energy sources such as solar and wind.

Texas is among a handful of states where Tesla is prohibited from selling its cars directly to customers through its own dealerships, although customers in Texas may buy vehicles through the company’s website.

When Ohio lawmakers proposed a ban on Tesla dealership, the company made clear that it would not locate future manufacturing facilities in states that interfered with its business operations.

CEO Elon Musk said it would not build a possible truck manufacturing plant in Ohio or Texas unless lawmakers eased franchise restrictions.

Tesla plans to raise up to $1.6 billion in convertible-debt financing and anticipates investing up to $2 billion toward the more than $4 billion the gigafactory will likely require within six years.

Panasonic, which currently produces the automaker’s batteries, will reportedly invest $1 billion annually, although it’s not known whether additional investors would be required to fund the plant.

The automaker expects to sell 35,000 all-electric Model S sedans this year and is readying production of its Model X SUV that will go on sale early next year.

It plans to begin selling a more affordable “Gen III” sedan by 2017 for about $35,000, or roughly half the cost of the cheapest Model S, but the company says cutting the cost of battery packs is necessary to make its cars more affordable.