Feb 27, 2014 8:12amMorning Money Memo:Tesla Motors has notably ambitious plans for growth as it buil...

1. Tesla Plans ‘Gigafactory’ for Mass-Market
Autos
Feb 27, 2014 8:12am
Morning Money Memo:
Tesla Motors has notably ambitious plans for growth as it builds on the sizzling success of the luxury
Model S electric car and moves into the mass market for zero-emission vehicles. The cutting-edge
automaker says it's considering sites in Nevada, Arizona, New Mexico and Texas for a battery
factory that would employ about 6,500 people.
Tesla expects to start construction this year and complete its "gigafactory" in 2017. The proposed
plant would cost up to $5 billion.
Tesla says it will invest $2 billion in the 10-million-square-foot factory. Its partners will invest the
rest. The company didn't identify those partners Wednesday, but its battery supplier, Japan's
Panasonic, is expected to be among the investors. The new factory will provide enough batteries to
supply 500,000 vehicles by 2020.
RELATED: Consumer Reports Names Tesla Model S Its Top Pick
Tesla sells just one model, the Model S sedan, which starts around $70,000. But it plans to begin
making a crossover, the Model X, later this year, and wants to bring a lower-cost, mass-market
vehicle to market in 2017. Tesla said the factory would help lower its battery costs by about 30
percent.
The firm also announced that it plans to http://www.myseotool.com/ raise $1.6 billion in a debt

2. offering. The proceeds would help finance the new factory and the lower-cost vehicle.
After a prolonged rally, Tesla stock is now trading close to $260. One year ago its per-share price
was just $35.
The U.S. government's auto safety watchdog says it will investigate whether General Motors acted
quickly enough to recall 1.6 million older-model small cars. If wrongdoing is found, GM could be hit
by a multimillion-dollar fine.
Under federal rules, automakers are required to notify the National Highway Traffic Safety
Administration within five business days after knowing it has a safety defect in its vehicles. This
week GM doubled the number of cars in the recall for faulty ignition switches. The problem has been
linked to crashes that caused 13 deaths.
There are fresh signs this morning that the U.S. home-building market could be picking up. Better-than-
expected construction numbers helped lift U.S. stocks slightly Wednesday. Bank lending for
land development and construction is reported to be increasing. That's a sign the supply crunch for
new homes could ease in coming months, according to The Wall Street Journal.
Investors might be disappointed by Baidu's quarterly earnings report. The owner of China's most
popular search engine says profits fell 0.4 percent, compared to the year before. But consider this:
Sales soared more http://en.wikipedia.org/wiki/Search_engine_optimization than 50 percent. The
surge in revenues shows impressive growth in the world's biggest Internet market as hundreds of
millions of consumers shift to smartphones and other wireless devices.
Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesnow 212-45-
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