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Tesla said to choose Reno site for $5B Gigafactory

The electric-car maker has chosen a Nevada industrial park as the location for its massive, lithium-ion battery-producing plant.

Tesla's gigafactory is expected to help lower production costs on cars such as the forthcoming Model S. Tesla

Tesla Motors has chosen an industrial park near Reno, Nev., to be the location of its massive, lithium-ion battery-producing plant dubbed the "gigafactory," The Associated Press reported Wednesday.

The electric-car maker revealed during its July investor report that it had broken ground in June at a site in Reno, Nev., as a prospective candidate. The AP's source said work will soon resume at the site, but Nevada lawmakers must still approve a package of incentives negotiated by Tesla.

Nevada Gov. Brian Sandoval has scheduled a press conference for Thursday for a "major economic development announcement." Without confirming the AP's report, a Tesla spokeswoman told CNET that the company would be on hand for the announcement.

Nevada was one of many sites, alongside Arizona, California, New Mexico and Texas, that Tesla was scouting for construction in collaboration with Panasonic, its first public partner in the estimated $5 billion project.

The opening of Tesla's gigafactory is slated to coincide with the unveiling of its upcoming cheaper third-generation electric car, the Model 3, in 2017. Being able to produce its own batteries would help the company efficiently manufacture its cars while also being cost effective. The Model 3 is expected to cost around $35,000, which is far cheaper than the $70,000 Model S.

Tesla's stock closed down $2.93 at $281.19, a decline of about 1 percent.