All eyes on Tesla's Gigafactory

|About: Tesla Motors (TSLA)|By:, SA News Editor

An audacious plan by Tesla Motors (TSLA) to build the world's largest lithium-ion battery factory continues to be the focus of the electric vehicle industry as the success of the Gigafactory could stand as the make-or-break point for the technology.

The company has narrowed the potential sites for the Gigafactory to Arizona, Texas, Nevada, and New Mexico with each state likely to throw in some incentives.

Despite the potential boost from state governments, the EV automaker still needs a large partner or two to share the costs of the massive project with it. Panasonic is the logical choice, but the company hasn't fully committed to investing in the Gigafactory.

What to watch: At the core of the strategy behind the ambitious Gigafactory project is a goal of slashing the cost of the lithium cell batteries for Tesla vehicles. Industry experts think the cost on Tesla's base 60 kWh battery could be brought down to $10K from $16K as production ramps up significantly. The wildcard in the mix is the potential of the Gigafactory to lead to disruptive energy storage innovation. Analysts are deeply divided on the issue.