The batteries will not be built in California.
Tesla Motors will look to other states, possibly in the Southwest, for the location of its $5 billion- and 6,500-worker battery factory, according to the Los Angeles Times.
The factory will require as much as 1,000 acres. A suitable site is not in California, but Tesla and the office of Gov. Jerry Brown both declined to say why the Golden State didn't fit the bill.
Tesla builds cars at the former Toyota plant in Fremont, after spurning city officials from Downey, who wanted the factory in their city at a former space shuttle construction facility.
Arizona, Nevada, New Mexico and Texas are all candidates for the battery plant, the newspaper reported.
