In the effort to build the largest lithium ion factory in the world, Tesla Motors Inc (NASDAQ:TSLA) has been searching for ways around the numerous environmental laws that stand in the way of the completion of Tesla’s Gigafactory. Now, it seems that Tesla has finally found a method to do so.

California governor Jerry Brown recently suggested the possibility of bending the state’s environmental laws. The competition among states is intense for the electric vehicle manufacturer to choose the location for the $5 billion lithium ion battery plant.  The stock has rose from $255.23  last week to $262.29 this week as a result of optimism in the deal.

So far, California seems to be the most expensive state for Tesla to build its giant battery manufacturing plant, mainly due to the state’s environmental regulations, which impose the highest registration for the Department of Motor Vehicles to ensure improved air quality. Additionally, the state’s laws also levy the highest smog certification fees in the country. As a result of these costs and extensive process for regulation approval, Tesla Motors CEO Elon Musk announced back in May that California was an unlikely  location for the factory.

However, with a growing number of incentives that California state officials is offering Tesla, it is now very likely that the electric car maker will finalize California as the location for its highly anticipated lithium ion plant.

The other options for the Gigafactory locations are New Mexico, Arizona, Texas, and Nevada. While the company has not disclosed any official decision regarding the factory site, it has taken the first step and started digging operations at the Industrial Center in Tahoe-Reno in Nevada.

California is the state that Tesla Motors in based in, and may be the strongest candidate in the ongoing battle between states. California’s main advantage is the Salton Sea, which is a rift lake on San Andreas Fault, and is located in the Coachella valley in California. There is a plentiful amount of lithium in reserves in the lake, which is a significant element in the production of batteries for Tesla’s 100 percent electric vehicles.

By making the Gigafactory located in the state of California, Tesla’s operations reap the benefits, since it simplifies the processes for the company, as well as removing supply chain bottlenecks. The fact that Tesla’s electric vehicle manufacturing plant is also located in Fremont, a nearby city, is an additional advantage. If Tesla chooses California as the location for its Gigafactory, the most likely sites for its battery manufacturing plant is the Concord Naval Weapons Station or the Mather Air Force Base in Rancho Cordova.

A major selling point of hosting the Gigafactory in California is the umber of jobs that the facility will create. Tesla’s factory is predicted to create more than 6,500 jobs and thousands of additional employment opportunities in supporting industries.

The timely completion of the Gigafactory is incredibly important to Tesla’s plans to launch a more affordable mass market Model 3 vehicle. The company has made the decision to target a larger market with its cheaper, 100 percent electric vehicle, which will retail at a price point much lower than its current Model S.

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