The Tesla Motor Company is expected to announce Thursday that it has chosen Nevada as the site the automaker’s first “gigafactory” for battery production. The decision is a huge coup for Nevada, which is eager to diversify its tourism-dependent economy and has one of the highest unemployment rates in the country.

Tesla representatives spent much of the spring and summer evaluating potential sites in California, Arizona, New Mexico, Nevada and Texas. Tesla CEO Elon Musk said the gigafactory will eventually produce more lithium-ion batteries than the rest of the world manufactured in 2013.

The five-way contest for the proposed factory, and its promise of 6,500 manufacturing jobs, was fiercely competitive. Musk personally engaged in many discussions with state governors, economic development officials and even members of Congress. Tesla has already excavated on the presumed site at the Tahoe-Reno Industrial Center, roughly a four-hour drive from Tesla’s Fremont factory.

“The project is the holy grail sought by the Nevada foot soldiers of economic development,” said John Boyd of The Boyd Co., a New Jersey-based site-selection firm. “It will have a huge economic impact on the housing, hotels, gaming, and construction industries in the Reno area.” Tesla expects to sell 35,000 all-electric Model S sedans in 2014 and is gearing up production of its Model X SUV, which will hit the market next year.

By 2017, it plans to begin delivery of its more affordable “Gen 3” sedan, which it hopes to sell for about $35,000, or roughly half the cost of the cheapest Model S. Driving down the cost of battery packs is key to making electric cars more affordable. But the gigafactory is not just for car batteries. Tesla is increasingly exploring stationary energy storage for homes, businesses and utilities.

“The Gigafactory represents a fundamental change in the way large-scale battery production can be realized,” Tesla Chief Technical Officer JB Straubel said in a statement earlier this summer.

“Not only does the gigafactory enable capacity needed for the Model 3 but it sets the path for a dramatic reduction in the cost of energy storage across a broad range of applications.” Nevada Gov. Brian Sandoval, will convene a special session of the state’s legislature to finalize the details of Nevada’s incentive package, according to a source close to the negotiations.

The session could convene as early as Sept 9th.