Tesla's Battery Factory Could Be Great For A Bankrupt California City

Based on reports that have emerged over the past few weeks, it looks like California is back in the running as a location for Tesla's Gigfactory - a massive facility that will build the advanced lithium-ion batteries needed to get the electric carmaker to the next level.

Nevada, Texas, New Mexico - these were the states that appeared to be in a better position to become the Gigafactory's home than California.

But there's been some chatter about Elon Musk and his company potentially taking over an old U.S. Navy facility near San Francisco. And now, according to the Los Angeles Times' Marc Lifsher, the Northern California city of Stockton could also be a candidate.

It's "shaping up as a leading in-state contender," Lifsher wrote.

The arrival of a $5-billion new-economy manufacturing hub, along with its projected 6,000-plus jobs, would be just what the doctor ordered for Stockton. The city, about an hour's drive northeast of Tesla's Fremont, Calif. assembly line, went bankrupt in 2012.

Its reign as the largest city in U.S. history to go bust didn't last long - Detroit topped Stockton in 2013.

The housing downturn and unsustainable municipal debt were to blame for Stockton's woes (some observers also blamed pension obligations and unions). The city of 300,000 still hasn't emerged from Chapter 9 (the muni version of Chapter 11), but it's expected to later this year.

Some prominent Californians weren't thrilled when it seemed that the state had lost its shot at the Gigafactory. And Stockton's troubles were emblematic of how rough the financial crisis was for the state.

But if Tesla ultimately locates its battery factory there, a lot of residents might decide that the city's luck has finally turned.

A deal that Tesla reportedly just signed with Panasonic to partner for the Gigafactory indicates that the facility, which will supply Tesla with enough batteries to power 500,000 vehicles, is on track to become a reality.