The statement at the end of the article that "[e]ven if the company fails to sell 500,000 vehicles a year, some of the gigafactory’s batteries could be used in the stationary storage market (which helps explain why he wants to build in the southwest, where solar and wind power farms can be incorporated.)" doesn't make sense to me as a reason even worth consideration, especially given in the same article is the statement that "it would exceed production of every other battery factory in the world – combined". The importance of location in the southwest US for the fledgling alternative energy market seems completely irrelevant if one is striving to become the worldwide majority supplier of a multi-billion dollar market. The access to the port of Galveston would certainly be valuable in shipping that product to the likely majority market offshore, but many other states with ports would likely be interested in a multi-thousand job plant.
The value of a finished battery pack is about $20 / lb. Truck transport across the US costs about $0.35 / lb. So indeed, proximity to installation locations makes less than 2% difference.
Reno is ~235 miles from the Fremont factory, or about 4 hours.
The gigaplant is going to be a critical part of Tesla's supply chain, and distance is critical. Better to have your main component within a short drive, and let cells/packs destined for others make the long slog via rail or ship.
