Tesla Motors, a Palo Alto-based motor company that has led the auto industry in eco-luxury vehicles in the last few years, recently ruled out California's bid to develop a $4 to $5 billion battery factory that is projected to employ 6,500 workers.

Despite the fact that more than a third of Tesla's global sales for its Model S sedans were purchased by California citizens in 2013, according to the Los Angeles Times, the automaker is looking in Arizona, Nevada, New Mexico and Texas to place its 1,000-acre site.

Last week, Tesla announced the list of finalists in a blog post on its website.

Tesla has thrived in the California auto market because of the state's strict pollution-control policies, which have allowed it earn tens of millions of dollars by selling environmental credits to other auto manufacturers.

California Gov. Jerry Brown's Office of Business and Economic Development released a statement Friday which said the office will continue to maintain a partnership with Tesla and work with the company on future ventures.

Tesla's "gigafactory" is supposed to open in about three years, and when it does, the large site will produce more lithium-ion batteries than the entire industry currently does. The production of the batteries will allow the company to manufacture a vehicle that will cost nearly half of what the Model S sedan goes for now, which is between $70,000 and $100,000.

Tesla currently manufactures its vehicles at a Fremont, Calif. factory it bought for $42 million that was previously run by General Motors.

According to the Arizona Republic, members of the Maricopa Association of Governments sent a letter, signed by Mesa and Avondale mayors, to Tesla's Chief Executive Elon Musk, inviting him to visit Arizona to "see firsthand Arizona's outstanding business environment."

"What we wanted to show is there is a broad base of support for this," Mesa Mayor Scott Smith told the Republic.

The MAG letter to Musk said that the state has a "skilled workforce, business-friendly tax structure, and quality education system" to "provide an ideal site for the new energy economy."

Tesla's Model S was awarded the "Motor Trend" magazine's 2013 car of the year.