Often, that money goes to transportation companies. States have long seen manufacturing as the perfect place to bet tax dollars, viewing the incentive as a down payment - a lure that will first draw a business, then an industry, then a new population built around the industry.
On one level, it’s hardly surprising that Tesla would be the beneficiary of such a deal. Should the factory fail to live up to its promises, the question that has surfaced about the project will likely continue to plague the deal for years: was it worth it? *** Some economists have questioned the incentives, while the state and Tesla have issued apparently conflicting numbers on the company’s immediate prospects. Tesla has been reporting on its progress since the Gigafactory first broke ground, but as construction tails off and manufacturing kicks up, the long-term future of the project still remains uncertain. Tesla could take in nearly $1.3 billion in tax incentives
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Assuming Tesla meets its obligations under the deal, it will spend 20 years free from sales tax, and 10 years free from property tax, while it receives millions of dollars more in tax credits. Over the next 20 years, Tesla could take in nearly $1.3 billion in tax benefits for building its Gigafactory in Nevada, according to projections from the state, as hires are made for the factory locally and from around the country. Nevada ultimately won the factory deal, but at a cost that has proven controversial: the state offered an incentives package that was the largest in Nevada history, and became one of the 15 largest nationally. Until, without warning, Tesla came back to the table. “Really, Nevada wasn’t in a position to directly respond to that, either functionally or financially,” says Steve Hill, executive director of the governor’s office of economic development in the state. (California, after being dropped, was also later put into the running again.) The company asked for $500 million, up front, in cash, to move to Nevada, but was rebuffed by officials in the state. Tesla bargained its way through lucrative deals, asking local governments for millions in tax incentives to grease the company’s wheels.įour states - Arizona, Texas, New Mexico, and Nevada - became finalists for the factory, and were more than willing to accommodate Tesla by competing with other states’ bids. But the company, and CEO Elon Musk, wouldn’t go just anywhere. Tesla had been shopping for a site to place its Gigafactory, promising to create thousands of jobs wherever the massive battery plant landed.
He told them that he enjoyed driving a Tesla, the Los Angeles Times wrote, and would happily make one addition: “a made-in-Texas bumper sticker." Unseasonably dressed in a black jacket, Perry was in California for fundraising, but nonetheless took time to address reporters in front of a local hotel. In June of 2014, Texas Governor Rick Perry pulled into Sacramento behind the wheel of a Tesla Model S.
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