Nevada’s $1.3B incentive package for Tesla formally approved
The governor’s economic development office board on Thursday formally approved the state’s $1.3 billion incentive package for Tesla Motors to build its 5.8 million square-foot electric battery factory in Northern Nevada.
Tesla, based in Palo Alto, Calif., with a production facility in Fremont, Calif., builds electric cars, and its Model S vehicle will be followed next year by a new crossover model.
Thursday’s action was the final public step to close the Tesla deal. The approval will enable the economic development board to sign a contract with Tesla formalizing the state incentives.
Called a transformative development in the state’s bid to expand and diversify its economy, the project will produce 6,000 high-paying jobs within five years and result in construction of a building with the largest presence in the world.
The Nevada Legislature approved the bulk of the incentive package in a two-day special session in September.
Because of the size of Tesla’s investment, the company qualifies for abatements on sales taxes, real and personal property taxes and modified business taxes through June 2034.
The company also will receive transferable tax credits worth $195 million that would be granted to Tesla partners in the development of the factory.
The company already has announced that Panasonic would partner on the project.
Tesla will be required to meet a series of performance thresholds to be eligible for the tax abatements and credits.
In addition to factory jobs that will pay an average $27 an hour, about 3,000 construction jobs will be produced at the peak of work at the factory site in Storey County, about 25 miles east of Reno.
Daniel Witt, manager of business development and policy for Tesla, said he expects a portion of the factory to open by the middle of next year with 6,000 working on the site by 2024.
Witt emphasized that Tesla intends to work closely with the state’s universities and community colleges to develop programs that would enable them to provide a steady stream of qualified employees to work at the factory.
State officials estimate that state and local tax revenue would increase directly from the offered incentives as well as indirectly through support companies that are expected to open as Tesla progresses. Officials estimated local government would collect cumulatively over 20 years $986.1 million, school districts, $513.1 million, and the state, $446.9 million.
The state ordered three independent analyses to verify the economic impact the presence of the Tesla facility would have on the state. Analysts based some of their research on the effect a BMW car manufacturing plant has had on South Carolina.
Board members had few questions about the incentive package since it was vetted during the special legislative session.
Witt was asked about the market for Tesla vehicles. He said that Model S sedan demand is higher than supply and that when the company’s SUV model rolls off the line, it is expected to be in high demand.
Contact reporter Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Find him on Twitter: @RickVelotta
