Nevada analysis: Tesla to bring 6,500 jobs

CARSON CITY — An economic analysis of the economic impacts of the Tesla Gigafactory project in Northern Nevada suggests the electric car manufacturer will create 6,500 jobs over the next four years with an average wage of $27.35 per hour.

The company would build out in four phases beginning with 700 jobs in 2015, 1,000 more jobs in 2016, 3,000 more in 2017 and 1,800 jobs in the final phase in 2018.

The company would make a $1 billion investment in buildings and $3.95 billion in equipment in the first four years.

It would make additional equipment purchases totaling $5 billion from 2019 to 2028. The labor cost associated with installing the equipment is estimated at $1.3 billion.

The independent report, commissioned for the Governors Office of Economic Development, was performed by Applied Economics of Phoenix, Ariz.

It says in part: “In total, Tesla could generate an estimated $1.95 billion in direct and indirect tax revenues, net of abatements and reimbursements, to state and local governments in Nevada over 20 years under the most likely scenario.”

The report comes as Gov. Brian Sandoval prepares to call the Nevada Legislature into special session Wednesday to approve a series of bills designed to implement tax abatements and incentives for Tesla worth as much as $1.3 billion over 20 years.

While not permanent, construction jobs associated with the battery plant will generate an estimated 9,000 direct jobs and 4,700 additional indirect jobs, for an annual average of 3,000 direct and 1,600 indirect jobs over a three-year period from 2015 to 2017

In addition, labor associated with equipment installation will result in 11,400 direct and indirect jobs or an annual average of 2,300 over the first three years. The combination of these two activities would result in a one-time economic impact of $2.4 billion, or an annual average impact of $799.1 million for the first three years. These construction impacts are in addition to the operations impacts.

“All total, Tesla could create an annual economic impact of $5.4 billion at stabilized annual levels, or $96.9 billion over the next 20 years on the Washoe/Storey County region, based on the high or most likely scenario,” the analysis says. “Their operations could directly and indirectly support an estimated 22,700 total jobs (based on 6,500 direct jobs) and to $1.3 billion in annual personal income, or $24.1 billion in personal income over the 20 year period.”

The factory could generate overall impacts of $100.6 billion over 20 years, the report says.

The proposed package of abatements, reimbursements and tax credits associated with Tesla would total $1.1 billion over 20 years with action by the Legislature to redirect two tax credits worth $195 million, or $1.3 billion without this adjustment, the report says.

Abatements are higher during the first four years due to the effect of sales and use tax abatements. The abatements include a 100 percent real and personal property tax abatement through June 2024; an abatement of all sales and use taxes on construction materials and equipment purchased for 20 years; a 100 percent abatement of modified business taxes through June 2024; and Transferable Tax Credits totaling $195 million including $12,500 per job for the first 6,000 jobs, 5 percent of first $1 billion investment and 2.8 percent of the next $2.5 billion investment.

Contact Capital Bureau reporter Sean Whaley at swhaley@reviewjournal.com or 775-687-3900. Find him on Twitter: @seanw801.