When Tesla Motors CEO Elon Musk and Nevada Governor Brian Sandoval announced that the company’s new battery Gigafactory would be built just outside Reno, the impression left was that there were few details left to discuss.
Earlier this week, state legislators were called in for a special legislative session in order to hammer out exactly how the deal would take place, and which other current funding arrangements would be sacrificed to make it happen.
The incentives total $1.25 billion worth of tax breaks, including that, according to the Las Vegas Sun, “Tesla won’t pay sales or property tax until 2034. The company won’t pay property tax until 2024. The state will give Tesla tax credits for investing up to $3.5 billion and offering high-wage jobs.”
The Sun also says there’s disagreement around exactly how many jobs the Gigafactory will produce. “The governor’s office estimated Tesla will bring the state 22,000 jobs. Around 6,500 will be at Tesla’s factory…[and] the remainder will spur from growth propelled by the electric car maker’s push to be the nation’s most affordable and desirable vehicle not dependent on fossil fuels.”
However, both the Nevada Policy Research Institue, described as “a Las Vegas-based libertarian think tank,” and a global research professor at New York University, sent out separate releases saying the more accurate number would be much lower, at around 4,500 jobs. Given the governor’s estimate that Nevada would reap $100 billion in 20 years — for every dollar the state spends would bring a return of $80 — it was asserted that projected benefits would be severely reduced.
According to the Reno Gazette-Journal, by early Thursday morning, progress had been made, although at the cost of other spending arrangements: $70 million was taken from a “movie-production tax abatement program, passed in the 2013 Legislature, and switch[ed] to the Tesla deal,” as was $27 million in tax breaks for insurance companies whose offices are in Nevada.
The RGJ also confirmed that “Nevada’s franchised auto dealers agreed to not stand in the way of a plan to allow Tesla to sell its electric cars ‘factory direct’ to Nevada consumers. The issue of selling cars through franchised auto dealers was a major sticking point in negotiations with Texas and Arizona to locate the Gigafactory in those states.”
The legislature is expected to continue working through approval of the deal later today, and we’ll keep you updated on its progress.