Tesla gets $330 million tax break for Nevada expansion
Tesla on Thursday received more than $330 million in tax breaks from Nevada for the company’s commitment to a massive expansion of its sprawling vehicle battery facilities east of Reno, including the construction of a new electric semi-trailer factory.
The approval of the governor’s Office of Economic Development came as Governor Joe Lombardo cited the benefits of good-paying jobs and a nearly decade-long local economic boom around Tesla’s massive Gigafactory.
“Tesla has surpassed every promise they’ve made since 2014,” said Lombardo, a Republican who chairs the board, which is made up of senior state, education and business officials.
The deal is the latest, marking northern Nevada as a focus in the U.S. transition to green energy as Democratic President Joe Biden’s administration seeks to move away from gas-powered vehicles in the larger fight against climate change.
Lombardo took office in January and has proposed a two-year state budget of $11 billion. He tweeted a photo of himself with Tesla CEO Elon Musk at the industrial park east of Reno-Sparks on Jan. 24, calling the upcoming agreement “an incredible investment in our state.” Musk also owns Twitter and the rocket company SpaceX.
However, the $330 million figure remained secret until Monday due to a non-disclosure agreement between Tesla and state officials.
This led to complaints from some lawmakers in the Democrat-controlled state Legislature that they had only three days to review a 20-year tax break.
“There is little to no opportunity to examine how this deal might affect the region’s housing services, public schools, public safety and other vital government services,” Senator Dina Neal said in a statement. The North Las Vegas Democrat chairs the chamber’s Revenue and Economic Development Committee. Neal did not immediately respond to messages asking for further comment on Thursday.
According to Lombardo’s statement, Tesla has spent $6.2 billion on its existing 5.4 million square foot Gigafactory, which the governor said has created 17,000 construction jobs and more than 11,000 “high-paying permanent jobs.”
Tesla expects to invest another $3.6 billion and create 3,000 new jobs at an average hourly rate of $33.49, with 91% of its employees having health insurance.
The company plans to add 4 million square feet (371,612 square meters) of manufacturing space at two new plants at the Truckee-Reno Industrial Center, approximately 20 miles east of Reno-Sparks off Interstate 80.
A plant will have the capacity to produce batteries for 1.5 million light commercial vehicles per year, the company said. The other will have Tesla’s first electric station wagon production line. According to Musk, the goal is a battery range of 805 kilometers (500 miles) when towing a load of 37,000 kilograms (82,000 pounds).
Public support for the deal came from the White House and Mitch Landrieu, Biden’s infrastructure chief; from the University of Nevada, Reno President Brian Sandoval, a Republican who, as Nevada governor, approved an initial $1.3 billion deal to downsize Tesla in 2014; and an on-site preschool, which said it will extend its hours to accommodate workers.
Three elected lawmakers in rural Storey County, where the Tesla factory is located, commended the economic benefit to the region. But they said the county, with just 4,100 permanent residents, earns more tax revenue to support infrastructure and services like police, fire and emergency services.
Tom Burns, executive director of the governor’s office of economic development, said in a statement that Tesla’s Gigafactory has boosted the state’s manufacturing industry and established lithium-ion batteries as the state’s eighth-biggest export.
A Nevada-based recycling plant for electric vehicle batteries received a $2 billion green energy loan from the Biden administration in February.
On Wednesday, a federal appeals court refused to block construction of the US’s largest lithium mine, which is to be dug in northern Nevada, while the court reviews claims by conservationists and tribes that the government illegally authorized them in a rush to supply raw materials for electric vehicle batteries .
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