Tesla Motors received a guarantee of $1.3 billion in tax breaks from the Nevada state government this week after agreeing to build the world’s largest lithium-ion battery factory outside Reno.
“Nevada has announced to the world — not to the country, but to the world — that we are ready to lead,” Nevada Gov. Brian Sandoval announced Thursday after finalizing a package of tax incentives designed to span the next 20 years, Reuters reports. (RELATED: Tesla And Panasonic Team Up To Build Battery Gigafactory)
The deal will save Tesla an estimated $725 million in exemptions over two decades, plus another $300 million in payroll and other additional taxes.
Nevada beat out several other states including Texas, New Mexico, Arizona and Tesla’s home manufacturing state of California to secure the $5 billion Gigafactory on Electric Avenue, McCarran, Nevada — some 20 miles east of Reno. The factory will add 6,500 jobs to the state’s struggling economy, which was hard hit by the housing and financial crisis that began in 2007. (RELATED: Texas Gov. Rick Perry Wants Tesla In Texas)
The factory is also a key component in CEO Elon Musk’s plan to sell half a million Tesla’s by 2020. Tesla expects a number of those units to be the company’s forthcoming Model 3, which will retail around half the price of its $70,000 leading Model S thanks to the cheaper cost of battery production afforded by the factory. (RELATED: S-E-X SELLS: Tesla’s New Model Fills Out The Company Lineup)
To free up the money, Nevada legislators axed a program providing more than $100 million in tax credits to insurance companies and another one providing about $70 million for the film industry. The state will also take on the $40 million-plus cost of building a road connecting the factory to major highways.
Beyond the jobs generated by the factory itself (half of which must be filled by Nevada residents in the absence of a state-approved waiver), the factory is expected to create another 3,000 jobs in constructions and 16,000 in other indirect fields.