Nevada Approves $330 Million in Tesla Tax Abatements Over Gigafactory Expansion

The new Tesla Gigafactory is seen during a media tour in Sparks, Nev., on July 26, 2016. (Rich Pedroncelli/AP Photo)

Tesla Inc. will receive more than $300 million in tax abatements over the next 20 years, a Nevada board approved on Thursday, commending the automaker’s investment in an existing manufacturing site in Storey County that is projected to create thousands of jobs.

In a statement on Mar. 2, Nevada Gov. Joe Lombardo announced the tax deal, which was approved by board members of the Governor’s Office of Economic Development (GOED), who praised the company for offering good-paying jobs and a nearly decade-long boost to the local economy around Tesla’s Nevada Gigafactory.

“Tesla has far exceeded every promise they made going back to 2014,” said Lombardo, who chairs the GOED board. “To date, they have invested $6.2 billion in Nevada, built a 5.4 million square foot Gigafactory, which provided 17,000 local construction jobs and created more than 11,000 highly paid permanent jobs.”

The new tax deal comes after Tesla announced in January that it will make a $3.6 billion capital investment at the site in Storey County. The investment includes an expansion to its existing facility, which is projected to create 3,000 new jobs at an average hourly rate of $33.49.

Tesla plans to add four million square feet of production space at the site, which will include two new factories at the Truckee-Reno Industrial Center, about 20 miles east of Reno-Sparks along Interstate 80.

“The new projects will create an estimated 9,275 construction jobs and 5,858 additional indirect and induced jobs through 2027,” the GOED board stated. “This level of construction activity could result in a one-time economic impact of $2.8 billion over the next six years. The Tesla expansion could create an annual economic impact estimated at $2.2 billion or $38 billion over the next 20 years.”

One of the new plants will have the capacity to produce batteries for 1.5 million light-duty vehicles a year, Tesla said. The other will have the company’s first production line for electric combination trucks. Tesla CEO Elon Musk has said the goal is a battery range of 500 miles when pulling an 82,000-pound load.

The Tesla Semi is on display at the Tesla Giga Texas manufacturing facility during the "Cyber Rodeo" grand opening party in Austin, Texas, on April 7, 2022. (Suzanne Cordeiro/AFP via Getty Images)

Members of the GOED board said the company’s investment could generate an estimated $685 million in net state and local revenues over the next 20 years, assuming the company uses the $3.6 billion to invest in land, buildings, and equipment.

“Assuming a capital investment of $3.6 billion in land, buildings, and equipment, the company could generate an estimated $21.8 million in gross average annual property tax revenues, $11.2 million in gross average annual sales taxes, $1.1 million in average annual business license taxes on utilities, and $2.1 million in gross average annual modified business taxes over 20 years,” the board calculated.

The board also revealed that Tesla will start paying an annual minimum of $53 million in real and personal property taxes and modified business taxes related to Giga Nevada starting in July 2024, and in perpetuity thereafter, in relation to an initial $1.3 billion tax abatement deal that was agreed upon in 2014.

Tom Burns, executive director of GOED, said in a statement that Tesla’s Gigafactory has propelled the state manufacturing industry and established lithium-ion batteries as the state’s eighth-largest export.

“Since the inception of GOED, the main goal has been to diversify Nevada’s economy,” said Burns. “The Nevada-Tesla partnership cemented a new economic sector in Nevada for the manufacturing of electric vehicle battery packs and drive units, and energy storage products.”

The Associated Press contributed to this report.

From NTD News.