Tesla wants fresh $330M+ in Tax Breaks

Tesla is set to receive over $300 million in tax abatements over the next two decades for a major expansion of its facility in northern Nevada. This is in line with the deal Tesla signed when it first came to the area in 2014, promising new jobs and investments. The tax breaks will be voted on by the Nevada Governor’s Office of Economic Development, after a month of secrecy due to a nondisclosure agreement with state officials. Tesla expects to generate 3,000 jobs, with an average rate of $33.49 per hour, and to invest $3.6 billion into the economy. The company will also cover health insurance for 91% of its employees.

Northern Nevada’s economic diversification and rising housing costs have been attributed to Tesla’s presence in the area. With the proposed expansion, Tesla will have received over $10 billion in capital investments in northern Nevada between 2014 and 2028. Tesla expects over $750 million in direct and indirect tax revenue from both the proposed tax breaks and those approved in 2014.

Despite support for the expansion from several entities, some lawmakers in Nevada’s Democratic-controlled legislature have scrutinised the proposed tax abatements. Some have called for a delay on the vote in order to receive more public comment. Concerns were raised over the board’s lack of oversight for providing such massive tax breaks, and some Tesla employees being on Medicaid, despite the hourly wage being higher than the qualifying income. Although the request for delay has been made, it appears that the meeting will go ahead as scheduled.

Tesla plans to produce high volumes of semi-trucks and to make enough cell batteries for 2 million light-duty vehicles annually in Nevada. The expansion will take place at an existing operation at the Tahoe Reno Industrial Center, about 20 miles east of Reno-Sparks. The plan takes the company a step closer to producing fully electric Tesla Semi vehicles, with plans to make 50,000 trucks in North America in 2024.

Tesla’s presence in northern Nevada is one of several pushing the region to the forefront of the US transition to green energy, a major goal of the Biden administration. The administration seeks to move away from gas-powered cars in the larger fight against climate change. This includes the construction of a lithium mine and a battery recycling plant in the region.