GOED Unanimously Approves $330M In Tax Abatements For Tesla Expansion

This morning, The Governor’s Office of Economic Development board (GOED) voted unanimously to approve a set of four tax abatements totaling $330 million over 20 years for Tesla’s planned $3.6 billion capital investment in Storey County.

Tesla contends that the new Gigafactory will bring 3,000 jobs to the region offering an average rate of $33.49 per hour and will cover health insurance for 91 percent of its employees.

Tesla plans to add 4 million square feet in two new factories at its existing Gigafactory site. The new 100-gigawatt-hour battery cell factory will have enough capacity to produce batteries for 1.5 million light duty vehicles annually. The other will be the company’s first Semi factory, a fully electric combination truck with 500 miles of range.

Workforce lead for Tesla, Chris Reilly, told the board that Tesla will invest in education and manufacturing classes for employees, offer more carpool options, and provide workforce housing and a child care facility for 200 families. Reilly also indicated that Tesla is exploring programs with UNR and Truckee Meadow Community College to provide tailored education courses that would allow workers to pursue specific career paths.

The GOED released a statement outlining the economic impact to the region and the state:

The new projects will create an estimated 9,275 construction jobs and 5,858 additional indirect and induced jobs through 2027. 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. The 3,000 people Tesla will employ will generate $209 million in annual wages by 2030.

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. All total, this will result in an estimated $685 million in net state and local revenues the next 20 years.

As a result of its first abatement agreement in 2014, Tesla will begin paying an annual minimum of $53 million in real and personal property taxes and modified business taxes relating to the Gigafactory commencing July 1, 2024, and in perpetuity thereafter.

Upon approval, Governor Joe Lombardo, who chairs the GOED, released this statement:

“Tesla has far exceeded every promise they made going back to 2014. 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.”