Nevada Legislature Approves $1.25 Billion In Tax Breaks For Tesla Gigafactory

3 years ago by Eric Loveday 18

It's A Done Deal!!!

It’s A Done Deal!!!

The Nevada Legislature was called back into session to broker the Tesla Gigafactory deal.

Late Thursday night (actually, in the overnight hours), the state legislator approved the $1.25 billion deal brokered by Governor Brian Sandoval to bring Tesla Motors’ $5 billion battery Gigafactory to Nevada.

As USA Today reports:

“Both the state Senate and Assembly unanimously approved the deal, strung together with four bills including the marquee measure, Senate Bill 1. Sandoval will sign the legislation late Thursday, local time.”

Sandoval has signed the legislation, so it’s now officially official: the Tesla Gigafactory will be in Nevada.

CEO Elon Musk Tweets

CEO Elon Musk Tweets

According to USA Today:

“SB1 gives Tesla TSLA about $1.25 billion in tax abatements in exchange for Tesla investing $3.5 billion in the state within the first 10 years of the agreement. It passed the Senate with a 21-0 vote.”

Tesla Tweets

Tesla Tweets

USA Today reports that automotive dealerships (and insurance companies) are the big losers in this Tesla-Nevada deal:

LOSERS: AUTO DEALERS, INSURANCE

Although the tax-abatement bill was the major piece of legislation, three other bills also passed both houses Thursday:

• Assembly Bill 1: Provides Tesla with eight years of discounted electricity from NV Energy. The law expands the existing discount period to eight years from four years and requires the company to sign a 10-year contract to purchase grid power from the utility. The value of the discount is estimated to be about $8 million over the eight years. Northern Nevada power customers will see their bill go up about $1.52 a year to pay for Tesla’s discount.
tesla

• Assembly Bill 2: Allows electric car manufacturers to sell directly to consumers, bypassing the need for a dealership. This has been a contested issue in Texas and Arizona, where auto dealers and their lobbying arms worked to prevent Tesla and other manufacturers from selling directly to customers.

• Assembly Bill 3: Eliminates a tax break for insurance companies that locate their home offices in Nevada. The tax break is worth about $25 million a year. That money will be shifted to pay for Tesla’s tax incentive package. Insurance companies will keep their tax break until Jan. 1, 2016, when the program will shrink to $5 million a year. It will be completely eliminated in 2021.

Source: USA Today

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18 responses to "Nevada Legislature Approves $1.25 Billion In Tax Breaks For Tesla Gigafactory"

  1. CherylG says:

    Tax breaks for billionaires and increased electricity costs for the little people. Woo hoo!

    Power to the people….I mean power to the .0001% !

    1. Mark H says:

      Incentives are always a gamble in capitalist society, true enough. There are risks. No guarantees. But if the risks seem worth taking, most legislators would vote unanimously to put a $1 in and get $80 in return. Even $40 would be considered worthwhile.

      As for the little guy’s power bill going up on average $1.52. There is a very good chance that the little guy has a family member who either works there or their current business profits from such an investment. To that, I am pretty sure that will be there response too. Woo hoo!

      1. MDEV says:

        CherylIG
        We fell sorry for you, is time to move your agenda to take on Polar beers, nature, solar energy, you are a looser with Tesla.
        Be strong one day you can live in Coal Avenue and Fox street.

    2. Mint says:

      Leave it CherylG to bitch about $1.52/yr for a factory that will increase local GDP by 20%.

      Probably the type of person to pay $10 in gas driving across town to avoid her local grocer’s $0.50 price hike for a bag of rice.

  2. Lindsay Patten says:

    I’m a little surprised that in a 1.25 billion dollar deal they thought it was a good idea to up everyone’s electric bill for the sake of a measly 8 million dollars. On the other hand $1.52 per YEAR is pretty trivial.

    The “net zero energy” “powered by renewable energy” aspect is interesting. That could go some way to blunting the life cycle analysis based claims that emissions during manufacture make Teslas less green. It would be interesting to see side by side LCAs with and without renewable powered battery production.

    8 million in savings when they are net zero energy is also interesting.

  3. mrenergyczar says:

    The millions pumped into the school system budget is the real winner from all of this.

  4. GeorgeS says:

    Why should Tesla have to buy any power?
    This is a net zero factory right?

    1. I was wondering the same thing, but since it’s for the first 8 years, perhaps they anticipate using a lot of grid energy in those years. It may take them 8 years to become “net zero”. Of course, makes you wonder if the terms is all that useful, but it’s way better than not even caring about that stuff, like 98% of business up to this point. So, it’s great that they’re doing it.

    2. TeslaDan says:

      How will they build the factory and establish operations? They need electricity to actually build at the site and get operation moving till the solar panels and battery systems are operational! Duh!

  5. Huffster says:

    Required to buy power from NV power company? Hope that power is clean generated or Tesla and Elon will get flak from greenie groups and some potential customers.

    So will Tesla buy dirty power but then sell its clean power right back for net zero to comply? Hope not.

    1. Anthony says:

      NV Energy’s portfolio is 12% renewables, 18% coal (and decreasing, they will shut down their last coal plants soon, likely before this factory opens), and 70% natural gas.

  6. Anon says:

    Electric Avenue:

    1. GeorgeS says:

      Hey Anon,

      Your right.

      Elon’s solar panel farm DOES look like an 18650 battery cell!!

      Electric Avenue!!

    2. Spec9 says:

      *Does 80’s dancing*

  7. Jack says:

    Fortunately the electricity in the Reno area is provided by NV Energy’s Frank A. Tracy natural gas fired power plant. Combine that with a decent net-metering agreement and the gigafactory should run on pretty clean power.

    1. GeorgeS says:

      Now there’s a net metering agreement I’d like to see.

  8. John Hollenberg says:

    Probably a good idea to use the correct term in the title and throughout the article – legislature. Unless of course this is all due to one legislator whose name wasn’t mentioned in the article. Just sayin’.

  9. jmac says:

    Rectangular emerald diamonds

    Musk referred to the factory as being diamond shaped.

    Apparently, he was referring to an emerald cut diamond.

    http://www.diamondsourceva.com/Education/Shape/diamonds-shape-emerald-cut.asp