Tesla Gets $9.6 Million In Tax Credits For Gigafactory

2 years ago by Mark Kane 41

Tesla Gigafactory – Drone fly over – October 2015

Tesla Gigafactory – Drone fly over – October 2015

Completed Tesla Gigafactory Rendering

Completed Tesla Gigafactory Rendering

According to an audit by accounting firm Grant Thornton, Tesla Motors received $9.6 million in tax credits from October 17, 2014, through June 30 as part of $1.3 billion in tax abatements and other incentives for its Gigafactory in Nevada.

Through the end of June, Tesla’s investment was estimated at $183 million ($186 million according to Las Vegas Review-Journal article). For the first $1 billion, Tesla can use 5% tax credit and 2.8% for another $2.5 billion.

Important for Tesla is that all conditions for tax abatements and credits were met, according to independent auditors. Some of the conditions are minimum average wages and at least 50% of employees must be Nevada residents.

Source: Las Vegas Review-Journal

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41 responses to "Tesla Gets $9.6 Million In Tax Credits For Gigafactory"

  1. Big Solar says:

    Good!

    1. evcarnut says:

      I DISAGREE…NOT GOOD ENOUGH! NOT EVEN CLOSE! THEY SHOULD HAVE GOTTEN MUCH MORE MONEY CREDITS , THAT IS A PITTANCE , COMPARED TO WHAT TESLA IS DOING FOR THE STATE . TESLA IS TAKING ALL THE RISK WHILE THE STATE REAPS ALL THE “NO RISK’ BENEFITS IF ALL 0F THIS PANS 0UT!

  2. Anonymous says:

    Was anyone really surprised at this?

    1. Pushmi-Pullyu says:

      I’m not surprised, but it’s nice to have it confirmed that Tesla is meeting the Gigafactory 1 milestones it needs to get these tax breaks. Just another indication that Gigafactory 1 development is on track, or maybe even ahead of schedule.

  3. Ocean Railroader says:

    I view something like the Tesla Giga factory as something of national importance due to it affecting the United States’s demand for Mideastern Oil.

    1. Mikael says:

      What demand is that? Are you talking about the 4% of the net use in the US coming from Saudi Arabia or the 1% net use coming from Iraq? 😛

      The US were having 27% net imports of oil in 2014.

      20% of those imports came from the Middle East. That is 5,4% of the total use in the US.

      That is a number small enough that you could get rid off from one day to another by just increasing the gas price slightly so that people just drive slightly less.

      1. Ocean Railroader says:

        A few days ago I came across a report that said the United States uses one billion barrels of oil every 52 days and the world uses 1 billion barrels of oil every 11 days. This report scared me in that if say North Texas does have 20 or 50 billion barrels of oil under it that would only be a five to ten year supply for the United States.

        This means that we should do everything in our power to try and reduce oil demand in the United States to a billion barrels a year as a start.

        1. Mikael says:

          That comment on the other hand I totally agree with. A massive reduction is needed and needed fast. No matter the origin of the oil, the environment doesn’t care if it’s from Canada, Mexico, the US or Saudi Arabia.

          Now you only have to get the people on-board with the idea, they seem very reluctant so far.

      2. GSP says:

        “just increase gas price slightly” – LOLROF

        That was a good one Mikael. With the political climate in the US these days, it would be much easier to just move the mountain to Mohamad.

        GSP

      3. Pushmi-Pullyu says:

        Mikael said:

        “The US were having 27% net imports of oil in 2014.

        “20% of those imports came from the Middle East. That is 5,4% of the total use in the US.”

        In 2015, U.S. imports of OPEC oil were at their lowest level since 1967, due to the U.S. domestic fracking boom. But there are already strong signs of that boom coming to an end. Altho as an EV advocate I would certainly like to think otherwise, the reality is that we will almost certainly be importing significantly more OPEC oil five years from now. It would be quite foolish to make future policy based on a historic low in imported OPEC oil.

        Wall Street Journal “Fracking Firms That Drove Oil Boom Struggle to Survive”

        http://www.wsj.com/articles/fracking-firms-that-drove-oil-boom-struggle-to-survive-1443053791

  4. Koenigsegg says:

    Tesla deserves all the money they can get + some

    1. evcarnut says:

      TESLA IS GETTING ZER0 $$$ PHYSCAL MONIES FROM THE STATE..THEY GET “TAX CREDITS” OR “TAX BREAKS” WHEN THEY MEET THE CONDITIONS SET FORTH THAT WERE AGREED UPON, IN RETURN FOR STIMULATING THE STATE’S ECONOMY BY CREATING THOUSANDS OF JOBS & “INCOME TAX DOLLARS” FOR THE STATE, NOT MENTION ALL THE OTHER MONEY BENEFITS FOR THE PEOPLEOF THE STATE & THE STATE…..EVERYBODY SEEMS TO THINK THAT THE GOVERNMENT IS DOLING OUT MONEY,…”THE GOVERNMENT IS PUTTING OUT “ZER0” PHYSICAL MONIES, “NOT RED CENT”!

      1. Nick says:

        False.

        A penny saved is a penny earned.

      2. Pushmi-Pullyu says:

        evcarnut said*:

        “The government is putting out ‘zer0’ physical monies, ‘not red cent’!”

        It’s certainly true that this will be a large net benefit to Nevada’s tax base, but it’s an exaggeration to say the State and municipal governments aren’t spending any money at all on this project. In fact, they’re spending quite a bit.

        Quoting from Fortune’s article “Inside Elon Musk’s $1.4 billion score”:

        “To give Tesla free land, Hill had orchestrated a three-way agreement to pay for it at public expense. Gilman and his partners would give the automaker the now-level 980 acres. As compensation, the state would pay Gilman’s group $43 million to purchase right-of-way to extend a four-lane road through the industrial park to U.S. Route 50, a major highway. The state would also build the road, at a cost of another $70 million.”

        I highly recommend everyone interested in learning details about Gigafactory 1 read the entire article linked below. For example, those who follow this story closely remember some argument and puzzlement over why Tesla seemingly got an early start on clearing and leveling the ground, yet then let the site sit idle for months before major construction began. This article provides a detailed story of the events that ultimately resulted in this project being located in Nevada, including the ground-clearing and subsequent delay before major construction:

        http://fortune.com/inside-elon-musks-billion-dollar-gigafactory/

        *I hope no one minds me editing evcarnut’s ALL CAPS comment to lower case…
        🙂

        1. Ocean Railroader says:

          I don’t mind Tesla getting tax breaks but as long as it’s with in reason. And as long as the jobs created outweigh the tax breaks.

        2. Tech01x says:

          So they build a road they wanted to build anyways. Ok.

          1. Pushmi-Pullyu says:

            I doubt anyone but a Tesla basher would try to claim that the $70 million Nevada is spending to build a highway connection to Gigafactory 1’s industrial park is “spending taxpayer money to support Tesla”, but the $43 million Nevada paid the park owner, supposedly for a “right-of-way”, is another matter.

            This is land characterized in many articles as “virtually worthless”, and connecting the industrial park to a major highway is clearly a benefit to the value of the undeveloped real estate in that location. If anything, the property owner should be paying the State for building the connecting highway! By comparison, Disney paid only $5 million for Disney World’s 30,500 acres of land, most of which was also characterized as “worthless”. Admittedly land prices were lower circa 1965, but still! And how much land does that Nevada highway right-of-way encompass? Surely far less than Disney World’s 48 square miles!

            It seems pretty obvious to me that this supposed “right-of-way” purchase is just a way for the State to pretend that it’s not buying the land for Gigafactory 1 and giving it away to Tesla. I don’t know, but maybe there are even State laws or regulations intended to prevent this sort of thing, and this three-way deal is the way Nevada scoundrels politicians circumvented the legal limits.

            But let’s take a step back and look at the overall deal: It’s still a pretty big net benefit, in the long term, to Nevada and to Nevada taxpayers. But let’s please not pretend that Nevada only gave tax breaks to Tesla; let’s not pretend the State of Nevada did not really pay out any money to attract the Gigafactory 1 project.

      3. martinwinlow says:

        Please stop ‘shouting’. I want to read what you have to say – just turn off the caps-lock! MW

  5. ross says:

    How much of a bail-out did GM and the other big auto makers get in the last distant recession?

    How much tax credits, incentives and handouts do oil companies get?

    1. Anon says:

      GM got about 50 Billion. US Government lost more than expected when selling off the last of it’s shares. Blame goes to things like defective ignition switches, recalls, etc.:

      http://www.reuters.com/article/us-autos-gm-treasury-idUSBREA3T0MR20140430

      The information about Oil Subsidies is purposely veiled, so getting hard numbers has been historically difficult, but this site does a good job of doing the math:

      http://priceofoil.org/fossil-fuel-subsidies/

      Global Oil Subsidies are about one trillion, each year.

      1. evcarnut says:

        THE GOVERNMENT DOESN’T CARE IF THEY LOSE MONEY…..IT’S “THE PEOPLE’S MONEY” THAT THEY LOSE & NOT THEIRS…………

        1. Nix says:

          Actually, all together between all the bailouts, the Gov’t has had a 10.2% return. Mostly due to the passage of the July 2010 (HR 4173) legislation fixing the original 2008 bailout program.

          The revamp cut TARP funds to just $475 Billion from the original $700 Billion. Also requiring Fannie/Freddie to pay the majority of their profits to the holders of all the 79% of “Senior” shares as dividends (That’s the US Treasury).

          But since I’m certain I’m replying to a troll who previously was known as evnerdgene, who has never posted a positive thing about any green car ever, I doubt facts will matter…

          1. Nix says:

            Just in case anybody isn’t familiar with financial talk, a “10.2% return” means that the gov’t has gotten back every single penny of money they put out, plus 10.2% more on top.

            And that is nowhere near the end of the money that we will get back. We still hold roughly 1/3rd of the original equity that we put out, that we have not discharged. We produce literally billions of dollars in additional profits every quarter off of our investments, continuing to push up the profits, without significantly reducing our equity holdings.

            1. Tim says:

              Hi all,

              Something often overlooked when, discussing the merits and cost of The Tarp bill, is the incalculable cost to entire national and world economy including personal incomes and assets.

              Many including Big Banks, would have us believe repayment of Tarp made up for corruption and fraud from Wall Street and the Investment Banks, but to the contrary Tarp was but a drop in the bucket compared to the economic devastation inflicted on the economy (micro and macro).

              The other comparative numbers that should be considered when discussing Tarps relativity, is the $300 Billion in BONUSES, made by the Big Banks in the 2 years following the inception of Great Recession, made by buying Treasury Bills with bailout money. As well, the 8 years to bring the economy back to some semblance of a recovering economy in not to be overlooked.

              In my opinion, $700 Billion was to little and a 10% return was a pitance compared to devastation inflicted on the overarching economy!

      2. Nix says:

        It should be mentioned that the reason why we lost money on selling GM shares is because we sold them too fast, and created a false stock dip. We drove down the price by over-selling.

        We drove the price down to the $20-25 dollar range, down from the $30-40 dollar range. After we stopped dumping stocks at wholesale prices, GM stocks returned back into the $30-$40 dollar range. We took a stock that was worth about $35, and dumped it at $20 bucks. If we would have held on longer, and only sold shares when it was profitable (like any REAL investor would), we could have literally turned a 12-14% profit, just by waiting a few more years and selling when the price was up around $40.

        But we had one political party that was calling the holding of GM shares a “moral hazard” and forced premature sales. Coincidentally, the biggest buyers of those GM shares at those artificially low prices, were also large donors to that same political party who was demanding the shares be sold. Now those buyers are selling those GM stocks they bought for massive profits.

        We didn’t lose money, as much as we were scammed into selling low by folks backed by the very investors who made massive profits off of those sales.

        1. SJC says:

          That is the GOP, profit before country. Ruin the president even if it ruins the country. Such patriots.

          1. ffbj says:

            How can anyone knock the Grand Old Party after the wonderful slate of candidates for the presidency they have put up.
            Reasonable, intelligent, deeply committed, (or they should be committed) individuals who have only whats best for all Americans in their hearts.

            If you feel otherwise perhaps you just don’t love America like they do.
            j/k

            1. Anon says:

              Mmm, human hearts are sooo tasty. 😉

  6. jelloslug says:

    These kind of tax incentives are common when states are trying to attract big companies. I still think BMW is not paying any taxes in South Carolina for the Spartanburg plant and it had been there for decades.

    1. mhpr262 says:

      Thousands of jobs, especially middle to lower income jobs in manufacturing, more than make up for that.

  7. Craig Capurso says:

    Elon know how to play the game. nothing like more corporate welfare.

    1. mhpr262 says:

      He couldn’t play the game if politicians elected by the people hadn’t asked him to join the game in the first place.

    2. Someone out there says:

      Elon plays the same game as everyone else. He didn’t make the rules, he just follows/exploits them.

  8. Lad says:

    Nevada has a Republican Governor, Sandoval, who was elected and is sponsored by Koch money. It’s amazing to me he agreed to even allow Tesla into the state, especially when you read about his shenanigans against the solar industry and Solarcity when it comes to net metering:
    http://www.greentechmedia.com/articles/read/Nevada-Regulators-Eliminate-Retail-Rate-Net-Metering-for-New-and-Existing-S

    In the long run, Tesla might have been better off staying in California or picking a state with “green friendly” politicians.

    1. Pushmi-Pullyu says:

      Lad said:

      “In the long run, Tesla might have been better off staying in California or picking a state with ‘green friendly’ politicians.

      California, with its strong pro-union laws, is not an attractive State to set up shop for a company with thousands of blue-collar workers. Nor is it attractive to heavy industries due to strict environmental regulations.

      Tesla brags a lot about “green” manufacturing, but it remains to be seen whether they will deliver on their promise of “net zero carbon emissions” from Gigafactory 1. First of all, this is playing semantic games, and it actually just means Tesla is claiming to, on average, offset the CO2 emissions which would be generated if they used grid electricity instead of solar & wind power. It doesn’t actually mean they can make gigawatt-hours of battery cells without generating any CO2 emissions during the process.

      Second of all, I don’t think it’s at all clear whether this is a firm plan, or just — like Tesla’s talk of making the Supercharger network solar powered — only about 2% reality, and 98% lip service.

  9. Steven says:

    I’m surprised See Through hasn’t weighed in on this yet.

    1. ffbj says:

      See Through has laid down his weapons and retired from the battlefield. I even wrote a poem, “Ode to a Troll,” dedicated to him.

      1. ffbj says:

        I think I will miss ‘His Diaphanousness’. His baffling stubbornness was predictable, but of his flight, I say too soon.

        In the end, it was incumbent upon him to retire from the field, but to all who knew
        or knew of him, it can ‘nere be said that he fled the fight.

        Nei, surrounded by many foes with no ally left standing, he furled his banner, laid weapons down and turned his back on the carnage he had wrought to no purpose.

        Silently he wept, his
        leaden trod carried him forward.
        He moved off slowly, forced from the battle covered with much blood, not all of which was his own…

        A slight smile began to creep from his lips up his face as he paused too look over the misty landscape he now surveyed, which seemed to clear as if by magic, as he turned his piercing gaze upon it.
        ‘Yes, I can see it all clearly now,’ he mused.

        ‘But there is nothing to worry about,
        after-all’, he thought,
        ‘ Trolls regenerate.’
        –From an ‘Ode to a Troll’ by ffbj

        1. Anon says:

          You spent entirely too much time on this. 😉

          1. ffbj says:

            Probably more than it deserved.