Posted on 09/04/2014 11:15:35 AM PDT by jazusamo
Nevada looks to be the winner for Tesla Motors’ (TSLA) new $5 billion battery factory, but the win comes at a cost for state taxpayers.
Tesla is seeking up to $3 billion in new tax breaks to help fund about half of its cost for the new battery factory, which Tesla has already disclosed in regulatory filings would be located outside Reno, Nev., about 235 miles from its auto assembly plant in the San Francisco Bay area.
“The total capital expenditures associated with the gigafactory through 2020 are expected to be $4-5 billion (sic), of which approximately $2 billion is expected to come from Tesla,” the company said in its latest regulatory filings.
Although news reports indicate the breaks could amount to $400 million annually, it may be more like $600 million. Nevada beat out California, Texas, New Mexico, and Arizona for the new $5 billion battery plant, which is expected to create 6,500 jobs, plus generate economic growth. State legislators are likely betting this growth will offset the costs of the tax breaks.
Tesla needs that $600 million a year through 2020, when its battery factory is expected to be fully operational, because it’s experiencing significant cash burn. It has $2.6 billion in cash versus $4 billion in liabilities. Tesla has also disclosed its overhead costs are now rising 20% on a year-over-year basis, and research and development expenses are increasing 30%. Capital expenditures continue to bear down as Tesla expands the number of factories and charging stations (the count for the latter now stands at 183 globally).
(Excerpt) Read more at foxbusiness.com ...
Musk probably needs all the ranchers and turtles kicked off the land he wants to use too. Harry Reid will get right on that.
No more government favoritism. All corporations should have a level playing field
Money which the tax man doesn’t collect is not a “cost.” If you get bent out of shape over this, you should see what California does for the film industry.
Once again, “alternative energy” is shown to be simply a way to convert tax money into rewards for Friends of Government.
So, about $50,000 per car?
crazy
You get a tax break just by being in state like Nevada which has no state income tax.
Unsustainable, rent seeking... could be the next Solyndra
More tax breaks for all!
Yep, and California is broke.
I was looking for a tie-in as well. But I think the Bundy grazing land was needed for an offset for a solar energy deal with China which Harry Reid’s son, Rory?, was going to get a big commission for putting the deal together.
I think the deal fell through but that was why Harry was so hot and bothered about getting Bundy off the land.
So you have no problem with government picking winners and losers? Let us say Ford gets a tax hike while politicians decide GM should be tax free for 20 years.
You would have the same stance?
Of course it does.
Are either of those really an issue at the Reno Tahoe Industrial Center?
http://news.yahoo.com/ap-source-tesla-selects-nevada-battery-plant-200941469.html
Tahoe Reno Industrial Center (TRIC) is a massive 107,000 acre park that encompasses a developable 30,000 acre industrial complex with pre-approved industrial and manufacturing uses.
Tax, regulatory, and statutory incentives for large new business ventures are just part and parcel of how states compete with each other. Alabama is right-to-work while Massachusetts is not, so Alabama gets the new missile factory and its 300 jobs, for example.
We’re not talking about “tax free for 20 years,” we’re talking about incentives to clear the way for a new business to be built in Nevada to employ thousands of people and generate an entirely new tax and economic base. It’s the government equivalent of “free samples” from the corner drug pusher.
every business should get the same deal and the same treatment
Agreed...The subsidies and tax breaks won’t last forever and his cars are out of sight price wise for the average person.
Uncle sugar won’t keep footing the bill.
taxpayers should not be footing the bill for stuff like this, or for stadiums either.
Employees = 6,500
Tax Costs Per Employee = $3,000,000,000/6500 ~= $460,000 per worker
Tax Breaks for 6 years till 2020 so Tax Costs Per Employee Per year = $460,000/6 ~= %76,700
What a rip off. If this goes through bend over tax payers of NV Elon is coming after you.
Every business does not bring in the quantity of jobs and associated business this deal would bring to the area.
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