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 ...
Sooo, Tesla is not building a battery factory, the tax payers are. If it was not for green energy credits Tesla would be loosing there ass
I did not mean to panic the citizens of Reno into thinking they had a turtle infestation. Please remain calm, the turtles were only a metaphor for a politically motivated, all powerful EPA.
Exactly, the only thing profitable for Musk so far has been his energy credits.
Thanks again, I had visions of a turtle stampede driving all the citizens into Donner Pass.
No, the government of Nevada is waiting to latch on to the jugular of the business until the business is healthy enough to host the parasite.
Bingo!
A facility of this size will need supporting infrastructure; large water mains and sewers, roads and bridges for high weight limits,stormwater management (in Nevada?), special fire equipment...
All needed in the near-term.
And do not forget the interest on the bonds (tax free) to pay for all the improvements.
The whole electric car fad is a giant bubble.
I couldn’t agree more.
What is this? Of course there a difference between stealing and working for money. If a business is not paying taxes, they’re NOT STEALING From tax payers.
Tesla’s initial public offering of common stock was at $17 per share. Today Tesla stock closed at $277.30. Someone who bought 100 shares in 2010 for $1,700 can sell that hundred shares today for $27,730 before capital gains.
The Republican Governor of Nevada, Brian Sandoval who negotiated this deal with Elon Musk of Tesla says he expects Nevada will realize $100 billion in revenue.
http://www.latimes.com/topic/business/manufacturing-engineering/automotive-equipment/tesla-motors-inc.-ORCRP006147-topic.html
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