GigaNevada Expansion
Tesla is getting ready to move ahead with their surprise expansion of their Gigafactory in Nevada, as the local government has officially granted approval for a $330 million USD tax break to support that work.
On February 27th, Tesla revealed details of an upgrade to the Nevada facility which would include two new manufacturing facilities - one for the Tesla Semi hauler, and one to produce the company’s very important 4680 battery.
In return, Tesla will be getting a tax break that will be funnelling $330 million USD over the course of the next 20 years. It will come in the form of some very handy incentives, like not having to pay taxes on their Nevada property for the next decade, not being required to pay the local taxes on employee wages, and a reduction in sales taxes for the entire 20 year duration.
But Telsa isn’t getting this break for free.
In return for these incentives, Tesla has to commit to creating 3000 jobs at the facility which will pay an average of $33.94 USD per hour. They will also have to build a childcare facility for their employees, complete with a shuttle service to get to and from the factory - something Tesla already does in other facilities.
This expansion and the required commitment to hiring and building the childcare facility will represent a more than $3.6 billion dollar investment by Tesla - while this tax break will reportedly add up to about $1 billion dollars in total spent by the Nevada government on helping Tesla develop the site since talks began back in 2014.
This isn’t overly surprising news - at least in terms of the conditions for the tax break. The Nevada government obviously wants to keep supporting the Gigafactory, as it generates a decent amount of revenue for the state.
What is surprising is the suddenness of the announcement. The details were sealed under an NDA until Tesla unveiled them at the end of February, but usually there’s some small leak or something leading up to this sort of announcement - so good on Tesla for keeping this under wraps.
To be fair there is a lot currently going on in the Tesla ecosystem right now; but during the Investor Day event on March 1st, CEO Elon Musk was very clear that production was going to be ramping up across all of the company’s facilities this year - so this deal was likely in the works for a couple of months alongside the new GigaMexico announcement.