Electric vehicle manufacturer Tesla (TSLA) could receive $330 million in tax abatements from Nevada if lawmakers approve a tax abatement for a new expansion at its current Gigafactory.
Billionaire Tesla CEO Elon Musk plans to manufacture semitrucks and cell batteries for at least two million light-duty vehicles each year after the expansion at its current Nevada plant is complete.
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The Nevada factory expansion would enable Tesla to increase production of its electric Tesla semi trucks to 50,000 in 2024. Tesla currently has a plant at the Tahoe Reno Industrial Center that is east of Reno-Sparks.
Tesla could receive an additional $80 million in sales and use taxes during the next two decades.
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Tax Abatement Vote Coming
The Nevada Governor’s Office of Economic Development is expected to vote on the proposed tax abatements on March 2 while politicians have criticized the funding and its impact to local services such as infrastructure, housing and schools.
Tesla has estimated an expansion and the subsequent manufacturing of the Tesla semitruck would generate 3,000 jobs and $3.6 billion into the local economy due to hourly workers being paid $33.49 an hour. Only 91% of its employees will receive health insurance.
Tesla could receive a total of $10 billion in capital investments between 2014 and 2028 for its Nevada plant. The EV company already received $1 billion in tax breaks for investing in the plant in 2014 and its expansion.
Tom Burns, director of the economic development board, said the expansion is “ground zero for the energy transition” in a statement.
Tesla estimated it would produce $750 million in direct and indirect tax revenue from the tax breaks approved in 2014 and the proposed abatements.
Lawmakers have questioned the ability of the economic development board to approve large investments and sought to delay the March 2 vote to allow the public to comment on the proposed tax breaks.
Senate Revenue and Economic Development Committee Chair Dina Neal, D-North Las Vegas, is seeking a delay on the vote.
“As I said last week, allowing only three days for the public to review what we now know to be $330 million in corporate tax breaks and abatements is insufficient,” she said in a statement. “There is little to no opportunity to explore how this deal may affect housing supply, public schools, public safety, and other vital government services in the region.”
Brian Sandoval, president of the University of Nevada, Reno wrote a letter supporting the expansion. He was governor in 2014 when he approved the $1.3 billion abatement deal.
Tesla Investor Day Prompts Speculation
The EV maker is holding a much-awaited investor day on March 1. The Model 2, a cheaper low-cost vehicle could be released, experts speculate.
The EV manufacturer has not produced a new vehicle since 2019 despite promises to launch and produce the Cybertruck.
For the moment there is only one certainty he will unveil Volume 3 of Tesla's Master Plan that day. The Master plan is the mission that Musk assigned to Tesla, that of transforming transportation and saving the planet from dying from pollution.
The rest is speculation fueled by the billionaire himself. For example, in recent weeks he has disseminated various pieces of information about the highly anticipated Cybertruck, Tesla's very first pickup truck with a futuristic design, suggesting that he will unveil the model promised for mass production this March 1.
