RENO, Nev. — Tesla could receive more than $300 million in tax breaks over the next two decades for a major new facility expansion in northern Nevada, the product of a 2014 deal when it first the company arrived in the area with the promise of new jobs and large investments in the area.
The long-awaited amount — kept quiet for a month because of a nondisclosure agreement with state officials — will be voted on Thursday by the Nevada Governor’s Office of Economic Development. Tesla projects it will bring 3,000 jobs at an average rate of $33.49 an hour and invest $3.6 billion in the economy. It covers health insurance for 91% of its employees, per its application.
Many attribute Tesla’s presence in northern Nevada to both economic diversity and rapidly rising housing costs.
Combined with a 2014 investment and expansion project in which the company received more than $1 billion in tax credits, Tesla is slated for more than $10 billion in capital investments in northern Nevada between 2014 and 2028, called director of the economic development board Tom Burns “ground zero for. the energy transition” in a release on Monday. The company projects more than $750 million in direct and indirect tax revenue from proposed tax breaks and those approved in 2014.
“On behalf of Tesla and the 7,000+ team members in Nevada, we are grateful to you and your team for your partnership on this critical project,” Chris Reilly, Tesla’s director of workforce and recruiting, wrote to Burns on Thursday.
The company could also be billed for up to $80 million in sales and use taxes over two decades, which is not part of the $330 million in already amortized taxes.
In recent weeks, however, the proposed tax cuts have been the subject of scrutiny from some lawmakers in Nevada’s Democratic-controlled legislature, with some questioning the authority the board should have over so much. investments and asked to delay the vote on Thursday to provide. more time for public comment.
Concerns have arisen over the lack of oversight for an unelected board to provide such large tax breaks, as well as some Tesla employees being on Medicaid, despite average hourly wages. much higher than qualifying income. Some Democratic lawmakers have asked for Thursday’s meeting to be postponed, though it appears to be on schedule.
Tesla, run by billionaire CEO Elon Musk, aims to build more semitrucks and produce enough cell batteries for 2 million light-duty vehicles each year in Nevada.
Nevada Gov. Joe Lombardo announced the expansion in January, which will take advantage of an existing operation in the Tahoe Reno Industrial Center, about 20 miles (32 kilometers) east of Reno-Sparks. The plan brings the company one step closer to achieving its previously announced plans to increase production of fully electric Tesla Semi vehicles, to produce 50,000 trucks in North America by 2024.
President Joe Biden’s administration has pointed to the Nevada factory expansion as evidence of a continuing “manufacturing boom” since he took office two years ago.
In a letter to Lombardo and Burns from rural Storey County, where Tesla’s factory is located, three county commissioners praised the economic growth the company has brought to northern Nevada while raising concerns about the number of personnel and resources necessary to support such a facility, including fire and EMS, law enforcement, infrastructure and personnel. The county took most of the hit from the original 10-year tax abatement plan, and the county will need more tax revenue to help support the expansion, they said. Commissioners requested that county officials participate in the March 2 meeting.
“However, Storey County is ready to accept and respond to the needs of a second Gigafactory and will continue to have a positive working relationship with the Tesla team,” the commissioners wrote.
Tesla’s presence is one of several in northern Nevada intended to accelerate the US transition to green energy. Earlier this month, a Nevada-based battery recycling plant used for electric vehicle batteries won a $2 billion green energy loan from the Biden administration’s Redwood Materials, founded by a former Tesla executive, also received $105 million in state tax breaks on a promise to expand. its operations in the region and help the US build its own electricity supply chain.
“This region is leading the way in a broader story of what’s happening in the country,” US Energy Secretary Jennifer Granholm said while announcing the loan.
Stern is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms. Follow him on Twitter: @gabestern326.