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July 24, 2017

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What you need to know today about Nevada’s deal with Tesla


Cathleen Allison / AP

Tesla Motors CEO Elon Musk speaks at a press conference after Nevada was chosen as the new site for a $5 billion car battery gigafactory, which will be built east of Reno. Several hundred people attended the media event at the Capitol in Carson City, Nev., on Thursday, Sept. 4, 2014. (AP Photo/Cathleen Allison)

It’s one of the largest tax-breaks-for-your-business deals in history.

Gov. Brian Sandoval announced Thursday that Nevada had struck a deal with the high-end electric car marker, Tesla, which will build a massive lithium ion battery factory outside Reno. The price tag? $1.3 billion in tax breaks over two decades for the auto maker.

The news moved fast yesterday. Here’s everything you need to know about it.

The tax incentives package is massive

Nevada was always the heavy favorite to land the factory, for reasons outlined in this piece by Forbes contributor Mark Rogowsky.

So Gov. Sandoval’s announcement on the deal wasn’t as much of a surprise as what he left out of his press conference: The price tag. It’s more than double what Tesla’s CEO Elon Musk maintained a state needed to give the car company.

As the Sun’s Ryan Frank points out, using data from a watchdog group Good Jobs, Nevada’s deal with Tesla is the 10th largest such in history, and could climb even higher if Tesla takes advantage of all the incentives.

Scroll to the bottom of this Reno Gazette-Journal story, and you’ll find a breakdown of the numbers in the deal.

The state legislature still needs to approve the deal. They’re expected to meet in a special session on Wednesday, at the cost of $25,000 to $40,000.

What Nevada gets out of the deal

You’ve got to play to win, say Nevada’s officials and lawmakers who support the deal.

“We’re going to do our best to make sure we make them look smart for coming here,” said Rep. Mark Amodei, a Northern Nevada Republican, on CNBC Thursday morning.

And Nevada will win out, according to the governor's economic development team, which calculated Tesla’s economic impact could reach $1.9 billion.

Tesla's plant is expected to produce about 6,500 jobs. But how will those jobs break down among the assembly line, engineers and executives? And will they be filled by Nevada residents or by California migrants?

One expert suggested the jobs would split into three types: Manufacturing workers with a high school education, middle managers/manufacturing professionals and high-end executive and accounting positions, as the Reno Gazette-Journal reported in June.

At this early stage, Storey County and Tesla rank among the deal’s biggest winners, while insurance companies, film productions and car dealerships are some of the losers, writes the Reno Gazette-Journal.

There’s been some grumblings already from the right and the left on the merits of the deal, especially at a time when Nevada’s schools are struggling.

“Why would lawmakers want to take from poor and middle-class families to subsidize a billionaire making cars for millionaires?” asks of the right-leaning Nevada Policy Research Institute in the Reno Gazette-Journal.

How the deal was announced

If you missed the much-ballyhooed press conference in Carson City — and are into that sort of thing — scroll through veteran political journalist Jon Ralston’s Twitter feed, who live tweeted it all.

The Reno Gazette-Journal also has video highlights from the press conference and raw video of journalists swarming Musk afterward, which is kind of fun.

Despite the shockingly high price tag, the way the Tesla deal unfolded was transparent compared to Nevada’s wooing of Apple to build a data center near Reno, reports Anjeanette Damon (now with the Reno Gazette-Journal) in 2012 in the Sun.

Who is Elon Musk?

Speaking of Musk, he’s now arguably one of the most powerful men in Nevada. So what’s his connection to the state, anyway? The Reno Gazette-Journal ties him to Burning Man. (Notice a theme, here? The Reno Gazette-Journal has done an excellent job covering the Tesla deal.)

Here’s a 2013 Ted Talk with Musk, who is also the founder of PayPal and SpaceX.

While he’s having his day here in Nevada, Musk, however, is not very popular in Tesla’s home state of California. The Sacramento Bee has an editorial out today “Elon Musk jilts California.” And the timing couldn’t have been worse for the state’s Democratic governor, Jerry Brown, whose Republican challenger blasted Brown over Tesla on Thursday in the only debate of his reelection bid.

Only in Nevada

One final note from yesterday: Standing amidst the coiffed politicians in Carson City was brothel owner Lance Gilman, who the Reno Gazette-Journal reports played a big role in getting Tesla to Northern Nevada.

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