Published Monday, Feb. 27, 2023 | 2:34 p.m.
Updated Monday, Feb. 27, 2023 | 4:06 p.m.
Tesla expansion
CARSON CITY — Electric vehicle manufacturer Tesla, Inc., is proposing to invest $3.6 billion to expand its manufacturing plant in Storey County to build a new high-volume semitruck factory as well as a new battery facility capable of producing batteries for more than a million light-duty vehicles annually, according to an application made public today by the Governor’s Office of Economic Development.
In the application, dated Jan. 24, the EV giant headed by billionaire CEO Elon Musk outlined more than $330 million in tax abatements over the next 20 years they say would be needed to complete expansion of its Nevada “Gigafactory.” Tesla is asking primarily for three tax abatements, which are temporary reductions or discounts of tax liability. Those include:
- A lower sales-tax amount, reduced to 5.35% from 7.6% through 2043, worth approximately $66.6 million
- A 100% abatement in the modified business tax over the next 10 years, worth roughly $17.5 million
- Waivers to all personal and real property taxes, saving the company $246 million over the next 10 years.
A special GOED meeting is scheduled for 10 a.m. Thursday, where the 12-member panel headed by Gov. Joe Lombardo will ultimately vote on the proposal. Lombardo, a first-term Republican, during his State of the State address announced Tesla’s plan to pursue its new expansion. Under a 2011 law creating GOED, the body was given the authority to broker any tax breaks with companies.
“Economic development matters,” Lombardo said in his Jan. 23 speech to lawmakers. “I’m proud to declare that Nevada is back open for business, effective immediately.”
Once completed, the Gigafactory expansion is expected to create 3,000 new permanent jobs with an average wage of $33.49 per hour, according to Tesla’s application. That’s on top of an additional 3,655 jobs expected to be created elsewhere in Nevada between 2023 and 2042, and an additional 15,133 construction jobs expected to be created now through 2027.
The application added that Tesla will pay 91% of health insurance benefits to each new employee, and other benefits like paid leave, paid disability, free mental health services, parental and adoption leave and 401k matching. If approved, the Nevada Gigafactory’s workforce would be expected to top 10,000 once the expansion is completed.
Economic output from the expansion is expected to rise above $38 billion by 2042 and nearly $2.2 billion annually, according to the application. Additionally, the expansion could also create more than $766 in new tax revenue for state and local governments through the next 20 years.
If approved, the company intends to break ground in May, with estimated completion in May 2026 for the 4 million-square-foot expansion. Under the new expansion, Tesla would be able to produce more than 1.5 million vehicle batteries annually, including for the Tesla Semi, which the company boasts can travel 500 miles on a single charge.
In 2014, Tesla made a similar $3.5 billion investment to break ground on its Nevada Gigafactory, a 5.4 million-square-foot facility with enough capacity to manufacture about 500,000 electric vehicle batteries each year. The company was then given more than $1 billion in abatements, that included hundreds of millions in transferable tax credits.
This month, state Sen. Dina Neal, D-North Las Vegas, chair of the Senate Revenue and Economic Development Committee called on GOED to delay Thursday’s vote on the Gigafactory abatements, arguing that three days of public review for more than $330 million in incentives is simply not enough time to review the application with fiscal responsibility.
She also criticized the deal for being protected under a nondisclosure agreement that was ultimately lifted today. In a statement Monday, she again criticized the nature of the tax deal and promised to introduce legislation that would put GOED under increased oversight.
“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,” Neal said in the statement. “There is little to no opportunity to explore how this deal may affect housing supply, public schools, public safety, and other vital government sources.”
Neal continued: “I am renewing my call for the Governor’s Office of Economic Development to delay final consideration of these abatements for one month to give the public time to weigh in on the deal. … I will continue to work toward more legislative oversight and transparency around these deals in the future.”
Tesla chose Northern Nevada over Austin, Texas, and “multiple” locations in California, according to the application.
