Tesla Motors Inc (NASDAQ:TSLA) Backs Down on $500M Demand of State Money for Gigafactory, State Incentive Plan Prevails

Tesla Motors Inc (NASDAQ:TSLA) demanded an amount of $500 million in lieu of tax breaks from Nevada to build Gigafactory, its planned massive battery plant, in the state. The electric car manufacturer have been in negotiations with states such as New Mexico, Arizona, Texas, California, Oregon, and Washington, who were all competing with one another to land the company’s huge battery factory project which is envisioned to provide about 6,500 direct jobs at the outset and generate in a period of 20 years 22,000 more jobs that includes indirect employment as an after effect, as well as infuse an estimated amount of $100 billion to the local economy.

Tesla Motor (TSLA)

In a detailed report by Fortune, Nevada Governor Brian Sandoval have already briefed in July the state’s legislative leaders regarding a 20 year incentive package for Tesla Motors Inc (NASDAQ:TSLA) focused on 100% tax exemption on condition of specific levels of investment and job creation, when Tesla CEO Elon Musk suddenly called the deal off. Instead of tax abatements, Tesla  wanted $500 million in cash instead, which the state can’t afford, with its full budget of only $6.5 billion. Other states contending for the project are not willing to part with that amount either, and the car maker have again resumed negotiations with the Silver State.

Finally, in September, Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk and Nevada Governor Brian Sandoval announced Nevada as Gigafactory’s official site. The state has come up with the following incentives for Tesla Motors Inc (NASDAQ:TSLA) amounting to $1.1 billion: 20 years tax exemption on construction materials and equipment, amounting to $725.8; 10 years property tax exemption amounting to $349 million; 10 years exemption on payroll tax amounting to $29.4 million, and an amount of $8 million in electricity discounts.

This article has been written by Nonito Guntan.

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