Tesla Motors Inc (NASDAQ:TSLA) had a breakthrough in its quest to set up a $5 billion mega factory in Nevada after the Governor of the State signed a $1.3 billion tax break to be spread over 20 years. A total of four bills were passed in both houses to call for the Governor’s pen.
The bills were passed unanimously in both chambers with bigger portion of the deals sailing through on the second day of a special session called by Governor Brian Sandoval. The approval gives Tesla Motors Inc (NASDAQ:TSLA) a clean bill to set up the proposed lithium-ion battery plant, 20 miles east of Reno in an industrial park.
The electric car manufacturer will be freed of some tax credits for insurance companies that amount to $125 million for 5 years beginning 2016. There will also be sales tax exemptions that are estimated to be around $725 million through to 2034. The company will also be freed of payroll and other taxes amounting to $300 million.
Tesla Motors Inc (NASDAQ:TSLA) will have to employ at least half of its workers from Nevada State inhabitants; this is according to the third bill. The motor company will also have to spend up to $3.5 billion in Nevada within the first 10 years of the project on equipment and real estate. The State will build a road at an estimated $43 million that connects I-80 and U.S. 50 to make the factory easily accessible.
Tesla Motors Inc (NASDAQ:TSLA), through the factory, is expected to create more than 20,000 manufacturing jobs in the State. This will be a big boost to the Nevada economy, which majorly depends on tourism. According to the AP, the project is also expected to earn the economy to a tune of $100 billion over the next 20 years.
“The Legislature has confirmed that this package is indeed in the best interest of our citizens and is good for Nevada,”
Mr. Sandoval said in a statement.
This article has been written by Victor Ochieng.