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Inside Nevada’s $1.3 Billion Gamble on Tesla

The muddy math that’s turning the state into a manufacturing destination.


In June of 2014, Texas Governor Rick Perry pulled into Sacramento behind the wheel of a Tesla Model S. Unseasonably dressed in a black jacket, Perry was in California for fundraising, but nonetheless took time to address reporters in front of a local hotel. He told them that he enjoyed driving a Tesla, the Los Angeles Times wrote, and would happily make one addition: “A made-in-Texas bumper sticker.”

Tesla had been shopping for a site to place its Gigafactory, promising to create thousands of jobs wherever the massive battery plant landed. But the company, and CEO Elon Musk, wouldn’t go just anywhere. Tesla bargained its way through lucrative deals, asking local governments for millions in tax incentives to grease the company’s wheels.

Nevada ultimately won the factory deal, but at a cost that has proven controversial: The state offered an incentives package that was the largest in Nevada history and became one of the 15 largest nationally. Over the next 20 years, Tesla could take in nearly $1.3 billion in tax benefits for building its Gigafactory in Nevada, according to projections from the state, as hires are made for the factory locally and from around the country. Assuming Tesla meets its obligations under the deal, it will spend 20 years free from sales tax and 10 years free from property tax, while it receives millions of dollars more in tax credits.

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