Tesla lands another tax break to locate Cybertruck factory in Texas – ProWellTech
Texas lawmakers just gave Tesla and his CEO Elon Musk has another incentive to locate his next factory there.
Commissioners in Travis County, home of Austin and the eventual upcoming Tesla factory, approved tax breaks worth at least $ 14 million over 10 years on Tuesday. The incentives exceed $ 46.6 million in property tax abatement that the District council of the Del Valle school approved earlier this month.
The news of the approval pushed Tesla shares up to 3.5% in after-hour trading.
The deal, which Austin Statesman first reported, is the last carrot dangled in front of Tesla in hopes of landing the carmaker’s next factory, which is slated to assemble the all-electric Cybertruck and Model Y to the east coast market.
There are, of course, conditions for such an agreement.
Under the agreement with Travis County, Tesla must invest $ 1.1 billion in the new factory within the first five years. In return, Travis County will refund 70% of the property taxes Tesla will pay. Once Tesla’s investment in the factory has exceeded $ 1.1 billion, property tax rebates will increase to 75%. Any investment in the factory over $ 2 billion will give Tesla 80% of property tax rebates.
Travis County estimated that a $ 1.1 billion investment by Tesla would generate $ 8.8 million in new tax revenue over a 10-year period, a figure that takes into account property tax relief.
If Tesla fails to meet the investment target or if it does not meet 75% of the job requirements in a year, the company will not receive any tax relief on the property. The county will also have the option to recover tax relief if Tesla violates his contract.
The incentive packages were quickly approved, illustrating the thirst of local governments to find ways to create new jobs, a point that Tesla is deeply aware of. The company indicated unemployment statistics in Travis County as part of its presentation, which dropped to over 12% in April from 2.2% a year earlier.
Musk tweeted in March that the company was “exploring” locations to build a new American gigafactory that would produce the Cybertruck and Model Y crossover.
Initially, Tesla was observing Nashville, but the focus quickly shifted to a location east of Austin and on land in Tulsa, Oklahoma. Lawmakers in Oklahoma have offered their incentive package, although the details of what the state is offering have not been made public.
Tesla has promised Texas officials that he will employ at least 5,000 people. About 25 of these workers are classified as “qualifying” jobs and a minimum of $ 74,050 would be paid, while the remaining would be middle-income jobs with an annual salary of $ 47,147.
If the approval process of the Tesla factories in Nevada and New York is a guide, it is likely that state incentives are also. For example, the company may apply for a taxpayer-funded grant from the Texas Enterprise Fund. There are other beneficial benefits that Texas could offer Tesla, such as allowing the automaker to sell directly to consumers, a state-banned method.