​What You Need To Know About Tesla's Nevada Gigafactory

Elon Musk joined Nevada Governor Brian Sandoval in Carson City to announce the selection of Nevada as the official site for the Tesla Gigafactory. At over 5 million square-feet, the massive diamond-shaped battery plant will be one of the largest in the world, and Tesla is getting $1.2 billion in tax breaks over 20 years.

"The Gigafactory is an important step in advancing the cause of sustainable transportation and will enable the mass production of compelling electric vehicles for decades to come," Musk said in a statement. "Together with Panasonic and other partners, we look forward to realizing the full potential of this project."

Tesla pitted five states against one another in a bid for the factory, and Nevada came out on top with the right combination of incentives and tax abatement to draw the automaker to the state.

The factory is set to cost around $5 billion to build, will employ 3,000 construction workers initially, 6,500 manufacturing jobs, and bring another 16,000 indirect jobs to the State once the Gigafactory is up and running by 2020. The plant has been designed to run exclusively on renewable energy, with solar panels lining the roof, along with wind and geothermal power.

The economic impact over the next 20 years is pegged at $100 billion, and Tesla has pledged to make $37.5 million in direct contributions to K-12 education beginning in August 2018, along with a $1 million grant to fund advanced battery research.

Tax credits include $12,500 per permanent full-time job up to 6,000 employees, a transferrable tax credit of 5 percent of the first $1 billion of investment and another 2.8 percent for the next $2.5 billion.

The tax abatements are as follows:

  • 100% sales tax until June 30, 2034
  • 100% of real property tax until June 30, 2024
  • 100% of personal property tax until June 30, 2024
  • 100% of modified business tax until June 30, 2024

As well as the fiscal projection after abatements of:

  • $430 million in general fund revenue over 20 years
  • $950 mil in local government revenue over 20 years
  • $500 mil in K-12 education over 20 years

For a total of $1.9 billion in total fiscal impact to the state. Nevada also gutted its film tax credit to give to Tesla, cutting it from $80 million to $10 million.

There's also this interesting line in the docs handed out to press regarding direct sales:

Clarify that manufacturers that exclusively produce electric passenger vehicles and have not engaged in a franchise with a dealer in the State may engage in retail sales of those vehicles.

Finally, five bills need to pass the Nevada legislature to make the Gigafactory a reality, and there's a snowball's chance that all five won't pass with ease.

TL;DR: Tesla will give money to schools, gets a nine-figure tax break, and just got a big step closer to supplying batteries for its $35,000 Model 3 EV.