Tesla and Nevada agree on $1.3bn Gigafactory incentives
Nevada State officials have agreed to a final incentive deal for Tesla’s gigafactory worth $1.3 billion. The agreement allows Tesla  to apply for refunds for certain local tax payments, with the Nevada Governor’s Office of Economic Development saying the company’s first refund application covers sales and taxes paid from Oct. 17 to Dec. 17. One of the state’s stipulations in the agreement says Tesla must employ at least half its construction workers from Nevada, and so far around 73% of the workers hired at the site are Nevada residents.
Jason Hidalgo

jhidalgo@rgj.com

Tesla Motors can start applying for refunds on gigafactory taxes after the state of Nevada finalized its $1.3 billion incentive agreement with the company in the second quarter.

The agreement allows Tesla to submit refund claims on local sales and use taxes collected for the gigafactory. The company's first refund application covers the taxes collected between Oct. 17 and Dec. 17 last year, according to the Nevada Governor's' Office of Economic Development.

Tesla also started negotiations with utility company NV Energy as well as the Nevada Public Utilities Commission concerning electric rate incentives for the gigafactory. The project is eligible for a discount on its Base Tariff Energy Rate (BTER) as part of an economic development rate rider authorized by the Nevada Legislature.

Tesla continues to satisfy the terms of its agreement with the state in order to receive incentives, GOED said. These include investment and employment benchmarks that the company must meet while it builds its $5 billion lithium-ion battery plant just east of Reno-Sparks.

Total investment by Tesla on the project that Tesla CEO Elon Musk calls Gigafactory 1 during the second quarter grew by 28 percent from the previous quarter to $183 million, GOED confirmed. Investment by Tesla partner Panasonic Electronics North America, which is expected to send hundreds of employees to help prepare for production, grew nearly fourfold on a quarterly basis to $2.8 million.

Non-construction jobs at the gigafactory also tripled from the previous quarter to 36 qualified employees, comprising of 31 Tesla employees and 5 Panasonic workers. Wages paid to the qualified employees during the second quarter totaled $1.4 million.

Construction continues to account for the bulk of employment at the site so far. There were 721 construction workers at the site during the second quarter, bringing total construction employment to date to 1,465, according to GOED. Of those, 73 percent come from Nevada, surpassing the 50 percent requirement set by the state as part of Tesla's incentive agreement.

In projections initially submitted to the state, Tesla expects to employ 6,500 workers at the gigafactory once the project is finished. At the same time, the company continues to make additional moves, including the purchase of more than 1,900 acres of additional land at the Tahoe Reno Industrial Center.

"The purchase gives us the opportunity for future growth," said Tesla Motors spokeswoman Alexis Georgeson.

Tesla is also mum about plans to further expand the gigafactory from its initial 5.5 million square feet. During an earnings call in May, Musk said the company is considering increasing the gigafactory's size by 50 percent to 100 percent.