&gt; They chose to use tax money<p>Non-existent tax money as of now. The way the incentives work, Tesla would have to generate enough business activity (revenues, sales, profits) to accrue that tax liability. It&#x27;s quite possible that business activity will never materialize, the tax liability will fail to accrue, and the incentive won&#x27;t even have a chance to kick in.<p>The state is making a bet that (a) such activity will materialize, (b) once materialized, it will draw such a high amount of ancillary business (suppliers, resellers, distributors, etc.) and residential (property, shopping) activity that it will more than compensate for lost revenue.<p>The bet is not completely uneducated as case studies from the past (mainly around Texas cities attracting Nissan and then Toyota away from Californian cities) suggest that overall it&#x27;s worth it.