Tesla lands at least $14.7 million in tax breaks to locate Cybertruck factory in Texas
Officials in Austin have approved a total of at least $60 million in property tax rebates in an effort to bring Tesla’s next electric car factory to the Texas city.
Austin is one of the two leading candidates for the factory, which is where Tesla will build the Cybertruck, along with Tulsa, Oklahoma.
Travis County Commissioner’s Court, the policy-making and administrative arm of the local government, approved an agreement on Tuesday that will save Tesla around $14 million in property taxes over the next 10 years.
Late last week, the Del Valle school district, which is near where the factory would be located, approved an agreement that would grant Tesla close to $50 million in tax rebates over the same time frame.
The vote was preceded by some drama over whether Tesla could wait any longer for an answer on the incentive package. Many citizens who called into Tuesday’s Travis County meeting stressed that they believe time is of the essence — especially after Musk visited Tulsa, Oklahoma on July 3rd and reports detailing the state’s behind-the-scenes efforts to offer its own incentive package.
“We have to vote today,” one resident said. “Time kills deals, and the longer this drags on the bigger the chance that another state puts together a package” that sways Tesla. “It is very important in my opinion that we get this done quickly, and delay tactics tend to scare me,” another said. Just before the vote, county commissioner Margaret Gomez said she had only read through half of the contract and asked for a one-week extension.
Travis County has estimated that a $1.1 billion investment by Tesla would generated $8.8 million in new tax revenue over a 10-year period, a figure that takes into account the property tax rebates.
If Tesla fails to hit the investment goal or if its falls 75% short of its jobs requirement in any year, the company won’t receive any property tax relief. The county will also have the ability to recoup tax rebates if Tesla breaches its contract.
Musk tweeted in March that the company was “scouting” locations to build a new U.S. gigafactory that will produce the Cybertruck and Model Y crossover.
Tesla has promised Texas officials it will employ at least 5,000 people. About 25 of those workers are categorized as “qualifying” jobs and would be paid a minimum of $74,050, while the remaining would be middle income jobs with an annual salary of $47,147.
More recently, Tesla successfully built a car plant in Shanghai in under a year, with $1.6 billion in loans and other assistance from the Chinese government.