CEO Elon Musk announced in spring that Tesla is taking the rare step of spending millions as a preparation for new sites in two or three states before choosing the final state. In summer, Musk added that the winning state would commit 10 percent of total the cost which could translate to a minimum bid of $500 million.
Most of the details are still unclear as only one site has been identified as a potential location. It's a desert outside Reno, Nevada. The other sites remain a mystery, perhaps it is because Tesla has asked the states to remain silent on their offers.
The upcoming factory will definitely bring something that every state desires but a little rare for them to achieve these days. A new factory would mean a new opportunity of creating thousands of good-paying factory jobs and residual economic benefits that the jobs can bring.
Five states were shortlisted for the new $5 billion battery factory of Tesla. Apart from Nevada which was mentioned earlier, the other states are California, Texas, Arizona and New Mexico. So far, officials in each state are keeping the specifics of the offers confidential.
While it may be true that each state has something unique to offer, there is at least one aspect that makes one state more appealing than the others. First in the list is Nevada which has few taxes. The non-existent taxes would include corporate shares, inheritance or gift, estate, franchise, and income. The implementation of the corporate income tax shall be decided after the voting in November.
California offers a hiring credit of 35 percent of wages if Tesla builds the factory in a region known to have high unemployment and poverty. This offer shall be in effect until 2029.
Texas has the Texas Enterprise Fund that regularly gives incentives to companies which could be worth tens of millions of dollars for opening facilities in the state. The Texas Emerging Technology Fund has already given $205 million in funding, a huge number of technology startups.
Arizona offers waived sales taxes for machinery or equipment that will be used in manufacturing. It is also applicable to the electricity or natural gas used for businesses that are inclined in manufacturing.
New Mexico has the so-called "closing fund." The local governments can tap public money in order to finance various projects such as roads, infrastructure improvements, and utilities needed around a factory. Record shows that the Legislature provided $15 million worth of fund for the current fiscal year.
The new factory is aimed at making cheaper batteries for Tesla's new Model 3. It is the company's mass-market electric car that Tesla hopes to sell at around $35,000 by 2017. Its current model, Model S, retails at $70,000.
