CARSON CITY, Nev. – Gov. Brian Sandoval announced Thursday that Tesla Motors will build a massive battery factory in the state as long as legislators approve tax breaks and other incentives worth up to $1.3 billion over 20 years.
Sandoval revealed terms of the deal he negotiated with the electric car company at a Capitol news conference attended by Tesla CEO Elon Musk. The governor called it a “monumental announcement that will change Nevada forever.”
Sandoval later said that for every dollar Nevada gives up, the project will produce $80 in economic impact.
“Even the most skeptical economist would conclude that this is a strong return (on investment) for us,” Sandoval said.
Musk said Nevada didn’t offer the biggest incentive package among the five states that tried to lure the factory, though he didn’t specify which did among California, Texas, Arizona, New Mexico and Nevada.
The most important considerations were not incentives, he said, but rather a high confidence that the factory will be ready by 2017, followed by assurances that batteries can be produced cost-effectively.
The governor will call a special legislative session as early as Wednesday to approve the package.
Its ultimate cost to taxpayers depends on how much economic activity the factory generates. On the low end, it could be worth $865 million, according to Steve Hill, executive director of Sandoval’s Office of Economic Development.
Hill projected that the factory would generate $100 billion for Nevada’s economy and directly or indirectly create 22,000 jobs over two decades.
That includes an estimated 6,500 permanent jobs at the factory and a peak of 3,000 construction jobs leading up to the opening of the $5 billion plant in 2017.
Tesla’s choice of Nevada takes it a big step closer to mass producing an electric car that costs around $35,000 and can go 200 miles on a single charge. That range is critical because it lets people take most daily trips without recharging, a major barrier to the widespread adoption of electric vehicles.
The “gigafactory,” as Tesla calls the project, would bring down the cost of batteries by producing them on a huge scale. The facility would comprise approximately 10 million square feet, equivalent to about 174 football fields, and be located at an industrial park near the Reno suburb of Sparks.
The package Nevada offered includes tax breaks worth an estimated $675 million to $1.1 billion. Hill estimated the project would generate approximately $1.9 billion in tax revenue for all levels of government – state, local and school districts – over 20 years.