The Nevada Governor’s Office of Economic Development (GOED) Board on March 2 approved a $330.3 million tax break, considering Tesla’s plans to invest $3.6 billion to expand Gigafactory Nevada in Storey County.
The GOED Board calculated Tesla’s investment in Giga Nevada could generate an estimated $685 million in net state and local revenues in the next 20 years. Listed below are the taxes Tesla could generate, assuming it invests all $3.6 billion in land, buildings and equipment for Giga Nevada.
- Up to $21.8 million in gross average annual property tax revenues
- $11.2 million in gross average annual sales taxes
- $1.1 million in average annual business license taxes on utilities
- $2.1 million in gross average annual modified business taxes
Tesla is due to pay an annual minimum of $53 million in real and personal property taxes and modified business taxes related to Giga Nevada starting July 1, 2024, and in perpetuity thereafter. The $53 million in taxes was part of Tesla’s first abatement agreement with the state in 2014.
“Tesla has far exceeded every promise they made going back to 2014,” said Gov. Joe Lombardo, who chairs the GOED Board. “To date, they have invested $6.2 billion in Nevada, built a 5.4 million square foot Gigafactory which provided 17,000 local construction jobs and created more than 11,000 highly paid permanent jobs.”
Giga Nevada Expansion Plans
In January, Tesla announced expansion plans for Giga Nevada, including 4 million square feet of new manufacturing footprint, 3,000 new jobs and two new manufacturing facilities.
One of the new facilities is a 100 GWh cell factory dedicated to Tesla’s 4680 battery. The other manufacturing facility will be Tesla’s Semi factory.
Nevada's 4680 Assembly Line
Tesla’s 100 GWh battery cell factory in Nevada is expected to have the capacity to produce enough batteries for 1.5 million light-duty vehicles annually. During a previous TSLA earnings call, Andrew Baglino said some of the 4680 cells made in Nevada will go into Semi trucks.
Tesla CEO Elon Musk hinted the other 4680 cells from Giga Nevada would go to Tesla’s future vehicles equipped with the company’s next-gen platform. During Investor Day 2023, Musk announced Tesla’s upcoming Gigafactory Mexico will produce the first of the company’s next-gen vehicles.
“Since the inception of GOED, the main goal has been to diversify Nevada’s economy,” said Tom Burns, GOED executive director. “The Nevada-Tesla partnership cemented a new economic sector in Nevada for the manufacturing of electric vehicle battery packs and drive units, and energy storage products. Tesla’s Gigafactory propelled Nevada’s manufacturing industry, establishing lithium-ion batteries as the state’s eighth largest export both nationally and internationally."
Abby Andrews