Tesla Motors Inc (NASDAQ:TSLA) had richer incentive packages on the table from some of the other states in the running to be the site of their planned $5 billion Gigafactory. But as Elon Musk told media last night, as reported by CNBC this morning, Nevada had the most important factor going in their favor, which was not incentives, but rather time to completion.
“The biggest single factor was time to completion, because unless the Gigafactory is ready when we need to produce the mass market affordable electric car, then the vehicle factory will be stalled, so time to execution was extremely important. Nevada was in the lead, I’d say number one, in time to execution,” Musk said.
Tesla Motors Inc (NASDAQ:TSLA) is hopeful their five million square feet Gigafactory will be completed by 2017 and running at full battery making capacity of 500,000 battery packs per year by 2020. At that point they also plan to be producing 500,000 vehicles annually from their three models that will be available at that time: the currently available Model S, the soon to be released CUV the Model X, and in 2017 the more affordable, mass market sedan, the Model 3.
Nevada’s incentives package was said to total somewhere in the range of $675 million initially, but now seems to be worth up to $1.25 billion over a 20-year period. Tesla Motors Inc (NASDAQ:TSLA) will receive a 10-year property tax abatement worth about $325 million, a 20-year sales tax abatement worth $725 million, and a $120 million in transferable tax credits. Tesla Motors Inc (NASDAQ:TSLA) will also operate tax-free within the state for the first 10 years of their existence there.
For Nevada, they’ll enjoy the benefits of 6,500 jobs in their state once the Gigafactory is fully operational, with close to a $100 billion economic impact directly and indirectly. Tesla Motors Inc (NASDAQ:TSLA) has also agreed to invest $3.5 billion within the state, on property or manufacturing equipment.