Tesla puts plans on hold over finance concerns
A Chicago-based investment research firm said last week that Nevada may not have the financial muscle to offer Tesla the $500 million in incentives the company is demanding for construction of its gigafactory.
Tesla has said it expects the state to cover about 10 percent of the cost of the $5 billion plant, which would employ about 6,500.
“According to market speculation, only California and Texas have adequate tax bases and budget to cover the cost,” wrote analysts from Zacks Investment Research Inc.
The analysts said California may be back in the running for the plant because state officials are preparing to offer a package of state credits and accelerated environmental reviews to Tesla.
Along with Nevada, other states known to be in the running for the plant are Arizona, New Mexico and Texas.
Tesla completed dirt-moving for a plant site at Tahoe Reno Industrial Center this summer, and said it plans a groundbreaking ceremony for the factory at three sites to avoid construction delays. The plant is expected to be in operation by 2017.
The Zacks analysts note that a Washington, D.C., organization that monitors company-specific subsidies has written an open letter to the five states, cautioning them about big giveaways.
Good Jobs First says the level of incentives may be disadvantageous for the state in which the gigafactory is located, even though the project is lucrative.
The agreements are designed to split the costs of improvements such as traffic signals between Carson City and developers whose projects generate the traffic increases that trigger the need for improvements.