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Tesla Wooed With Tax Breaks to Build Texas Gigafactory

Tesla is approved to receive millions in potential tax breaks by Travis County, Texas, which wants the electric carmaker to build its next Gigafactory on its turf.

Tesla  (TSLA) - Get Free Report has been promised millions in potential tax breaks by the Texas county that wants the electric carmaker to build its next Gigafactory on its turf.

Officials in Travis County voted in favor of granting Tesla tax breaks worth a minimum of $14.7 million to build the new plant on a property near the Austin airport that borders the Colorado River. 

The Travis County Commissioners Court voted 4-0 on the deal, with one abstaining. Officials discussed the proposal in a closed session on Tuesday before hearing from speakers at a public hearing that was livestreamed on YouTube. 

The site, known as the Austin Green development, has been sourced as the next location for Tesla to assemble its all-electric vehicles, including the Cybertruck. The land is part of the Del Valle Independent School District, which on July 10 gave its own nod to give the electric car company some $46.4 million in property tax breaks.

The 4 million-to-5 million-square-foot plant would employ 5,000 workers and become Tesla’s fourth for vehicle assembly globally. 

Preliminary talks with Austin and county officials took place at the end of June,  

Tesla founder and CEO Elon Musk raised the prospect of moving all of the company’s operations in April after stay-at-home rules in California forced the shutdown of the automaker’s Fremont facilities, threatening in a tweet to "immediately" relocate Tesla's headquarters to Nevada or Texas.

Tesla defied the rules for about a week until the county sheriff intervened, though Musk continued to test the mettle of both state and regional authorities by pushing to reopen the factory, including threatening to pull out of California outright and move to Texas.

However, Tesla’s lone-star-state aspirations were in play well before the coronavirus outbreak - and Tesla’s tussle with California - with discussions with Travis county commissioners and the Del Valle Independent School District taking place well before the pandemic struck. 

Tesla was also making the case early last month, revealing in a proposal details of its  potential factory plans at the Travis County location, just minutes away from the Austin-Bergstrom International Airport, according to Rob Maurer, who writes Tesla Daily.

Shares of Tesla were down 0.65% at $1,506.96 in trading on Wednesday.