If any state should know when to not double down on a bet, it’s Nevada.
And the Silver State has taken a chance in its bid to secure Tesla Motor’s $5 billion battery factory in Northern Nevada. The electric car maker has already begun construction on the massive project in an industrial park just north of Reno.
The deal involves more than $1.25 billion in state subsidies. In exchange, Tesla will spend at least $3.5 billion before the tax abatements and credits kick in. Gov. Brian Sandoval, state legislators and business leaders rushed to endorse the deal last week.
Sandoval said the deal will grow Nevada’s economy by $100 billion over the next 20 years -- a financial projection that critics of the deal question. Some critics say the agreement is a great bargain for Tesla, and not so great for Nevada.
Michael Hiltzik, a columnist for the Los Angeles Times, says Tesla is taking Nevada for a ride. Hiltzik in a recent column argued that Nevada could have won the deal just by offering Tesla CEO Elon Musk was seeking, that is subsidies that provide “maybe 10 percent” of its cost to build the factory.
That’s $500 million, not $1.2 billion. The Wall Street Journal reported Nevada’s so-called gift to Tesla is 15 times larger than any incentive package the state has awarded and among the richest nationwide.
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Michael Hiltzik, columnist for the Los Angeles Times
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