The day after Nevada lawmakers approved a package of tax incentives worth $1,538,000 per job to persuade California based Tesla Motors Inc. to build its Gigafactory battery plant in the state, California Governor Jerry Brown, who is rumored to be preparing a Presidential run, told the Sacramento Bee on Friday that “Nevada’s tax breaks are California’s benefit” if they put electric cars on California roads.
“I just hope they can make the batteries come down 30 percent, because the only way we can really meet our electric car goals (is) if the batteries are made cheaper,” Brown told reporters after speaking in San Francisco. “So whether they’re made in Reno or wherever, the real challenge is the investment capital and the technological prowess to get our batteries cheaper so ordinary people can buy electric cars.”
Governor Brian Sandoval of Nevada signed a package of bills on September 11 to provide Tesla Motors $1.3 billion in tax breaks as reward for the company choosing to build their $5 billion Gigafactory that might provide 3,250 Nevada jobs 20 miles east of Reno along interstate 80.
Sandoval said the agreement has “changed the trajectory of our state forever” during the signing ceremony at the capitol. He added that, “Nevada has announced to the world–not to the country, but to the world – that we are ready to lead.”
Brown’s Republican opponent, Neel Kashkari, bashed Brown in a gubernatorial debate earlier this month for failing to land the deal. Brown said that his administration “fought hard for Tesla, but Tesla wanted a “massive cash upfront payment that I don’t think would be fair to the taxpayers of California.”
“Nevada’s tax breaks are California’s benefit if we can get to our million electric cars,” Brown said. “And the cars come off the factory line right there in Fremont, and they’ll keep coming as long as that Nevada plant actually gets built and they can put out batteries significantly cheaper than they do today.”
Tesla’s founder and CEO Elon Musk vigorously played off California and four other western states over a six-month period for the most lucrative incentive deal.
Brown was reported to have offered $500 million in additional subsidies from California on top of the current incentives that allow Tesla to sell California tax credits for producing zero emissions vehicles to other automakers that aren’t so clean for up to $35,000 per vehicle.
Gartner Research analyst Thilo Koslowski described the California arrangement as, “At the end of the day, other carmakers are subsidizing Tesla.” But with the loss of 6,500 Gigafactory jobs, California is now subsidizing Nevada.
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