New York State Takes $900 Million Write Down on Tesla Plant Value

Elon Musk at Model Y announcement

New York state officials have written down more than $1 billion in economic development investments in multiple tech projects across upstate New York, including nearly $900 million on Tesla’s troubled solar panel production factory in Buffalo.

The Wall Street Journal reports that New York state officials have written down more than $1 billion in economic development investments in various tech projects across upstate New York, including Tesla’s Buffalo solar-panel production factory. The Buffalo plant was first announced by Governor Andrew Cuomo (D) in 2013 as part of efforts to improve state economy with manufacturing facilities developed by the State University of New York’s Polytechnic Institute.

New York state spent $959 million to build and equip the Buffalo factory. The factory, along with other factories in Syracuse and Plattsburgh, is owned by the Fort Schuyler Management Corp. which is a nonprofit group led by officials from SUNY Poly and other state agencies.

According to financial statements posted on the Fort Schuyler website last month, the firm wrote down the value of Tesla’s Buffalo factory by $884 million and other high-tech projects by $311 million. In the documents, auditors wrote that after re-evaluating the terms of the facilities leases, they determined that the corporation “will not likely receive the direct financial benefits associated with ownership of the manufacturing facility and equipment.”

Fort Schuyler’s financial statements that cover the fiscal year which ended on June 30 2018, valued the group’s land, real estate, and equipment at around $94.8 million, down from $1.2 billion in 2017. State officials said that the write-downs were an accounting charge but many believe that the facilities have provided very little value to the taxpayers whose money built them.

E.J. McMahon, the research director of the fiscally conservative think-tank Empire Center for Public Policy, stated: “This is black and white evidence that they wasted $1.2 billion of taxpayer money.”

Fort Schuyler President Doug Grose argued that the write-downs were technical and not indicative of the factories value. “The economic value of providing those assets comes in the form of investment and employment by Tesla, which flows to New York state—not the corporation,” Dr. Grose said.

But many have taken issue with these claims, including former employees. Breitbart News reported in February of 2019 that many former employees have claimed that New York’s investment in the Buffalo factory has not been profitable for the state. From Breitbart News report:

The Gigafactory II in was constructed and kitted out with $750 million in taxpayer funds as part of an initiative by Gov. Andrew Cuomo. According to the rules of the initiative, if Tesla doesn’t employ 1,460 workers at the facility by April 2020 the company could face $41.2 million in state penalties. Currently, the plant employs 800 workers divided between Tesla and Panasonic who both operate out of the facility. But some former workers have disputed Tesla’s employment figures.

Tesla responded to some claims by former employees stating: “As we’ve said, Solar Roof is a product that needs to last decades, and therefore has a long development cycle, and we’ve been thoughtful and deliberate as we gradually ramped production,” a spokesperson said. “We understand that job cuts like those we announced two weeks ago are never easy, and we are grateful to everyone who departed for their contributions to Tesla’s mission.”

Tesla reported a 21 percent decrease in installed solar systems for the fourth quarter which appeared to add to the lack of production at the facility. Dale Witherell and another worker, Dennis Scott, saw the slow production rate at the factory firsthand: “We’re paid for 12 hours to work, not watch movies,” Scott said. Witherell added: “During my employment there, nothing improved during the entire employment as far as production.”

Witherell continued to say: “Some weeks we produced enough solar modules for zero homes and probably the best I saw was maybe four homes in a week, so that is alarmingly scary to obviously be a part of a company who doesn’t have any sense of urgency to tackle these issues and get them working correctly.” Scott himself questioned the decision to invest $750 million into the firm saying: “That $750 million could have been spread out a lot better to a lot of other companies to stay here in Buffalo than sinking it into one big company.”

Even Rep.-elect Alexandria Ocasio-Cortez (D-NY) has criticized the investment and Elon Musk. Breitbart News reported in December of 2018:

Speaking at a climate change town hall organized by Senator Bernie Sanders of Vermont recently, Democratic Rep.-elect Alexandria Ocasio-Cortez criticized Elon Musk’s electric car manufacturer Tesla over the company’s use of taxpayer funds. “When we as a public choose to invest in new technologies, we deserve a return on that investment,” Ocasio-Cortez said when discussing government investments in green energy.

Ocasio-Cortez further stated: “For far too long, we gave money to Tesla, we gave money to a ton of people and we got no return on our investment that the public made in creating technologies, and it’s about time we get our due because it’s the public that funded and financed a lot of innovative technologies.”

Read more at Breitbart News here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or email him at


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