Tesla is taking Nevada for a ride

[Newsjock]

Source: Los Angeles Times
By Michael Hiltzik

The state of Nevada, of all places, should understand the gambler's adage about how if you can't pick out the sucker at your card table, it's you. Despite that, the state Legislature has approved a massive giveaway to Elon Musk's Tesla Motors to build a lithium-ion battery factory in the desert north of Reno.

... Nevada Gov. Brian Sandoval brags that the project will produce $100 billion in economic stimulus over the next 20 years, including 6,500 permanent jobs at an average wage of $25 an hour, for an 80-to-1 return. "Nobody really believes it, outside the governor's office," says Bob Fulkerson, state director of the Progressive Leadership Alliance of Nevada, a watchdog group questioning the deal. The deal doesn't require Tesla itself to create any specific number of jobs directly, according to an analysis by Good Jobs First, an economic development think tank. Skepticism about the Tesla handout spans the ideological divide; conservative groups have attacked it as corporate welfare too.

... "No matter how you slice it," asserts Richard Florida, an expert on economic development incentives at the University of Toronto, "the deal makes utterly no sense. It is just one more example of a government giveaway for a factory that would have been built anyway."

In other words: Nevada, the sucker is you.

Read more: http://www.latimes.com/business/hiltzik/la-fi-0914-hiltzik-20140914-column.html

[Orsino]

1. If it helps to finance the next release of valuable patents, could be good for industry.

Sucks for Nevadans.

[Warpy]

2. NM offered land to build the factory on

but I'm not sure about any tax breaks. Land, we got. Tax breaks, we can't afford.

[Erich Bloodaxe BSN]

3. Skimming the linked story, it looks more that Nevada politicians

were the ones who decided to give Tesla the free ride, not that Tesla went out of its way to take the state for a ride.

How eager was Nevada to land this project? The offer is more than twice what Musk was seeking from the five states, including California, competing for the factory. Musk told analysts on July 31 that he expected the winning state to provide "maybe 10%" of its estimated cost of about $5 billion. And there are signs that the die was cast even before Nevada Gov. Brian Sandoval started shoveling out the bucks. Ground was broken at the factory site early this year, long before the tax abatements were offered, and the site was attractive for other reasons — it's close to a lithium supply and to Tesla's California auto plant and corporate headquarters.

Tesla merely took the ludicrously profitable deal they were offered.