Tesla Plant in Austin

Tesla announced they made the decision to open their Cyber truck factory near ABIA (Austin Bergstrom International Airport). The decision was made on July 27th during their earnings call. Here is an overview of the deal and the tax incentives provided to Tesla.  

Construction of Tesla Plant 

Forecasts for construction starts are for the third quarter of 2020. Start up forecasts are currently for the end of 2021. With that being said, many factors play into construction so we would predict the real opening may have a few months added onto the open date. Tesla’s venture started early in 2020 for its gigafactory.  The site is 2100 acres in Southeastern Austin.  There is criticism around no oversight on this development from an independent authority.  “Judge and county commissioners are allowing Tesla to write its own ticket and exempt themselves from county policy” according to Jeremy Hendricks (regional director for Laborers).

Tax Breaks

Overall the tax break for Tesla in Austin is $13.9 Million dollars. The tax rebates are incremental and they are as follows:

• 70% Tax rebate for the first 1.1 Billion in investments 
• 75% Tax rebate for the second Billion in investments
• 80% Tax rebate for the third Billion in investments 

Tax revenue for Travis County will see approx $8.8M for the first 10 years of Tesla’s existence in the Austin area. Tesla promises to pledge 10% of its pre-incentive tax revenues to local nonprofits, education and transportation causes.  The deal is performance based, Tesla could lose on its tax breaks if it does not hold up their part of the deal. The company is also required to hire at least 50% of its workforce from residents in Travis county.  Minimum wage is the base line requirement at $15 per hour.  

Summary

• 5,000 new jobs
• SF 4-5 Million 
• $8.8 Million in tax revenue over 10 years
• $776,000 in school revenues
• $13.9 Million in Tax breaks over 10 years