California bill proposes incentives for Tesla’s planned gigafactory

Article by Christian A., on June 9, 2014

Financial incentives are being proposed by California lawmakers in a bid to persuade Tesla Motors Inc. to build its battery gigafactory in the state. Already based in California, Tesla has trimmed down the number of possible locations for $5 billion lithium-ion battery plant to a couple of states – California, Texas, New Mexico and Arizona.

Once operational, Tesla’s plant will employ around 6,500 workers. The bill was introduced by California Democratic state Senate leader Darrell Steinberg along with Republican state Senator Ted Gaines." Steinberg remarked that the gigafactory would help California achieve the dual goals of strengthening its economy and fostering more clean technology and renewable energy.

The bill will have to be approved by a two-thirds majority vote from both houses of the legislature before it can be passed. The bill is aimed at expediting approval processes for breaking ground on the factory and offering Tesla a series of tax cuts.

The legislators introduced the bill after Tesla chief executive Elon Musk described California's state's approval process for building green technology sites as complex and lengthy, noting that other states have a "more streamlined approach."

Gaines remarked that the incentives include tax credits, investment credits and hiring credits. He said that the bill will show Tesla that legislators are willing to “cut through the knot of red tape” that frustrates companies and prove that the state is open for business.

The bipartisan partnership between Steinberg and Gaines was prompted by fear that the EV maker would shift out of California to avoid state regulations. They are eyeing to persuade Tesla into building its gigafactory on a former military base in San Francisco.

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