Texas county gives thumbs-up to tax breaks to lure Tesla factory

Bob Sechler, Austin American-Statesman on

Published in Business News

The prospect of a Tesla Inc. factory in the Austin area has moved a big step closer to reality, after Travis County, Texas commissioners on Tuesday approved tax breaks the electric vehicle maker requested that are worth a minimum of about $14 million over 10 years if Tesla invests $1.1 billion here.

Under the terms of the deal, the amount of the tax incentives to Tesla could rise significantly if the company invests more than $1.1 billion in the manufacturing plant, which it has said will employ 5,000 people.

The amount also will rise if the agreement eventually is extended for an additional decade, as both the county and Tesla envision.

Tesla, which is based in California and is run by high-profile CEO Elon Musk, recently became the most valuable automaker in the world, with a market capitalization topping $280 billion.

Four of five Travis County commissioners voted to approve the incentive agreement Tuesday, with Commissioner Margaret Gomez abstaining.

Just prior to the vote, Gomez pushed for a week's delay to allow for more time to review the agreement, but other commissioners voiced concern that doing so might prompt Tesla to instead build the factory elsewhere.


Rohan Patel, a Tesla executive who participated in the commission's virtual meeting, was noncommittal on that question when commissioners asked him about it. However, he told them that the company had just had a call "with a governor of another state and mayor of another town to go through a whole bunch of things similar to what we have gone through now."

That prompted Commissioner Jeff Travillion, whose district includes the potential site for the factory, to say the risk of losing the project was too great.

"We are talking about a transformational project that will address poverty and opportunity in that area for generations," Travillion said.

Last week, the Del Valle school board approved a tax break for the factory that has been estimated at about $46.4 million over 10 years. The value of that deal won't change much even if Tesla invests more in the factory.


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