On Thursday, Tesla Motors officially won $15 million California tax credit from a state economic development board.
The California Governor’s Office of Business and Economic Development (also known as Go-Biz) voted on Thursday to add Tesla among more than 60 companies that will share in almost $50 million tax break package. The credit for Tesla was approved on a 4-1 vote, with opposes from a board member Madeline Janis. Tesla stated that it would invest another $2.4 billion on California as part of the deal with the state. The company was questioned by Janis if any of the money would be from other public sources because Tesla has notably sought public subsidies.
Among the 63 companies that shared the $50 million credits, Tesla was the biggest beneficiary. Those credits awarded this week are intended to support creation of a combined 11,000 jobs. Tesla’s vice president of business development Diarmuid O’Connell told the panel that voted on the awards that its credit would allow his company to add more than 4000 jobs in California. He said, “This is necessary. The tax credit will meaningfully either tip the balance about whether we would create that job here or somewhere else, or now or later.”
The company would get the full amount by creating 4,426 positions by 2019. The jobs must have a minimum annual salary of $35,000 and an average salary of at least $55,000. According to the contract, Tesla can collect $10.5 million of the incentives in 2019, after it has recruited most of the workers. The company claims it has made most of the hires already. The state suggests around 6500 jobs but the automaker company said that the number has been crossed already. It states it has more than 9000 workers in California. This makes the company the state’s largest manufacturing employer, said company spokesperson Ricardo Reyes.
The California state committee also gave tax breaks to several Los Angeles based companies, as part of an overall $49.8 million tax awards package. The other companies include Riot Games, Beachbody, Sketchers. Putting together all the 63 companies has projected 11,340 jobs and generate more than $3.4 billion in investment across California.
Study by L.A Times shows that apart from Tesla, its sister concerns SolarCity and SpaceX have received or secured commitments for $4.9 billion in government support. The figure underscored Musk’s strategy of incubating high-risk, high-tech companies with public money. Tesla accounted for almost half of the total. The Times covered a various government incentives that included grants, tax breaks, factory construction, discounted loans and environmental credits that Tesla can sell. This also covers tax credits and rebates to buyers of solar panels and electric cars.
With all the privileges, the company plans to make use of the new money to add more than 4,000 jobs to its Bay Area factories and plants and create enough jobs to make it the largest manufacturing employer in the state.