Tesla’s decision to build a battery gigafactory outside Reno, Nevada—and the state’s willingness to throw US$1.3 billion in incentives into the project—have “permanently changed the economic landscape of the area,” according to a new report from the state Office of Economic Development (OED).
“The promises made have been promises kept,” said OED Deputy Director Derek Armstrong. “We’re extremely happy to see what they’ve done so far.”
When Tesla selected the state for the project in 2014, “Nevada was part of the wreckage left behind by the global recession of 2008,” CleanTechnica recalls. “Unemployment and foreclosures were high, wages low. If it wasn’t for the casinos in Las Vegas and Reno, Nevada was pretty much out of business.”
Tesla received incentive offers from several states before selecting Nevada, but “the deal was no taxpayer giveaway,” adds correspondent Steve Hanley. “Tesla had to meet certain performance guarantees along the way in order to qualify for the incentives. This latest report says the company has met or exceed virtually every one.”
More specifically, “Tesla promised to provide 6,500 jobs at the gigafactory by the end of 2018. In fact, there were 7,059 employed there at the end of June. The average wage for the employees is $25.78 per hour, compared to the projected figure of $27.35. That is the only metric in the incentive agreement that Tesla has not exceeded. As of June, Tesla has brought in $6.05 billion in capital investment, surpassing the $4.95-billion projection.”
All told, the local population grew by 25,500 between 2014 and 2017, and the local economy added 34,500 new jobs, 44% of them directly attributable to Tesla. That influx boosted demand for housing, retail, and other services, Hanley notes. It also drew additional investment from companies like Switch,jet.com, and Blockchain, due in part to the “increased visibility that Tesla created, and the infrastructure investment the company has brought about,” the state report concluded.
“This really shows the economic diversification for Northern Nevada, in that it’s moved from just being a service-based economy with a lot of reliance on the hotel and casino industry,” Armstrong told the Las Vegas Review-Journal. “Now, we have an emerging advanced manufacturing component.”