Inside Texas’ Winning Effort To Secure The Tesla Gigafactory Austin Deal

by Ma. Claribelle Deveza July 30, 2020


Featured Image Credit: Cybertruck Owners Club/YouTube

Tesla’s deal with Travis County officials involved a flurry of meetings to secure a deal with the electric car maker, at least before rivals such as Tulsa, Oklahoma could sneak up and snatch the upcoming factory from Texas’ grasp. The details of how the deal was passed remain unknown for now, though a recent report from Texas Monthly has provided some insights on how Tesla was able to secure its Cybertruck Gigafactory in the lone star state. 

From the get-go, it appeared that Texas was already heavily favored by CEO Elon Musk as the site of Tesla’s next Gigafactory, which is expected to produce the Cybertruck and the Model Y. However, in the months and weeks leading up to Tesla’s final announcement, reports emerged that there were actually two sites being seriously considered for the upcoming EV plant: Austin, Texas, and Tulsa, Oklahoma. 

Tulsa, Oklahoma was the underdog between the two, but the city conducted a full-press effort to attract the electric car maker. This came to a head last month when Elon Musk himself visited Tulsa for a meeting with city and state officials. Musk was hosted in a massive, overlooking area that was pitched as the site of the Cybertruck Gigafactory in Tulsa. Even the city's iconic 75-foot-tall Golden Driller statue was painted with a Tesla insignia and a face that looked like Musk. 

Unfortunately for Austin, Tulsa’s momentum seems to have built up just as Travis County officials were hitting challenges in approving Tesla’s incentive agreements. In early July, for example, the Travis County Commissioners Court ended up postponing the vote for Tesla’s incentive deal over disagreements. Ultimately, it was the potential threat of the factory going to Tulsa instead, as well as the efforts of the Del Valle Independent School District, which seemed to have expedited the final incentive approvals from Travis County.  

Del Valle will host Gigafactory Texas, and even before the state’s deal with the carmaker was fully approved, the school district opted to utilize Texas Tax Code Chapter 313, also known as the Texas Economic Development Act, to offer Tesla reduced property taxes. The agreement allowed Tesla to cap its property value at $80 million, which meant that the company would just pay $776,000 in property value over ten years. Without the tax break, this amount would have hit over $5 million. 

Ultimately, the Del Valle ISD’s incentives were matched by Travis County, which gave Tesla additional property tax rebates worth $14 million over ten years. The county also offered Tesla additional incentives if the company spends more on the state, such as an 80 percent tax break if the electric car maker invests over $2 billion in the state. In a statement to Texas Monthly, Del Valle ISD Superintendent Annette Tielle expressed her enthusiasm at the project. “The prospect of Tesla being in our community was exciting for the opportunities that would come to fruition for our students,” she said. 

That being said, the Tesla deal was not free of its detractors. Even among the Del Valle Independent School District, there was a dissenting voice. Board trustee Susanna Woody, the lone dissident in the 7-1 vote, for one, stated that the vote felt “completely rushed.” Rick Levy, president of the Texas chapter of the AFL-CIO, also stated that the state was giving away money to a billionaire despite the pandemic. “When you’re staring at a budget deficit of billions of dollars due to COVID and you’re talking about giving any money to a billionaire, that’s a tough thing to swallow,” he said. 

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