Tesla Might Get Performance-Based Incentive Deal From Travis County, Starting With 70% Rebate After $1B Investment

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Details of Tesla’s incentive deal with Travis County were revealed on July 10, about a day after the Del Valle District Board of Trustees approved tax abatements for the company’s Cybertruck and Model Y Gigafactory. The Travis County Comissioners Court are scheduled to discuss the updated incentive deal for Tesla on July 13.

The Travis County Commissioners Court will discuss the approval of a performance-based incentive deal for Tesla tomorrow. County staff provided new documents about the deal.

Travis County hopes that the performance-based incentive deal would encourage Tesla to invest in the in the area more. Based on the documents, Tesla would get a 70% rebate on maintenance and operations property taxes after it invests US$1.1 billion in Travis County through the construction of its Cybertruck and Model Y Gigafactory. Tesla would get a 75% rebate on taxes once it invests a second “incremental billion," and an 80% rebate after it invests more than US$2 billion in Travis County.

Tesla has initially requested to receive an 80% rebate for its first 10 years in Travis County, and 65% for the following 10 years after. Travis County’s original incentives deal offered Tesla a property tax rebate worth about US$14.65 million over 10 years.

The performance-based incentive deal requires that Travis County residents make up at least 50% of Tesla’s Cybertruck and ModelY Gigafactory. Also, Tesla must pay a minimum wage of US$15 to all employees and agree to increase the minimum wage over time based on the Consumer Price Index. Tesla outlined plans to hire up to 5,000 employees for its Cybertruck Gigafactory in Texas.

According to Community Impact—a local media outlet—Travis County could benefit from Tesla’s Cybertruck and Model Y Gigafactory. Its estimated to make US$8.8 million in tax revenue from Tesla within the first 10 years of the agreement. In comparison, Del Valle’s District Board of Trustees already approved its incentive deal for Tesla and could net up to US$28 million in taxes.

Tesla may announce the final location of its Cybertruck and Model Y Gigafactory during its Q2 2020 Earnings Call, scheduled for July 22.  Texas and Oklahoma are that last two states vying to be the home of Tesla’s next Gigafactory.