Just moments ago, CNBC broke the news that Tesla has chosen Northern Nevada to house its new gigafactory. And already, a special session of the Nevada Legislature is being set for next week. And of course, we're already starting to hear all sorts of political spin and economic happy talk.
So what's the deal? We know Tesla is planning to spend $5 billion to build its 10,000 square foot gigafactory. What we don't yet know is how much Tesla is expecting the State of Nevada to kick in for construction.
We strongly suspect this deal will involve some Nevada taxpayer money, as a special session looks to be necessary. It's also been no secret that Tesla has demanded public subsidies for this gigafactory.
So how much will this cost us? Most likely, a cool $400 million.
And what are we getting out of this? Potentially 6,500 new jobs for the Reno/Sparks region, along with a breakthrough that may open the door to electric cars becoming more affordable for more consumers.
Here's the good news: This has the potential to actually make a dent in the long promised drive to diversify Nevada's economy. This also has the potential to kick-start the green tech sector and take it to new levels here in Nevada and nationally. Oh, and this can help quite a bit in our efforts to take on the challenges posed by climate change.
Here's the disturbing news: We're once again relying upon corporate welfare for any sort of economic development. And that's just not a sustainable business plan going forward. After all, take a look at how far Reno and Nevada have gone with Apple. Apple continues to laugh all the way to its offshore bank accounts while we're left holding the bag (full of holes, thanks to the many budget cuts we've endured over the past half-decade).
This is why we're experiencing mixed reactions now. On one hand, it's exciting to think that Nevada may be home to the next generation of transportation & energy innovation. But on the other, this achievement seems awfully tainted due to the $400 million we're having to
Right now, let's just say the 63 Nevadans who may soon have to head back to Carson City are about to step into a rather sticky situation.