Last week, a report found that Tesla’s 5.5-million-square-foot Gigafactory in Nevada fell far short of its projected job creation at the end of 2015.
Considering that Tesla was given about $1.3 billion in tax incentives to build its huge battery manufacturing hub in Nevada, state officials are keeping an eye on how Tesla is holding up its end of the investment bargain.
When Nevada Governor Brian Sandoval signed the tax breaks into law in September 2014, the Governor’s Office of Economic Development hired economists to project Tesla’s progress and economic impact over time. According to those projections, the Tesla Gigafactory partner Panasonic should have created 700 permanent positions and invested $1 billion.
In reality, the Gigafactory only had 272 workers and led to a $374 million investment, and most of that progress was made late in the year when the factory opened some production lines well ahead of schedule.
However, The Verge reports that the state’s numbers were actually calculated incorrectly and didn’t consider time elapsed between the report’s January publication and the start of construction in October.
Tesla’s official application projected only 300 jobs created by the end of 2015 — a number they only missed by 9 percent. By 2019, Tesla expects that number to grow to 4,000 jobs, and when the factory is operating full capacity in 2020, that will top out at 6,500 jobs.
Regardless of current progress, Tesla has 10 years before the state can legally attempt to recoup its investment. If Tesla fails to invest $3.5 billion by that time, the company will owe Nevada for the tax credits.
State officials believe Tesla is making “satisfactory progress” on the battery plant, the Associated Press reported.
That progress will take a few more big steps later this year as Tesla begins producing its car batteries at the Gigafactory and prepares for the release of the new Powerwall this fall.
Do you think Tesla will be able to deliver the promised $3.5 billion investment within 10 years? Do you think the Gigafactory’s job numbers are daunting? Comment below or tweet @MNetKatie.