Sly billionaire Elon Musk once again has politicians and business leaders on edge. This time, he’s toying with officials in Texas and Oklahoma as he claims he will start construction on a new Tesla factory in one of those states later this summer.
It’s mostly about tax breaks, with a little bit of “thumb-in-your-eye” for California.
Tesla told officials in Travis County, Texas, which includes Austin, that the automaker wants to invest about $1 billion to build a four million to five million square foot vehicle assembly plant employing 5,000 people on what is now a cement operation. But to make it happen, Tesla needs tax breaks to make the site competitive with an alternative location in Oklahoma.
Today Tesla has just one U.S. assembly plant, in Fremont, California. Founder Elon Musk went back and forth over Alameda County California officials about when his plant could reopen after the pandemic. When it didn’t go his way, he tweeted about leaving the state.
As for the tax breaks, Tesla doesn’t exactly “need” them. The company’s stock trades near $1,000 per share, giving it a market cap almost equal to that of Toyota even though Tesla sells very few cars by comparison. If Tesla wanted, it simply could issue new shares and put the new plant wherever it wants. By demanding tax breaks, the company gets local taxpayers to fund some of its costs, whether they want to or not.