Remember that \u201cbig victory\u201d we heard about recently for the state of Nevada? You know, the one where Tesla Motors announced that they would build their huge, $5 billion, high-tech battery factory in Nevada vice California, Arizona, Texas, or New Mexico?<\/p>\n
Well, that victory apparently came with a price: somewhere between $2 billion and $3 billion in tax incentives from Nevada<\/a>. That works out to somewhere between 50 and 60 percent<\/em> of the cost of building the Tesla-owned facility.<\/p>\n From Tesla\u2019s latest regulatory filings:<\/p>\n The total capital expenditures associated with the gigafactory through 2020 are expected to be $4-5 billion (sic), of which approximately $2 billion is expected to come from Tesla.<\/p><\/blockquote>\n And where will the rest of the money to build for the factory come from?\u00a0 Nevada taxpayers will be on the hook for it.\u00a0 That’s kinda how tax incentives work.<\/p>\n There are a few other things about the deal that would bother me if I were a Nevada resident, too.\u00a0 Like the fact that Tesla currently has roughly $2.6 billion in cash \u2013 and around $4 billion in liabilities.<\/p>\n There\u2019s also this:<\/p>\n \u201cTesla has also disclosed its overhead costs are now rising 20% on a year-over-year basis, and research and development expenses are increasing 30%.\u201d<\/p><\/blockquote>\n Finally, Tesla\u2019s current business plans project that they’ll be making (and, presumably, selling) 500,000 electric vehicles annually by 2020. Tesla also expects their new battery factory to reduce costs of battery pack production vis-\u00e0-vis current sources by more than 30% per-killowatt-hour.<\/p>\n Somehow, I just don\u2019t see both of those happening.<\/p>\n Hey, I hope this works out for the good people of Nevada. But I can\u2019t help thinking \u2013 based on what we\u2019ve seen from other similar \u201cgreen energy\u201d\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u201cOne more such victory, and we shall be undone.\u201d<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"boondoggles<\/del>\u00a0\u00a0\u00a0\u00a0\u00a0 efforts going belly-up over the past few years \u2013 is that there\u2019s a better-than-even chance they\u2019ll end up quoting Pyrrus of Epirus concerning the Battle of Asculum<\/a>:<\/p>\n