Tesla Just Presented Its Plan for an Austin Gigafactory

June 23, 2020
Tesla
Photo: Tesla

During a public hearing in front of Travis County officials and community members, Tesla leadership unveiled its official pitch for an Austin gigafactory on Tuesday.

Rumors have swirled that the electric vehicle maker has been eying Austin for its next assembly plant since at least February, when Elon Musk, the company’s CEO and founder, began to tease the location on Twitter.

Since those cryptic tweets, talks have escalated and now Travis County commissioners are aiming to lure the company’s fifth gigafactory — and an estimated 5,000 jobs — to East Austin with approximately $14.7 million in incentives. Meanwhile, the company is also seeking a $68.1 million tax break from the Del Valle Independent School District.

Rohan Patel, senior global director of public policy and business development at Tesla, said during the hearing that the company has talked to officials from nearly every state east of the Rocky Mountains about a proposed location for the plant. Tesla is reportedly still considering Tulsa as another finalist for the location of the factory. He said incentives offered would not be the only reason for Tesla to choose Austin over other locales, but he did note that, “compared to other states, you’ve got high property taxes in Texas.”

“That’s especially true for businesses like Tesla, with extremely high machinery and equipment costs,” Patel said, via the hearing’s video call. “We’ve got as part of our production, literally some of the most expensive equipment on the planet. And that’s considered part of the property taxes in Texas.”

But not everyone is sold on Tesla’s need for incentives. Among the more than 150 union workers, Tesla employees and environmental activists who commented during the Tuesday hearing, some speakers questioned the company’s controversial record on the environment and labor unions.

Yvonne Cortez Flores, president of the American Federation of State, County and Municipal Employees Local 1624, said that Tesla has a strong anti-union message and history of financial retribution against employees who speak out against the company. She also noted that the company has a history of fighting local governments, citing Tesla’s lawsuit against Alameda County in March for forcing its factory closed amid the COVID-19 pandemic.

“During our shelter-in-place, who is to say that Tesla will not do the same to Travis County?” Flores said.

Resident Richard Franklin, on the other hand, said he welcomed the automaker to the area. He said he’s lived in the community for 20 years and thought Tesla would bring much-needed development to East Austin. He called individuals who complained about environmental and educational concerns “disingenuous,” since he believed they did not live in the area.

“We’re on the come up, but we need someone to raise the profile,” Franklin said.

No decisions were made on Tuesday, and the conversation will continue. Travis County Judge Sam Biscoe said the matter will be back on the agenda next week, and commissions may take action on the proposed incentives then.

On Thursday, Del Valle Independent School District officials will also hold a public hearing about the company’s request for a tax break, the savings from which the company has said will partially go toward various social service programs in the Austin area.

If the Palo Alto-based company chooses Austin as the location for its $1.1 billion assembly plant, it would make Tesla one of the area’s largest tech employers, and bring 5,000 new jobs to the region. The company also estimated its arrival in Austin would entice other employers to come to the region, adding an additional 4,000 non-Tesla jobs and $425 million in non-Tesla related wages.

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