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The Tax-Break Race for a New Tesla Plant Has Begun

By Howard Smith – Updated Jul 15, 2020 at 10:07AM

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A Texas county has agreed to incentives to help attract a new $1.1 billion Tesla Cybertruck plant.

The potential for a new Tesla (TSLA -1.10%) plant in Travis County, Texas, near the Austin airport, has prompted the county to already agree to offer the company incentives to build there. The county voted to offer at least $14.7 million in tax breaks if the electric-car company builds there and brings in thousands of jobs, according to a CNBC report. The plant would be for production of the Cybertruck, according to the report.

CEO Elon Musk has previously brought up Texas as a potential site for the company. In May, Musk was in a battle with county officials in Alameda County, California, the location of the current Tesla headquarters and Fremont factory. Musk fought to open up the Fremont plant after suspending operations due to the COVID-19 pandemic, but county officials were not yet giving approval at the time. Musk then tweeted that the company "will now move its HQ and future programs to Texas/Nevada immediately." 

aerial view of manufacturing plant site

Image source: Getty Images.

The property on the Colorado River is known as the Austin Green development. Tesla would still need to buy the land for approximately $5 million, and the plant itself could cost $1.1 billion to build. 

The public hearing to discuss the tax incentives, which was live-streamed on YouTube, brought supporters of the project including current Tesla employees, Texas-based Tesla owners' clubs, and local business owners. 

Critics of the project included environmental and labor advocates, as well as some local residents, the CNBC report said. Some safety concerns focused on Musk's response to the COVID-19 shutdown and restart at the Fremont plant, in defiance of county orders at the time. 

Howard Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

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