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Tesla Motors just snagged a hefty tax break in California. The state’s Alternative Energy and Advanced Transportation Financing Authority, part of the Treasurer’s office, yesterday approved a request from the startup to avoid paying sales tax on up to $320 million worth of manufacturing equipment — […]

tesla-models-caliTesla Motors just snagged a hefty tax break in California. The state’s Alternative Energy and Advanced Transportation Financing Authority, part of the Treasurer’s office, yesterday approved a request from the startup to avoid paying sales tax on up to $320 million worth of manufacturing equipment — a deal expected to save Tesla $28.8 million, according to a staff report put together ahead of yesterday’s meeting.

Here’s how it works: Tesla will purchase machinery for four upcoming projects, spending $238 million between now and 2012 for Model S sedan production; $59 million for a powertrain components plant in Palo Alto, Calif.; and potentially $5 million for an expansion under consideration for the company’s Roadster assembly capacity (another $18 million is for “unbudgeted” equipment purchases).

tesla-staff-reportBut the title for that equipment will at first be held by the state financing authority, which doesn’t have to pay sales tax on equipment used to make zero-emission vehicles and other advanced transportation technologies. The state will then transfer the title back over to Tesla, which according to the staff report has now delivered “over 800 Roadsters,” just about a month after it announced delivery of its 700th Roadster at the Frankfurt Motor Show.

Tesla is riding quite the wave of government incentives for electric vehicles at this point, having secured a conditional loan commitment for $465 million from the Department of Energy this summer for the Model S sedan and powertrain projects, and been able to take take advantage of a loophole in Colorado this year that let a small number of Roadster buyers score a more than $42,000 tax credit on the luxury sports car. And the tax break announced yesterday comes by way of a program created in part to keep Tesla’s manufacturing based in California.

According to the staff report (you can download the full PDF here), Tesla has yet to finalize a site for its Model S production facility, but it is considering at least two sites in Long Beach and Downey, both in Southern California.tesla-volume-assumptions

Photo courtesy of Tesla Motors

  1. [...] it was back to California again after the Golden State put together juicier incentives, including a tax break expected to save the company nearly $29 [...]

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  2. [...] it was back to California again after the Golden State put together juicier incentives, including a tax break expected to save the company nearly $29 [...]

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  3. [...] October 2009: California Treasurer’s office approves request from Tesla to avoid paying sales tax on up to $320 million worth of manufacturing equipment, including $238 million worth of machinery for Model S production, under the incentive program Schwarzenegger announced in June 2008. State estimates deal will save Tesla $28.8 million. [...]

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  4. [...] bet on the startup (subject to certain benchmarks) through the ATVM program, while California has approved an approximately $28.8 million tax break for the company through the state’s Alternative Energy and Advanced Transportation Financing [...]

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  5. [...] bet on the startup (subject to certain benchmarks) through the ATVM program, while California has approved an approximately $28.8 million tax break for the company through the state’s Alternative Energy and Advanced Transportation Financing [...]

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