Tesla bags $15 million in new state tax credits
Elon Musk’s Tesla Motors has won a fresh $15-million tax break from the state of California. The company has said it will use the money to add more than 4,000 jobs to its Bay Area factories and plants -- enough jobs to make it the largest manufacturing employer in the state.
The California Governor’s Office of Business and Economic Development (also known as GO-Biz) voted late Thursday to include Tesla among more than 60 companies that will share in an almost $50-million tax break package.
Tesla and its chief executive, Elon Musk, have become adept at tapping into local, state and federal sources of money to grow the business.
A recent L.A. Times analysis of subsidies for all three companies headed by Musk -- Tesla, SolarCity SpaceX -- found that the company has received or secured commitments for $4.9 billion in government support. The figure underscored Musk’s strategy of incubating high-risk, high-tech companies with public money. Tesla accounted for almost half of the total.
The figure compiled by The Times comprises a variety of government incentives, including grants, tax breaks, factory construction, discounted loans and environmental credits that Tesla can sell. It also includes tax credits and rebates to buyers of solar panels and electric cars.
This latest tax credit considered by California is tied to job creation. Companies can draw down the specific award amounts only after they hit employment milestones.
Tesla would get the full amount by creating 4,426 positions by 2019. The jobs must have a minimum annual salary of $35,000 and an average salary of at least $55,000. The contract calls for Tesla to collect $10.5 million of the incentives in 2019, after it has hired most of the workers.
The company has already made most of the hires, according to Tesla. The state is measuring from a base of about 6,500 jobs, but the automaker said Tuesday that figure is already out of date. It now has more than 9,000 workers in California.
That makes Tesla the state’s largest manufacturing employer, said company spokesperson Ricardo Reyes.
The state committee also gave tax breaks to several Los Angeles based companies, as part of an overall $49.8-million tax awards package.
Among the others was Riot Games, an online videogame developer, which will receive $3 million. Santa Monica-based Beachbody will receive $2.3 million. Manhattan Beach’s Skechers shoe company is in line for $1.1 million.
The committee approved credits for 63 companies, which together will create a projected 11,340 jobs and generate over $3.4 billion in investment across California, the office said.
So far this year, including Thursday’s tax breaks, the committee has awarded $150 million to 212 California companies, which is projected to result in 30,000 new jobs.