Dive Brief:
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Tesla Motors has received and sold about $20 million in tax credits from Nevada associated with its battery factory there, according to the Associated Press. The exact amount was undisclosed.
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Tesla confirmed it sold the credits to casino company MGM in an arrangement first reported by local blog This is Reno. The sale allows Tesla to generate cash from the tax credits, which MGM uses to pay gambling fees to the state.
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The $20 million in credits is part of a larger package that Tesla was able to secure as part of its agreement to cite its $5 billion “gigafactory” in Nevada, slated to open July 29.
Dive Insight:
The massive size of Tesla’s Nevada battery factory has been hailed as a pivotal change in the battery market that could cut costs by more than 50%. Jefferies analyst Dan Dolev expects prices for Tesla battery packs to reach $125/kWh when the factory hits peak production.
The factory is also large enough to have a big effect on the state’s economics, which explains the heated competition for the factory. Four states — Arizona, Texas, New Mexico, and Nevada — were finalists for the factory, according to The Verge.
The factory, which is a collaboration between Tesla and Panasonic, is expected to have a $100 billion impact on Nevada's economy over 20 years.
The factory will produce batteries for Tesla’s electric cars, as well as its Powerwall residential batteries.
One of the selling points Tesla used when bargaining with states in the citing process was the promise that the factory would employ 6,500 people at peak production. Tesla has said 369 people are working at the factory, while an average of 599 construction workers were at the site in the first quarter of 2016.
However, in February media reports said that 350 union workers walked off the job to protest substandard wages. According to those reports, Tesla said it has been following state requirements for hiring its contractors.