Tesla is coming to Austin area — car company picks Texas site for second US vehicle assembly plant

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AUSTIN (AP/KXAN) — Tesla has picked the Austin area as the site for its largest auto assembly plant employing at least 5,000 workers.

The company will build on a 2,100-acre tract in Travis County and will get more than $60 million in tax breaks from the county and a local school district.

In a Wednesday afternoon meeting, CEO Elon Musk said:

“We’re going to be building our next Gigafactory in Texas. Right near Austin. We’re going to make it a factory that’s going to be stunning.”

Elon Musk, Tesla CEO

The new factory will build Tesla’s upcoming Cybertruck pickup. It also will be a second U.S. factory for the Model Y small SUV.

Last week, the Travis County Commissioners Court voted to approve a tax incentive deal with Tesla — a reported investment of $1.1 billion in the first five years that would lead to a 70% rebate on Operations and Maintenance taxes.

These tax incentives are in addition to those that the Del Valle Independent School District approved earlier in July, which will allow the company to build on land within the district.

The incentive agreement will allow Tesla to save money on its property tax bill paid to the school district — more than $68 million — by capping the property value for 10 years.

Tulsa, Oklahoma, also showed up on the short list for potential sites in mid-May.

In addition to the factory, Musk also added that the Gigafactory would include a “ecological paradise” environment around it, similar to a park.

“We’re going to have a boardwalk with a hiking and biking trail. An ecological paradise. It’ll have a hiking and biking trail and a stream,” said Musk. “And it’ll be open to the public.”

Tesla doesn’t have a lot of time to get the factory running. The company says on its website that the Cybertruck will be available starting late next year.

Rick Levy, president of the Texas – AFL-CIO says with the use of public money, accountability is a must. Of the 5000 jobs announced, he wants to know how many will be permanent and which jobs will benefit the community in the long run.

“I think everybody agrees that we could certainly use good-paying, middle-skilled level jobs in the Austin-area, particularly in East Austin-area,” said Levy. “Our concern is that we don’t think the state government and the county government have really used all the force that they can to really make sure that the jobs being brought in, are in fact good jobs. We’ve been unable to get a real number about how many permanent jobs there will be and whether they will be temporary jobs and if people can get sustainable wages.”

Texas reactions

Gov. Greg Abbott:

“Tesla is one of the most exciting and innovative companies in the world, and we are proud to welcome its team to the State of Texas. Texas has the best workforce in the nation and we’ve built an economic environment that allows companies like Tesla to innovate and succeed. Tesla’s Gigafactory Texas will keep the Texas economy the strongest in the nation and will create thousands of jobs for hard-working Texans. I look forward to the tremendous benefits that Tesla’s investment will bring to Central Texas and to the entire state.”

Austin Mayor Steve Adler:

“Tesla moving to Austin is exciting. It gives us three things we need in east Austin. It gives us thousands of good wage jobs that don’t need a 4-year degree. Its factory will be better for people and the planet. It’s an important economic boost in east Austin, especially as we fight the economic effects of the virus. This new opportunity will help our city be more fair for everyone who lives here. I look forward to working on and resolving the issues leading to final city approval.”

The Greater Austin Chamber of Commerce:

“Tesla’s decision to locate its newest Gigafactory in Austin will expand and enhance our innovative culture while also providing new and exciting career opportunities for all segments of our Central Texas workforce. The company’s pioneering spirit and advanced manufacturing technologies will be instrumental in our region’s economic recovery and our sustainable growth for the longer term.”

What will Tesla bring to the Austin area?

In a Travis County-funded “performance agreement,” analyst Jon Hockenyos found that the plant would create at least 5,000 middle-skill jobs and could possibly add over 4,000 new non-Tesla jobs due to secondary effects.

Hockenyos says that the unemployment rate in Travis County “skyrocketed” from 2.2% to 12.4% in April 2020. He says when taking furloughs and reduced hours into consideration, the real unemployment rate is likely closer to 25%.

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