Commissioners in Travis County, home to Austin and the possible next Tesla factory approved Tuesday property tax breaks worth at least $14.7 million and potentially more over 10 years. The incentives are on top of $46.6 million in property tax abatement.
News of the approval pushed Tesla shares 3.5% higher in after-hours trading.
Under terms of the agreement with Travis County, Tesla must invest $1.1 billion in the new factory within the first five years. In exchange, Travis County will rebate 70% of the property taxes Tesla will pay. Once Tesla’s investment in the factory eclipses that $1.1 billion mark, the property taxes rebates will increase to 75%. Any investments in the factory beyond $2 billion, will give Tesla 80% in property tax rebates.
Travis County has estimated that a $1.1 billion investment by Tesla would generated $8.8 million in new tax revenue over a 10-year period, a figure that takes into account the property tax rebates.
Musk tweeted in March that the company was “scouting” locations to build a new U.S. gigafactory that will produce the Cybertruck and Model Y crossover.
Tesla has promised Texas officials it will employ at least 5,000 people. About 25 of those workers are categorized as “qualifying” jobs and would be paid a minimum of $74,050, while the remaining would be middle income jobs with an annual salary of $47,147.