A Texas county has granted significant tax incentives to Tesla’s proposed solar factory. The board of commissioners unanimously approved the $10.1 billion project.
Tesla has received a bevvy of incentives to build a solar cell manufacturing facility in Fort Bend County, Texas. The plant, codenamed Tesla Project Crystal Sun, will receive tax relief for up to 35 years if the American company builds in the county.
The tax breaks come in four tranches. Tesla will benefit from an abatement that exempts it from or lowers property taxes for a set period. A Chapter 381 agreement may also give Tesla other incentives tied to investment and job creation.
The Foreign Trade Zone (FTZ) Non-Objection with Payments in Lieu of Certain Taxes will reduce Tesla’s customs costs when importing manufacturing equipment or raw materials. Lastly, the Payment in Lieu of Taxes (PILOT) “True Up” agreement allows the county to adjust the payment terms associated with the incentives if necessary.
Four out of five commissioners supported the incentive package. The fifth board member, interim County Judge Daniel Wong, abstained from voting to avoid bias due to an existing business relationship with Tesla.
Meanwhile, by Tesla’s calculation, Fort Bend County and Texas stand to reap nearly $6.5 billion in taxes in 38 years.
Tesla is still considering multiple sites. The company admitted an unnamed rival location outside the Lone Star State is offering a “very compelling package.”
Nevertheless, Fort Bend officials have several reasons to be hopeful. Tesla already has a production plant about an hour’s drive away in Brookshire, where it makes Megapacks (with reports that it was considering adding solar manufacturing). CEO Elon Musk did note that his company is working to integrate all production processes, including the supply chain. Locating a new site nearby in Texas makes sense from a logistics standpoint.
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