Tesla is likely to get $15-mil­lion tax credit

Los Angeles Times - - BUSINESS BEAT - By Jerry Hirsch jerry.hirsch@la­times.com Twit­ter: @latimesjerry

Tesla Mo­tors Inc. is po­si­tioned to get the largest tax credit grant among dozens of ap­pli­cants for a spe­cial Cal­i­for­nia eco­nomic devel­op­ment pro­gram.

Cal­i­for­nia of­fi­cials are rec­om­mend­ing that the Palo Alto elec­tric car man­u­fac­turer re­ceive $15 mil­lion of the $49.5 mil­lion in tax cred­its planned in the lat­est dis­burse­ment. A vote on the deal by the state’s GO-Biz Cal­i­for­nia Com­petes tax credit com­mit­tee is sched­uled for June 18.

Tesla has been a ma­jor con­trib­u­tor to the state econ­omy, Tesla spokesman Ri­cardo Reyes said, and ac­counted for $50 mil­lion in state tax rev­enue last year. “This award ref lects our com­mit­ment to cre­ate even more jobs and in­vest­ment in the state,” Reyes said.

Tesla and its chief ex­ec­u­tive, Elon Musk, have be­come adept at tap­ping gov­ern­ment money to sus­tain the busi­ness.

A re­cent Los An­ge­les Times anal­y­sis of sub­si­dies for all three com­pa­nies headed by Musk — Tesla, So­larCity Corp. and Space Ex­plo­ration Tech­nolo­gies Corp., or SpaceX — found that the com­pa­nies have re­ceived or se­cured com­mit­ments for $4.9 bil­lion in gov­ern­ment sup­port. Tesla ac­counted for al­most half of the to­tal.

This lat­est tax credit con­sid­ered by Cal­i­for­nia is tied to job cre­ation. 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 The state is mea­sur­ing from a base of about 6,500 jobs, but the au­tomaker said Tues­day that fig­ure is al­ready out of date.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.

The au­tomaker is grow­ing rapidly and is hir­ing work­ers at sev­eral lo­ca­tions in Cal­i­for­nia, in­clud­ing its auto fac­tory in Fre­mont, where it plans to add a sec­ond model to its as­sem­bly line later this year, and at its de­sign stu­dio in Hawthorne.

The Model X sport util­ity ve­hi­cle will be ready in about three or four months, Musk said at Tesla’s an­nual share­hold­ers meet­ing Tues­day.

“Get­ting those fi­nal nu­ances right for the Model X is what we are fo­cus­ing on right now,” Musk said.

Mean­while, Musk an­nounced that a small group of Model S sedan own­ers will have their cars up­dated for a test of hands-free driv­ing by the end of the month. Musk spent much of the meet­ing talk­ing about the po­ten­tial for ro­botic cars.

He said the first ver­sion of the au­topi­lot fea­ture is de­signed to shift part of the bur­den of driv­ing from the driver but not re­place the per­son at the con­trols. Tesla is aim­ing for a fully au­ton­o­mous sys­tem in about three years.

Paul Sancya As­so­ci­ated Press

TESLA MO­TORS’ lat­est tax credit con­sid­ered by Cal­i­for­nia is tied to its job cre­ation. Above, Tesla Chief Designer Franz von Holzhausen with a Model X in 2013.

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