Tesla Incentives Come to About $10M, Says Calif. Treasurer

Why is Tesla putting its sedan factory in California? There are ten million reasons.

The incentives provided by the State of California to the car company come to about $10 million dollars, state Treasurer Bill Lockyer told me. Most of the incentives come in the form of tax holidays. (I had to duck under some black and yellow caution tape to talk to him, but he was downright polite. Didn’t call security or anything. Glad I voted for him.)

Financial incentives are a key part of hardware manufacturing and many other parts of the tech world. Intel and other chipmakers regularly shop the world for tax breaks and other incentives. And in many countries, they are willing to oblige. Dubai gives companies 50 year holidays from corporate income taxes. In Taiwan, some profitable chip companies make more money after taxes because of accumulated credits. For biotech firms, Singapore is an open checkbook.

Thus, although $10 million could certainly help many other government divisions in the state, it’s not outrageous. Besides, the theory is that it will bring jobs to the state. Nonetheless, feel free to feel queasy about millions in benefits going to a company staffed with actual and soon-to-be millionaires. If you ever hear a Tesla employee complaining about government handouts and state interference with the free market, remember this grant.

The provision, by the way, is part of a bill that was passed ages ago, Lockyer told me. It was just never implemented.

The state will also give tax breaks to people who buy non-polluting cars.