Las Vegas Sun

March 19, 2024

EDITORIAL:

How Tesla, UNLV supercomputer are reshaping Nevada

For all of the praise within Nevada about the state’s deal to land a Tesla Motors car battery factory, there has been as much criticism from outside the state that the cost is too high.

The headlines certainly made it look like the plan proposed by Gov. Brian Sandoval and approved by the Legislature was a steal for the electric carmaker. The focus was that Tesla won more than $1 billion in incentives and tax breaks to build its lithium battery “gigafactory” near Reno.

The deal, however, doesn’t give Tesla a blank check. It allows Tesla to qualify for tax breaks and incentives if the company makes certain investments in the state. Tesla’s investment will be significant, and there are several other potential benefits from the deal.

Direct impact

Tesla must invest $3.5 billion within 10 years to qualify for the tax breaks — an investment that will ripple through the economy. The automaker also is expected to employ 6,500 people at the plant. The state expects the creation of about 20,000 total jobs related to the factory over the next two decades.

If that doesn’t sound like a huge number of jobs, consider that every worker spends money to the benefit of other Nevada businesses.

Mining

Expect an increase in mining due to the gigafactory. Tesla makes lithium batteries, and the lithium will be mined in Nevada. That means more workers for the mines — and those are typically high-paying jobs.

Education

This is a chance for Nevada’s education system to step up and push STEM curriculum — science, technology, engineering and math — because Tesla will need educated and skilled workers. Although Nevada has shown signs of improving, the state has lagged behind in these fields.

The arrival of Tesla and the presence of companies such as computer network maverick Switch Communications, which will host a new supercomputer at UNLV, should give educators motivation to push the Legislature to help fund programs that will create the type of workforce needed to compete in the 21st century.

Taxes and business

The big concern among critics is that Tesla’s tax burden will be passed off onto other businesses and tourists. That’s a legitimate concern.

However, if Nevada were to have taken a pass on the Tesla deal, it wouldn’t have gained anything. And Nevada has the ability to charge Tesla taxes if the company fails to live up to its end of the deal.

Beyond that, the creation of new jobs and additional businesses will help spur further economic growth and a larger tax base.

As well, the deal was written broadly. Other manufacturers will be able to take advantage of the Tesla deal, provided they are able to make similar investments, and that would be good for Nevada by bringing more big employers to the state.

The bottom line

Despite the criticism, this wasn’t a hard sell to people in Nevada. The state wouldn’t see any new jobs if Tesla had decided to go elsewhere.

Now, Nevada has the potential to grow with Tesla by improving education and spurring other businesses forward. With other high-tech companies, including Switch, Nevada is developing a reputation as a top-tier destination for cutting-edge business. Altogether, that should be seen as a big win for Nevada that gives us momentum to grow our technology sector.

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