Sep 02, 2014 04:00 PM EDT
Tesla Deals High-Stakes Poker Game As States Compete for 'Gigafactory'

Five states are still vying for the coveted Tesla battery plant, essentially playing a game of poker with subsidy incentives for chips.

Nevada, California, Texas, Arizona and New Mexico all remain in the running, continuing to woo the electric carmaker even after Tesla CEO Elon Musk set a minimum of $500 million in subsidy packages over the summer, the Associated Press reported.

"You can't see any cards at all. Do you stay in or not, push more chips onto the table or fold?" said Kim Hill, an incentives researcher with the nonprofit Center for Automotive Research in Michigan, as quoted by the AP.

The $5 billion Tesla "gigafactory" will purportedly reduce the company's lithium-ion battery costs by a third while boosting the local economy wherever it's built. After being completed, the facility is expected to employ 6,500 workers.

The AP has a breakdown of each state's strengths including tax breaks, worker subsidies, relaxed environmental laws and other advantages.

Nevada has few taxes and provides subsidies for worker training of as much as $1,000 per employee, provided the company matches it by 25 percent, makes a five-year business commitment and pays at least hourly minimum wages.

Tesla's home base of California may relax strict environmental regulations to speed up the factory's building process if the Golden State is chosen. California also provides certain tax and hiring credits as well as a sales tax exemption on the first $200 million worth of equipment purchased.

Already a Tesla connection, Texas has given $15.3 million in incentives to Musk's commercial space venture SpaceX, which is developing a facility in the state. In other appealing qualities, Texas "cities and counties have made direct pitches to Tesla, highlighting for example how San Antonio owns its own utility and can provide solar and wind energy," the AP reported.

New Mexico's perks include worker-training subsidies that cover as much as 75 percent of new worker salaries for six months, while Arizona provides job training grants, tax credits for new facilities and property tax breaks for certain zones.

An open letter from a public policy coalition recently urged the states to reconsider their bids, saying that benefiting Tesla with millions in tax breaks could hurt in the long run. 

Musk has said that the company will break ground in two locations to ensure that a site is ready for the plant; so far, Tesla has begun developing a site in Reno, but the facility could end up being built elsewhere.

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