Landing the coveted Tesla "gigafactory" won't be as much of a coup as states are making it out to be, a public policy coalition said Tuesday in an open letter.
Nevada, Arizona, New Mexico, Texas and California are competing to be chosen as the site for Tesla's planned $5 billion lithium-ion battery plant, tempting the company with tax breaks and incentives, the San Francisco Chronicle reported.
The plant is expected to bring 6,500 jobs and boost the local economy of the chosen state, but the open letter argues that benefiting Tesla with tax breaks could actually hurt in the long run.
"[R]ecently our states have been pitted into a race to the bottom from which no real winner may emerge. Tesla Motors' proposed 'Gigafactory'--undoubtedly a valuable source of economic growth for its eventual home state--has been offered to you in an unusual public auction, with the opening bid set at $500 million in subsidies," said the letter, which was signed by the nonprofit California Budget Project and five other policy groups.
The coalition advocated for cooperation between states rather than competition, saying that each state is at risk of losing valuable funding for schools, roads and other public needs; however, the letter failed to outline specific ways states could work together as only one site can ultimately be chosen.
Texas has reportedly offered $800 million in subsidies in its attempt to score the Tesla plant.
Elon Musk, Tesla founder and CEO, said in late April that the company would break ground in at least two states. He hasn't yet specified which state will be the official site, but Tesla has broken ground in a Reno location that may or may not become the battery plant.
"What we're going to do is move forward with more than one state, at least two, all the way to breaking ground, just in case there's last-minute issues," Musk told Bloomberg Businessweek in April. "The No. 1 thing is we want to minimize the risk timing for the gigafactory to get up and running."
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