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Tesla Motors Inc. (teslamotors.com) is brilliant. The electric car manufacturer company says it will build a huge battery factory, a “gigafactory.” (Gotta love that word, “gigafactory.” Wonder where it came from?)
Tesla has simultaneously and publicly dangled the deal before five states — New Mexico, Arizona, Texas, Nevada and California.
State economic developers have responded like kittens faced with a piece of yarn. The yarn comment, though a tad snarky, merely says that developers, who get paid to chase deals, are doing their jobs.
I admit to not paying huge attention to the Tesla proposal. This column focuses on the deep structural troubles affecting the entire state economy.
A report a few days ago, taken with last week’s column, adjusted that perspective. In what follows, for the sake of argument, assume an either/or situation, one choice or the other.
Tesla has finally said what it wants from the host state, basically10 percent off the top, according to an Aug. 3 Albuquerque Journal story. For a $5 billion project, that’s $500 million delivered via tax abatements, building infrastructure, job training funds, whatever, all for a gamble, a new, heavily subsidized technology.
We now have a new way of evaluating that proposal, courtesy of Rep. Cathrynn Brown, a Carlsbad Republican. Brown, as reported here last week, wants “only” $100 million for roads in our oil production areas.
The Tesla situation is the future, is speculation, a new technology that benefits the well-to-do and would put most of the goodies in one place, presumably Albuquerque.
Brown’s proposal is today.
Dirt moved in early July at the Tahoe Reno Industrial Center.
Go to the Reno (Nevada) Gazette-Journal (rgj.com) and find a nearly daily series of stories starting July 27. A July 9 story, datelined Albuquerque and courtesy of the Associated Press, features Jon Barela, New Mexico economic development secretary, saying New Mexico was still in the running for the facility. (What else could he say?)
Albuquerque has done the Tesla dance before, in 2007. That plan, which was cancelled, was for an assembly plant.
“Any U.S. buyer of a Tesla car qualifies for a $7,500 federal tax credit,” the Wall Street Journal observed in a May 23, 2013, editorial. Some states throw in more. Prosperous Colorado has a $6,000 income tax credit.
For states such as New Mexico with no additional credits, Tesla offers help. “Want to help make EV incentives a reality in your area? Encourage your local or state representative by calling or sending them a letter. Click here for to find out who to contact for your state,” Tesla’s site says.
The Tesla situation provides an ethical window on our leadership. Where are our values?
Indications are that our oil production will continue up with growth just starting in the San Juan Basin.
Rep. Brown argues that the roads are disappearing from under all that production activity, that the situation is dangerous and inefficient, and should be addressed. Brown wants execution of the state’s side of the social contract between government and the people including businesses.
Brown proposes building and maintaining roads, activity that is a proper function of government. Those roads will support, literally, an activity that today is the best and brightest sector of our economy, providing an astonishing 31 percent of the state’s operating fund, the general fund.
Tesla, its cars, and all the metal and electricity consumed in the production, might be the future. We should embrace the future, when we can, responsibly. The Spaceport, Bill Richardson’s bet on the future at half the amount of the Telsa subsidy, may yet work someday.
Brown’s road proposals are today and necessary and should be embraced.