EZ Policy Blog

Last year I wrote about electric car manufacturer Tesla Motors‘ decision to locate its new facility in Albuquerque instead of the Pittsburg Enterprise Zone.

Today Motor Trend reports that Tesla has been wooed back to the Golden State:

Like a major-league baseball team threatening to leave for a new city out West unless its rundown, depressed hometown builds a shiny new stadium, “zero-emissions” carmaker Tesla Motors was looking to move its fledgling electric auto manufacturing to New Mexico. California has come through with the equivalent of Baltimore’s Camden Yards. It will waive the sales tax for Tesla’s investment in business equipment, resulting in “millions of dollars in savings,” governor Arnold Schwarzenegger announced Monday. “If they choose to build their factory in an enterprise zone, they’ll save millions more,” he says.

The Governor made a presentation at Tesla, here is the full video of the event and press release. Of particular interest is the description of this brand new tax incentive in California:

Last Wednesday, CAEATFA [California Alternative Energy and Advanced Transportation Financing Authority] approved a new program that exempts new ZEV [Zero Emissions Vehicles] manufacturers from paying sales and use tax on the purchase of manufacturing equipment to encourage ZEV manufacturing in California. For Tesla, these incentives will mean millions of dollars in savings when the company invests in building their new plant in California. And if they choose a city that is in an Enterprise Zone, they will save millions more. Tesla will also be eligible for at least $1 million in Employment Training Panel Workforce Development Funds to train employees.

Gov. Schwarzenegger at Tesla Motors from Max Shenker on Vimeo.


It’s nice to hear the Governor promote the Enterprise Zone specifically. And another nugget from the speech transcript:

Now, last year it looked like Tesla Motors would build its electric cars in New Mexico. Now, you have to understand, I myself bought one of the first Tesla cars and so for me to see this company build a manufacturing plant in New Mexico drove me absolutely insane. But, the fact of the matter is my good friend, Bill Richardson, offered better incentives than we could offer here in California and so, therefore, they were thinking about going with a plan through New Mexico.

So, we left no stone unturned and we started going to work and thinking and thinking, what can we do, what other incentives can we offer?… And we were sitting down and we came up with all kinds of great ideas for business incentives to attract companies like Tesla that make zero-emission vehicles here in California, because we both want these cutting edge companies not just to start here in California, do research and development in California, but actually manufacture here in California.