Tesla Joins Tax-Incentive Trail for Not-Yet-Sited Model S Factory

By John Voelcker

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2012 Tesla Model S prototype

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It's starting to seem like tit-for-tat around here, as startup electric automakers Tesla and Fisker vie for--and get--federal- and state-funded loans and tax concessions to build future electric cars.

The latest salvo, mere days after Fisker announced its purchase of a former GM plant in Delaware: California will grants Tesla tax credits to nail down a Golden State site for the factory that will build its 2012 Tesla Model S sedan electric sports luxury sedan.

Somewhere in California, that is. Tesla hasn't yet announced what plant it has chosen to renovate, although the two municipalities vying for it are said to be Downey and Long Beach.

production fisker karma plug in hybrid 001

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The deal entails the State of California's Alternative Energy and Advanced Transportation Financing Authority holding title to roughly $320 million of equipment Tesla will buy to equip its factory, so Tesla can avoid sales taxes of 9 percent or more. Total value: $29 million, give or take.

One official at a government entity who asked to remain anonymous because he is not officially permitted to comment on policy worried that the announcement could become "the 'prime-the-anger-pump' news item of the day."

He noted that Tesla has yet to build 1,000 cars (though, to be fair, Fisker has yet to build one and no journalists have yet driven its 2010 Karma extended-range electric sedan).

And he worried that the general confusion among tax credits, government grants, and low-interest loan programs could lead to a perception that Tesla was being given cash by a state with truly horrifying budget problems.

Along with Ford and Nissan, Tesla received $465 million out of $8 billion allocated under the Department of Energy's Advanced Technology Vehicles program of low-interest loans earlier in the year. Last month, Fisker was granted a $529 million low-interest loan under the same program.

[Automotive News]