Tesla Motors' battery Gigafactory took another step toward construction with the approval of incentives worth up to $1.3 billion by Nevada lawmakers.

Governor Brian Sandoval signed the package of four bills into law one week after announcing that the Silver State would host the first of what could be multiple factories that will produce lithium-ion cells on a massive scale.

By far the largest part of the incentives package is a sales-tax exemption that will last 20 years, worth an estimated $725 million, Reuters reports. In addition, Tesla could save more than $300 million in payroll and other taxes through 2024.

MORE: What Will Tesla Gigafactory Cost Nevada? How About $1.3 Billion?

Besides tax breaks, lawmakers also agreed to buy right of way to build a road between Interstate 80 and U.S. Route 50, creating better access to the gigafactory site just outside Reno. This project is expected to cost $43 million.

Project Tiger site at USA Parkway Business Park, Reno--for Tesla gigafactory? [photo: Bob Tregilus]

Project Tiger site at USA Parkway Business Park, Reno--for Tesla gigafactory? [photo: Bob Tregilus]

The incentives package will be paid in part by gutting incentives for other industries.

The legislation calls for eliminating a tax break for insurance companies that's been in place since the 1970s, and could free up $125 million for Tesla, supporters say. A pilot program of tax breaks for the film industry will also be removed, freeing up an estimated $70 million.

This concentration of taxpayer money on one company has caused some to criticize the incentives. Opponents argue that resources should be distributed more broadly.

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Yet Gov. Sandoval believes the factory--which will produce battery packs for the Tesla Model 3 electric car--could help Nevada shake off the last effects of the Great Recession.

The gigafactory is expected to create 3,000 construction jobs, 6,500 manufacturing jobs, and indirectly lead to the creation of 16,200 other jobs. It's also expected to generate up to $100 billion for the state over the next 20 years.


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