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Tesla Motors Inc (TSLA) Gets Love in Nevada, Faraday Future Wants Some Too

Tesla Motors Inc (TSLA) Factory Freemont, California

Tesla Motors Inc was in the news yesterday after it was reported that its Gigafactory project in Reno Nevada might not be living up to the hype. News reports has it that Tesla’s actual number of permanent jobs created in the Gigafactory has underperformed the forecasts of the number of permanent jobs that the project would create. Tesla has also not achieved the milestone on number of construction jobs created neither has it delivered the expected level of investment.

However, the Gigafactory project is crucial to Tesla’s future because it will help Tesla transform from a maker of luxury EVs to a maker of mass-market EVs. Closely behing Tesla Motors is Faraday Future, a Chinese-backed startup that is intent on challenging Tesla for the top spot in the EV space. Faraday Future is giving Tesla a hot chase as news report holds that the startup is also heading to Nevada.

Faraday Future follows Tesla Motors to Nevada

Reno Gazette-Journal reports that there was a special legislative session to attract Faraday Future to Nevada. The aim of the session was to work out tax breaks and infrastructure improvements at the area where the EV startup hopes to set up shop in the coming months. It was said that the lawmakers approved a $215M tax break for the startup. More so, they earmarked $120M for improving infrastructure at the Apex Industrial Park in North Las Vegas.

Other issues that are ironed out include terms of bonds that will be used to finance the project and environmental concerns about water use in the arid region. In the end, Nevada should benefit from the presence of Faraday Future in the city. Nevada economic development officials forecast that Faraday should have created 4,500 direct jobs and caused a $55B direct economic impact on Nevada in the next 20 years.

Despite Faraday Future’s harrying of Tesla Motors  into Nevada, the latter seems to have the better deal in Nevada. For instance, Tesla got a tax break package worth $1.3B that allows it to operate tax free for the first ten years while paying incredibly low taxes in the second decade of its operations in Nevada.

Tesla is miles ahead of the pack

The chase that Faraday Future is giving Tesla Motors echoes the sentiment in the auto industry as all the players want a piece of the EV pie. Tesla Motors brought the feasibility of electric cars to limelight with its Roadster. The firm has gone on to confirm that the Roadster was not a fluke by bringing the Model S and Model X to the market. Now, everybody knows that EVs are the next frontier in transportation. Traditional automakers and tech firms are all trying to get into the EV race as gas engines start a slow but steady journey into history.

Tesla is also planning to take EVs to the mainstream as it plans to bring its mass-market Model 3 to the market sometime in the next two years. However, Tesla’s lead in the auto space is not limited the fact that it brought the idea of EVs to the limelight. Rather, Tesla Motor’s lead in the auto space in a function of its ability to upgrade cars over the air just in the same way that tech firm’s upgrade smartphones over the air. Chris Ziegler of The Verge writes that “Every Model S and X on the road today runs the same software version, delivered over the air… Tesla is still supporting its long-discontinued Roadster with upgrade packages.”

Tesla Motors has the lead over automakers in pushing upgrades to its cars over the air in sharp contrast to the methods adopted by traditional automaker in which they introduce a new car model just to add the smallest new feature . Tesla’s over-the-air updates ensure that its cars that you buy today will still feel current, relevant and high-tech in five years.

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Adam Green is an experienced writer and fintech enthusiast. He he worked with LearnBonds.com since 2019 and covers a range of areas including: personal finance, savings, bonds and taxes.

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