California Lawmakers Set to Adjourn Without Incentives for Tesla

Aug 30, 2014 12:21 am ET

Aug. 30 (Bloomberg) -- California lawmakers are set to adjourn for the year without coming up with incentives to entice Tesla Motors Inc. to build a $5 billion battery plant in the most populous U.S. state.

Lawmakers in Tesla’s home state prepared a bill to be the vehicle for an incentives package, but as the legislative session headed for its close tomorrow, there was no agreement on what inducements to include.

The electric-car maker is pitting California, Nevada, Texas, Arizona and New Mexico against each other for the factory and its 6,500 jobs. Tesla co-founder Elon Musk has said he expects the winning state to provide about 10 percent of the cost, which would translate to $500 million in incentives.

“The administration continues to engage in productive conversations with Tesla and remains optimistic that we can reach an agreement that meets our common goal of adding jobs in California,” Mike Rossi, senior adviser to Governor Jerry Brown, said late yesterday in a statement.

Liz Jarvis-Shean, a spokeswoman for Tesla, declined to comment.

Tesla, based in Palo Alto, said it needs the so-called gigafactory in operation by 2017 to supply lower-cost lithium- ion batteries for its cars and home-power storage devices.

Winning the plant would be a coup for California, which has lost manufacturing jobs to states with lower taxes and less regulation.