[alexmarcy]

The problem I have with Musk's use of government money is that his companies most reliant on the money are still reporting net losses after being in business for a decade. Maybe in the "start-up" world of hoping to make a big exit he is successful, still, I don't know how anyone can call this Musk being successful. Maybe he will be down the road, but I don't see it that way.

I'm originally from Reno NV, which will be directly impacted by the gigafactory. I think NV took a huge gamble on the tax incentives there, including cutting huge amounts of funding for other, much more diverse industries. As NV has seen, focusing on one or two extremely unstable industries (gambling and mining) can quickly put you in a bind when things go south, the economy, price of rare metals, etc. They are simply banking on Tesla as a third pillar of industry, one without a track record of returning on its investment in the form of profits. If things continue on the same track they have been with Tesla, I don't see NV getting a very good return on investment in the long run.

Also, no one is taking into account the skilled manufacturing workforce (or lack thereof) in Reno, the existing manufacturing going on there, and the fact that either people will need to either come from out of state, or be poached from just about every manufacturing company in the area to supply Tesla's workforce requirements. If manufacturing in Reno is brought to its knees to support Tesla how is that any better than not having Tesla there in the first place?

Finally, the location of the gigafactory is going to lead people to live in Reno, but the factory is in a different county. Therefore the burden of all of the extra children, traffic, government services, etc., will be focused in an area not receiving any money from the overall package for those services.

While I hope someone besides Musk and his shareholders can take part in the upside of all of this investment, I personally don't see it coming to fruition anytime soon.

[jokoon]

Well, sometimes the country can't just put its trust into private investors to really accomplish something in innovation. There is already a lot of money sleeping, sometimes off shore, so I don't think it's really relevant to judge this aspect.

It's the nature of current capitalism and how big players just won't even try going towards the electric car because it's a risk for their business model. If you want to go forward, sometimes you have to force your hand, and it involves using government money. You could also argue that putting a flag on the moon is worthless too. Sometimes the answer is not in accounting. Markets and money are just that, tools. You can't always think in a logic that revolves around capitalism, you have to look further than that.

[swsieber]

Of course the companies most reliant on the money are still reporting net losses. If they weren't reliant on money it'd be because they were turning a profit. So perhaps a more succinct and accurate statement is that you have a problem with government investments in long, as-of-yet unprofitable (earnings) companies. You don't like the long-shots that take a long time to potentially mature. And I probably wouldn't either if they were near my town.

[alexmarcy]

I'm not against long-shots that take time to mature, as long as those are part of a diversified investment portfolio.

The legislators gave up or severely decreased tax incentives to other industries to make up the gap. Could Tesla be worth all of that in the long run? Possibly, still, I think it would be wise to continue to invest some of the money in other ventures rather than putting it all in on Tesla.

[mc32]

I imagine NV sees this as a kind of loss leader. If they bring in Musk this, it is expected, could kick off more innovative industries which would diversify the NV economy.

The hope is, that like zappos, this could kick off more technology oriented industries to consider NV as a possible location for their business. You don't want your state to become the Rhode island --the one which does little to diversify and attract new industry.

[alexmarcy]

I agree, I'm just not sure that having to give up existing tax incentives to other industries to fund a $1.3B subsidy to one company is the way to go about generating new industry in the area.

There is a small group of start-ups in the area that seem to be doing well for themselves and every so often there is talk of Reno becoming the next Silicon Valley, so I think the SAAS sector is covered.

Reno also has Sierra Nevada Corp, which was in competition with SpaceX and Boeing on some space related ventures for whatever that is worth.

[ryanobjc]

as employees are paid in county X and live in county Y, doesn't the second county receive tax side effects from the employees? Such as property taxes and secondary spending?

Perhaps Nevada gave too much away (or not?), but the tone of your argument seems to suggest that you think NV and Reno would be better off without the gigafactory. Apart from 'they were bribed' what reasons do you think your state/county lawmakers had for making this deal? What data and evidence did they consider, and how is your opinion different?

[alexmarcy]

I don't think it would be better off without the gigafactory, I think it would be better off without such a steep investment in one company.

Sure, there will be tax and other money spent where the people live and work, but I'm not seeing how that will be enough of a boost to the economy to justify $1.3B in incentives given to Tesla, especially when their ask was for less than half of that amount.

[eclipxe]

You are seriously arguing against more jobs in an area to protect current employers?!