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Why Nevada has become ground zero for EV manufacturing

Beginning around 1910, the Great Migration saw millions find new lives and opportunities in the innovative, world-changing car factories of Detroit. Could Nevada repeat that tale for the 21st century?

The state has just approved a $335 million incentives package for Faraday Future, a Chinese electric car start-up backed by Jia Yueting. The billionaire owner of Leshi Television made his fortune in online videos, and now aims to bring an EV to showrooms by 2017, with a concept set to be unveiled at the Consumer Electronics Show in a few weeks. After rejecting sites in California, Georgia and Louisiana, Faraday is placing a $1 billion bet on North Las Vegas for a factory, which Yueting says can bring 4,500 jobs.

Nevada is suddenly positioned to become a locus of the American EV industry.

It's the product of a unique combination of circumstances. The state not only has raw lithium reserves, but also affordable housing and wide-open desert spaces and tax breaks. The deal to lure Tesla was unprecedented in U.S. corporate history: $1.25 billion in incentives; zero sales tax for 20 years, alone worth $725 million; no payroll taxes for 10 years; a decade's worth of property tax abatements; and even a big discount on electricity. The state will also kick in another $100 million on infrastructure improvements, including linking the I-80 freeway and U.S. Highway 50 to the factory in Storey County. Slated for completion before 2020, the $5 billion plant would be one of the world's largest buildings, and by far the biggest battery maker. Musk says the place will create 50 gigawatt-hours of lithium-ion battery cells, enough to supply 500,000 EVs a year. That's more lithium-ion energy than the entire world produced in 2014.

Nevadans may one day consider this deal of the century. Or, the whole thing goes belly up, and residents end up with the world's largest laser-tag facility. Governor Brian Sandoval, naturally, prefers the former.

"I am grateful that Tesla saw the promise in Nevada," Sandoval said when the deal was announced last September. "These 21st century pioneers, fueled with innovation and desire, are emboldened by the promise of Nevada to change the world. Nevada is ready to lead."

Tesla's plant could employ more than 6,500 workers at an average $25 an hour, and that's catnip to any politician. Nevada believes the carbon-neutral factory will boost regional employment by 10 percent and state employment by 2 percent. The state's estimate, perhaps unduly optimistic, also figures $100 billion in economic impact over 20 years, including $370 million a year in direct wages. One hand washing the other, Tesla promised to hire half its employees from the local workforce and give $37.5 million to state K-12 education, plus $1 million for battery research at UNLV.

This article was written by Lawrence Ulrich for The Drive , and you can read the rest here. It is reprinted here with permission.

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