September 10, 2014 / 5:28 AM / in 3 years

Nevada lawmakers gathering for special session on Tesla tax breaks

CARSON CITY Nev. (Reuters) - Nevada lawmakers are set to convene a special legislative session in Carson City on Wednesday to consider a package of tax breaks estimated at up to $1.3 billion aimed at cementing a deal with Tesla Motors Inc TSLA.O for a $5 billion battery plant.

A Panasonic Corp's lithium-ion battery, which is part of Tesla Motor Inc's Model S and Model X battery packs, is pictured with Tesla Motors logo during a photo opportunity at the Panasonic Center in Tokyo, ahead of the 2013 Tokyo Motor Show, November 19, 2013. REUTERS/Yuya Shino

Nevada Governor Brian Sandoval announced September 4 that the California-based electric car maker had chosen Nevada as the site of its lithium ion battery factory.

Lawmakers said on Tuesday they were heading to the state capital, even though Sandoval had still not issued the formal proclamation outlining the parameters of the special session.

“The governor has ordered us to the state Capitol,” State Senator Kelvin Atkinson, a North Las Vegas Democrat, said on Twitter.

Japan’s Panasonic Corp 6752.T will produce lithium ion cells for battery packs and will fund part of the cost of the plant, which is considered an important part of Tesla’s ambitions of taking on major automakers. California, Texas, Arizona and New Mexico were also in competition for the plant.

The state of Nevada said it would give Tesla more than $1 billion in tax breaks and abatements over a 20-year period in a package subject to approval by the state’s legislature.

Tesla Chief Executive Officer and co-founder Elon Musk has said Nevada’s offer to Tesla “was not the biggest incentive package” but said that the state was picked because it “can do things quickly” and “get things done”.

The electric car maker says the battery plant in Storey County, about 15 miles east of Reno, Nevada, will crank out cheaper and more efficient battery packs for Tesla’s future cars, including the $35,000 Model 3 that is due in 2017.

Specifics on the bills were not available on Tuesday.

Critics argue the giveaways amount to corporate welfare and question the governor’s claim that Nevada would reap $100 billion in economic benefits over 20 years.

Reporting by Sandra Cherub in Carson City, Nevada; Editing by Eric M. Johnson and Jeremy Laurence

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