Tesla has not been able to live up to its promise
Tesla Motors Inc. has been in the limelight since quite some time now due to its Gigafactory. The company had initially vowed to create employment opportunities and bolstering income for the residents of Nevada. However, the automotive giant has failed to achieve its goal as of yet.
Before the company initiated the construction of the massive battery manufacturing plant, Mr. Elon Musk, the Chief Executive Officer of Tesla claimed that this new venture would assist in generating more than 700 jobs and will contribute to more than $40 million in the wages of workers by the end of the fiscal year of 2015. Ironically, the claims made by the executive were merely rhetoric. As per CNET, less than 100 people have been hired by the company and the payment made by them in terms of salary is only $3 million.
Tesla’s Gigafactory is said to be the largest production facility that is known for manufacturing batteries particularly for the upcoming EV models. The electric car giant has collaborated with Panasonic that has promised to invest $1.6 billion in the factory. The platform has already started to manufacture stationary storage battery packs. The company will soon initiate the battery production process that will be used in the upcoming EV models of TSLA.
It now needs to be noted that the automotive giant has got tax concessions that accumulate to $1.3 billion for its Gigafactory venture. The government in Nevada has approved massive tax incentives since the company made a commitment to bolster the state economy. As per the initial promise, the company will contribute $100 billion in a time span of 20 years claims Bloomberg.
So if Tesla cannot push its revenue stream and does not comply to its promise of creating employment opportunities in its Gigafactory then they will be liable to pay all the tax concessions they have enjoyed to date. This will certainly not support the company’s dream of becoming the largest EV players in the market.
The company is likely to come up with the initial phase of the Gigafactory this annum, but at present the hiring rate is very slow thus the launch can be delayed similar to the scenario that aroused during the launch of Model 3.
Tesla stock is currently trading at $193 which has gone down by 5.70% due to the slide in the global market along with crude oil sink that occurred in United States that has become the lowest since May FY03.
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