California drive to be awarded the $5 billion Tesla Motors Inc. (NASDAQ:TSLA)’s Gigafactory looks to be fading away, after legislators left last week without deliberating on an incentive package, which was supposed to be awarded to Tesla, according to the Los Angeles Times.
The move by the legislators comes as a surprise considering the Governor’s Office of Business and Economic Development had been carrying out a round of talks with Tesla Motors Inc. (NASDAQ:TSLA) with a view of being awarded the mega project. The State has prepared an incentive package, which did not go down with all involved stakeholders.
Environmentalists and other law makers argued that the state was offering too much in incentives, something that could make California vulnerable in the long term. In the proposed incentive package, the state of California had agreed to waive certain legislations under the California Environmental Quality Act, a move that would have seen a speedy construction of the plant by 2017.
Lawmakers raised an uproar after the state had hinted it was open to offering Tesla Motors Inc. (NASDAQ:TSLA) tax breaks worth as much as $500 million. It is still not clear what caused a break in talks with neither party indicating that it might have stalled the process.
A Capitol insider was quoted as sayig that Tesla Motors Inc. (NASDAQ:TSLA) was not ready to agree with the proposed package, claiming that it wanted to make sure that all pieces were in place and that it would benefit in the long run. Breakdown in talks could be good news for Nevada, Arizona, New Mexico and Texas, which are also in the run for the mega project.
Tesla Motors Inc. (NASDAQ:TSLA)’s CEO, Elon Musk, had raised concerns about the state of California cumbersome environmental regulations, which could have affected the company’s operation in the current status. California has been the most pro-active of the five states in running for the project, with its push being driven by two state senators.
Legislation aimed at further pursuing the project are expected to continue into Fall according to Senate President, Darrel Steinberg. People with inside information have expressed optimism that a deal will be struck sometime in January something that should not be of a concern to Tesla Motors Inc. (NASDAQ:TSLA).
Andor Capital Management, led by Daniel Benton, owns 1.25 million shares of Tesla Motors Inc. (NASDAQ:TSLA), worth $300.08 million.