Tesla Motors, Inc. (NASDAQ:TSLA) Wants Subsidies of $500 million

Tesla Motors, Inc. (NASDAQ:TSLA) has seen some progress in the construction plan of its Gigafactory. It is important to note here that the gigafactory will have supercharger stations in it, and almost 5 States have been contesting for the construction project.

Recently a number of monitoring companies, including Good Jobs First, have written letters to all the 5 States, asking to provide some tax reliefs and incentives to the auto company in order to lure it.

According to the monitoring company, all the 5 States should organize an auction where the auto maker will be offered subsidies and incentives, starting from an opening offer of subsidies worth $500 million; the winner will get the contract.

Good Jobs First is based in Washington, D.C., and it assesses the subsidy deals that the government provides to different companies.

However, the budget watchdogs, including the Progressive Leadership Alliance as well as the California Budget Project, are of the opinion that the government should avoid allowing too much subsidies and excessive tax breaks.

All the 5 States are trying hard to get Tesla, for the construction project of gigafactory is not only worth $5 billion, but it will also create almost 6,500 jobs in the manufacturing sector. These jobs not only provide better wages than the service sector jobs, but they also come with benefits.

Although Tesla Motors, Inc. (NASDAQ:TSLA) had its ground breaking ceremony for the gigafactory in June this year near Reno, Nevada, but the company announced that the final location of its factory is not decided yet for there are a number of approvals that the company needs to get before it can finalize the location of its gigafactory.

The company plans to organize three ground breaking ceremonies at 3 different potential locations so as to avoid any further delays. The company expects the project to start by the end of the year 2015 and end by the year 2017.

The States of California, Arizona and New Mexico are contesting for the Tesla deal; all the 3 States are offering incentives in order to lure Tesla towards the respective State.

Sources have it that Tesla Motors, Inc. (NASDAQ:TSLA) wants the State to bear the burden of almost 10 percent of the total expenses of Gigafactory. According to the market analysts, only Texas and California can get the deal now for they are the only States that have enough budget and tax bases to cover 10 percent of the expenses.

The company currently has a #1 Zacks rank on its stocks, with a consensus rating of ‘Buy’.

Coming to the stock prices of the company, Tesla Motors, Inc. (NASDAQ:TSLA), on the last trading day, August 27, 2014, started its stocks at a price of $263.50 and closed at a price of $263.25, after hitting the highest figures of $264.24. The company has a market capitalization of $32.62 billion with a beta of 1.36. As far as the EPS (earnings per share) of the company is concerned, the figures are recorded to be around -$1.11.