What happened 2 decades ago that set the stage for Tesla’s move to Austin

Austin

AUSTIN (KXAN) — It was a proud moment for Texas Gov. Greg Abbott during his February 2021 State of the State Address: Tesla was moving to the Lone Star State.

“Transformational leaders like Tesla picked Texas for their next generation of innovation,” Abbott said, as the broadcast cut to the burgeoning construction site of the company’s $1.1 billion gigafactory in eastern Travis County.

Now, with Tesla’s headquarters moving to Austin, Abbott is once again touting the state’s allure when it comes to corporations looking to relocate.

“Here in Texas, we invest in our pro-business environment and work with entrepreneurs to develop and grow their businesses,” the governor said in a statement to KXAN. “Because of this, Texas continues to be a magnet for talent and innovation.”

Abbott added he even had discussions with Tesla CEO Elon Musk, himself.

Texas remains competitive, in part, because of the state tax code’s Chapter 313 Texas Economic Development Act and the often generous tax incentives that come with it. The act took effect in 2002 under Former Gov. Rick Perry. The then-governor often found himself the target of criticism from Democrats over the millions of dollars doled out in corporate tax breaks over the years.

Tesla is set to save roughly $82 million over 10 years as part of its Chapter 313 deals with Travis County and Del Valle Independent School District for the gigafactory. It remains unclear whether Musk plans to build the company’s headquarters at the same site.

KXAN spoke with the Texas Democratic Party on Friday. Co-Executive Jamarr Brown said he welcomes Tesla to Austin.

“Democrats, we’re not against big business,” Brown said. “We just want to make sure that as big business comes to a place like Austin or anywhere else in Texas, that they play by the rules.”

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