Tesla May Have Environmental Rules Waived In California

Tesla Motors Inc NASDAQ:TSLA’s gigafactory continues to be a hot topic as multiple states vie for the automaker’s second U.S. factory. Although Tesla had been focusing on other states, California hasn’t given up its quest to attract the company’s new facility. Now there’s word that the state could let some environmental rules slide—just to get it.

California pitches Tesla

The Los Angeles Times reports that California Sen. Ted Gaines said that they may waive some of the state’s toughest environmental rules in order to attract Tesla’s gigafactory. Lawmakers in the state want to make that part of the automaker’s incentive package because it would enable it to speed up the process of getting the facility set up. If Tesla Motors Inc NASDAQ:TSLA chooses California, the automaker might receive waivers for big chunks of California’s Environmental Quality Act, which has been in force for almost 50 years.

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The Los Angeles Times reports that its sources have indicated that lawmakers are trying to limit prior environmental reviews of the site. They also said Tesla Motors Inc NASDAQ:TSLA might be able to begin construction “and mitigate any potential damage later.” California lawmakers are also said to be looking into limiting lawsuits that might slow down the project.

Some environmentalists are appalled at the possibility that these rules might be waived, especially because Tesla is seen as a green company because its electric cars do not emit greenhouse gases.

Other incentives for Tesla

California’s governor may also offer several tax breaks for Tesla Motors Inc NASDAQ:TSLA that could reach up to $500 million, which would be approximately 10% of the gigafactory’s cost. Gaines and California Senate President Pro Tem Darrel Steinberg are coauthoring the proposal that would make the incentives package part of the law. They want to get it passed by the end of this month when the legislative session closes.

The state is getting a late start on the race with Arizona, New Mexico, Nevada and Texas, all of which want to attract the thousands of jobs and big-time tax revenue Tesla’s gigafactory will likely bring. The automaker has said it expects to spend $5 billion on the facility and create 6,500 new jobs. However, CEO Elon Musk said California’s chance of actually landing their gigafactory is nothing but a “long shot.”

Tesla emphasizes timing

If California lawmakers do succeed in waiving environmental regulations for Tesla Motors Inc NASDAQ:TSLA’s gigafactory, it might be one thing that would make their bid stand out from the other states’ bids. The automaker has emphasized that timing is very important because the facility must be up and running by 2017 when it plans to start selling its mass market electric vehicle. By waiving the environmental rules, lawmakers are essentially trying to fast-track the process.