Waller County, Texas, officials have approved tax abatements for Tesla to build its newest battery storage factory in the US.
The package was approved at a meeting of the Waller County Commissioners Court yesterday (5 March). Two agenda items pertaining to the abatements were read out and voted on following a brief discussion including representation from Tesla engineering lead Shiv Mysore.
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Commissioners unanimously approved the arrangement. Tesla Inc. is leasing property in an industrial park from owner SRPF B/Empire West Phase II in a designated reinvestment zone. The property is currently occupied by a third-party logistics company.
Conditions for the first of the two abatement agreements are that SRPF B/Empire West Phase II will make improvements worth an estimated US$44 million to the planned manufacturing facility including improving its electrical grid connection capacity and heating and cooling equipment.
Meanwhile, Tesla will install manufacturing equipment with an estimated cost of US$150 million.
In the second, the property owner will build the manufacturing facility with an estimated US$31 million cost and Tesla will install distribution equipment and building improvements, including HVAC system upgrades, costing approximately US$2 million.
Commissioners welcomed the development, noting that it will bring around 1,500 advanced manufacturing jobs to the area, including over 100 jobs paying more than US$100,000 per year and more than 1,000 jobs paying more than US$50,000 per year.
The approval is conditional on the parties reaching a similar agreement with Brookshire, the Waller County city with a population of just over 5,000, where the factory will be located. The tax abatement will be null and void if Tesla or SRPR/Empire West fails to enter an agreement with the City of Brookfield.
Texas plant will be ‘identical’ to Lathrop Megafactory
CEO Elon Musk said Tesla was looking to ramp up production of its stationary battery storage production “as quickly as possible” in an earnings call to discuss Q4 and full-year 2024 financial results in January.
Musk alluded to the construction of the third plant, which follows an initial facility in Lathrop, California, and a recently constructed factory in Shanghai, China. Tesla has dubbed these plants ‘Megafactories’.
In his representation to the Waller County Commissioners Court, Tesla’s Shiv Mysore played a short promotional video for the Lathrop, explaining that the Texas Megafactory would be identical to it. The Lathrop plant’s annual production capacity at full ramp is 40GWh.
In its full-year 2024 release, Tesla said it deployed a combined total 31.4GWh of large-scale Megapack BESS units and residential Powerwall systems over the 12 months globally.
For context, that is slightly less than the 34.4GWh of cumulative installations within the US that research firm Wood Mackenzie had forecast being made last year, although it is 3.5x less than the 110GWh of battery shipments for energy storage system (ESS) applications that Chinese manufacturer and Tesla supplier CATL made last year, according to data from SNE Research.
The Texas Megafactory development follows Tesla taking its headquarters out of California and into the Lone Star State in 2021. In February, the company signed a Memorandum of Understanding (MoU) in Australia with the Western Australian government to develop a battery ‘re-manufacturing’ facility.
