Tesla Is in Trouble with Travis County, Texas

In 2020, Travis County, Texas, promised Tesla a wonderful treat: 20 years of tax rebates for the company’s massive Texas Gigafactory, which was yet to be built there at the time. Presently, that rebate is under review, according to the Austin American-Statesman, because Tesla is allegedly not handing over certain data it originally agreed to provide.

Travis County is the county that includes Austin, and if you can cast your mind back to 2020, you may be able to recall some of the context for this. CEO Elon Musk was angry at the existence of Covid-era restrictions in Alameda County in California’s Bay Area, where his Fremont Tesla plant was located. “If we even retain Fremont manufacturing activity at all, it will be dependent on how Tesla is treated in the future,†he tweeted in May of that year.

For the record, yes, he did keep the Fremont factory open, but two months after that threat, he announced he was building a Texas Gigafactory. Then that December, he moved Tesla HQ, and himself to the Austin area. He moved the legal base of Tesla to Texas in 2024. And now Tesla is truly a Texas-based company—with Musk slowly moving his whole portfolio of companies there too.

This is all a sort of reconciliation, by the way, after Musk tried to make Texas love him in the 20-teens. He failed to win Tesla-friendly policies in Texas all the way back in 2013, and in 2014, he chose Nevada as the location for a Gigafactory over Texas.

But in 2020, as he was shifting culturally to the right, and explosively ending his long romance with California, Travis County made him a tax deal: Tesla would get a 70% rebate on property taxes provided it invested $1.1 billion in Travis County. The rebate would climb to 75% for taxes related to the climb to an additional billion dollars of investment, and then it would mature to 80% once investment exceeded $2 billion. Per the American-Statesman, Tesla also had to create a certain number of jobs at certain wages, make certain investments in the area, and obey all federal and state regulations.

Margaret Gómez, a Travis County commissioner tells the American-Statesman Tesla has not furnished the county with documentation to prove it has hit its benchmarks in keeping with the rebate agreement. In fact, the company is trying to “wiggle out of†this obligation according to the helpful wording Gómez provided. “They don’t have this, they don’t have that. Well, a company like that should be good at keeping records and telling you exactly what they’ve achieved,†she continued, according to that report.

A Wall Street Journal article from about a year ago may offer some insight. Bearing in mind that Tesla may jeopardize tax rebates if it violates state and federal environmental laws, it could be notable that according to the Journal, Tesla “dumped toxic pollutants into the environment near Austin for months†in 2022. A furnace door in the plant was reportedly stuck open, “spewing toxins into the air and raising temperatures for workers on the floor to as high as 100 degrees“ and “Hazardous wastewater from production—containing paint, oil and other chemicals—was also flowing untreated into the city’s sewer, in violation of state guidelines.â€

A local attorney, Amanda Marzullo, told the American-Statesman, that Wall Street Journal story points to potential violations, but that she thinks the county made too loose of a deal with Tesla. It should “renegotiate with an eye toward creating a contract that’s more robust,†she said.

If it sounds like Marzullo is playing politics, she is. The American-Statesman says she’s part of the Tesla Takedown protest movement, and is running for a commissioner seat.

The stakes of this review are high for Tesla. Per the American-Statesman, no rebate funds will come the company’s way until the process is complete.

Gizmodo reached out to Tesla for comment, and will update if we hear back.