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Inside Tesla's Texas-sized tax break

A Texas county has approved a monster tax break for Tesla, if it builds its next factory there. Yahoo Finance's Dan Howley discusses with the On the Move panel.

Video Transcript

- Welcome back to Yahoo Finance. If the iconic car maker, Studebaker, got a $14.7 million tax break in the early 1960s, they may still be around today. But they didn't. Tesla got one, though. Dan Howley is here to tell us more about that, and why Texas is throwing out the money.

DAN HOWLEY: Yes. Texas-- Travis County wants to offer that $14.7 million loan-- sorry, tax break-- to Tesla, basically to get them to build their $1 billion Gigafactory in the location. And that Gigafactory would be tasked with building out Elon Musk's Cybertruck, which-- I don't even know how to describe how it looks. Transformer meets childhood drawing, I guess, of what a truck should look like. But that's what that factory would be tasked with building.

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It's gotten a lot of boosts from locals in the area who want to bring in the jobs that the factory could bring, but there also has been pushback related to how Elon Musk treats workers, the fact that he kind of downplayed COVID 19, he opened up the Gigafactory in California before it was okayed by health officials there, or by elected officials there.

So there's conversations going there about how fair he treats his workers. He does say that low level workers would be able to make $15 an hour. That's minimum wage. But there's nothing been signed specifically saying that in a contract or anything so far, and basically, what's happening here is Texas is just trying to get this factory built in the state. Oklahoma-- Tulsa-- is also trying to get this Gigafactory built there.

But look, it's a huge factory that would bring in tons of jobs to the area, not only the actual folks who would work at Tesla, but the ancillary businesses, the construction businesses, local suppliers, local eateries. Everybody would see a boost from this. But just like you said, that $14.7 million number, that's a lot to swallow for something that is now one of the richest car makers in the world.