"Elon Musk, the CEO of Tesla, serial entrepreneur, space voyager, and recent LA tunnel digger has also been remarkably successful negotiating and securing nearly $5 billion in state tax credits.

According to the LA Times, Musk's companies, Tesla, SolarCity, and SpaceX, together have secured nearly $5 billion in government support.

Within the last few months, Musk announced his intention to build more lithium-ion batteries. If we learned anything from the first $5 billion battery factory, we know Musk is a master negotiator. And in the words of Marvin Gaye, "negotiating means getting the best of your opponent" and Musk does exactly that.

Back in 2014, Tesla announced plans to build its first massive battery plant. But Telsa did not build its factory down the road from its Palo Alto headquarters, as most businesses do. They took their show on the road asking for $500 million in cash up-front. The result, a bidding war among several states and Nevada coughing up $1.3 billion in transferrable tax credits and various other tax abatements over 20 years to win the largest incentives package in Nevada's history.

In 2016, New York followed suit. The state of New York and local authorities collectively approved a $750 million incentive package through the Buffalo Billion and other state resources to construct a solar panel factory in Buffalo for SolarCity. SolarCity also received nearly $500 million in direct grants from the Treasury Department.

SpaceX, while still in infancy stage, negotiated $15 million support from the Texas Enterprise Fund and Spaceport Trust Fund to construct a launch facility in one of the country's poorest cities, Brownsville, Texas.

Ashlee Vance, author of Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future, was quoted saying, "Musk has proved so adept at landing incentives that states now compete to give him money. She further added, "As his star has risen, every state wants a piece of Elon Musk."

While every state is trying to get a piece of Elon Musk, every business owner can get a piece of state and local incentives too. While it may be unlikely to score a billion-dollar incentive package without investing billions in capital and adding thousands of jobs, you can however secure incentives based on the need of the project. Elon Musk said it best, "What the incentives do is they are catalysts. They improve the rate at which a certain thing happens." Don't hesitate to reach out to state and local economic development agencies to negotiate your catalysts too.

Published on: Jul 11, 2017