Tesla’s New York Gigafactory Deal Set for Major Overhaul—What’s Changing?

Tesla's agreement with New York State regarding its Buffalo Gigafactory is about to undergo significant changes as the current deal nears expiration. The factory, known for producing Tesla’s Solar Roof and Superchargers, also employs Autopilot data analysts. Under the existing agreement, Tesla is required to maintain a workforce of 1,460 people at the Gigafactory and a total of 2,000 employees across the state. Failing to meet these thresholds would trigger a $41 million fine.

Changes on the Horizon

In 2025, Tesla and New York State will renew their agreement, and the terms are set to shift substantially. According to documents obtained through the Freedom of Information Act by Empire State Development, the new draft agreement outlines several key updates.

Key Changes in the New Agreement:

• The agreement could extend through 2034.
• Tesla’s Buffalo workforce will increase to 1,800 employees, up from 1,460.
• Statewide employment will rise to 3,000 workers, an increase from 2,000.
• The penalty for not meeting employment goals remains at $41 million until 2029 but drops to $10 million afterward.

Rent and Additional Provisions

One major adjustment involves the rent Tesla pays for the factory. The current symbolic rent of $1 per year will rise to $2 million through 2029 and $5 million through 2034. Additionally, the agreement includes provisions for Tesla’s Dojo Supercomputer to be housed at the Buffalo facility.

There is also potential for further expansion: if lawmakers approve 10 new Tesla showrooms across New York State, the company would be required to hire 500 additional employees and invest in expanded job training programs in Buffalo.

Final Approval Pending

Although these updates represent a significant shift, the new agreement has not yet been officially signed. Finalizing the deal will mark a new chapter in Tesla’s ongoing relationship with New York State.