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Orange County, NY Chosen for Location of New Tesla Parts Distribution Facility, Hundreds of Jobs to Be Created

Published: July 21, 2023
On July 18, the Orange County Partnership (OCP) announced that Tesla, the electric vehicle giant, has chosen a location in Orange County, New York for a new parts distribution center which promises to bring hundreds of good paying jobs to the region. (Image: JOHN THYS/AFP via Getty Images)

By the end of this year, electric vehicle giant Tesl, will be setting up a new parts distribution facility in a 927,000-square-foot building near Route 300, across from the Newburgh Mall site in upstate New York’s Orange County, a move that is expected to bring hundreds of new jobs to the area.

The automotive and clean energy giant already has a New York state location — Gigafactory 2 (or, Giga New York) in the Buffalo area, where PV cells and Tesla Superchargers are made.

The new distribution center was announced on July 18 by the Orange County Partnership (OCP), a nonprofit that promotes business development in the county, which is about an hour’s drive from Manhattan.

The new facility, developed and owned by New Jersey-based Matrix Development Group, will be housed in the larger of two buildings on site.

Maureen Halahan, president and chief executive officer of the Orange County Partnership, told the Times Herald-Record that “Matrix has a long history of undertaking quality projects in Orange County,” and noted that “the Tesla signing is yet another example of the value of speculative development, and exactly why we supported the approval of this robust business park.”

Halahan said that Tesla plans to initially hire 150 workers with plans to expand the workforce to 300. 

Operations at the new facility will focus solely on parts distribution, meaning that no manufacturing will take place on site.

In a statement, Orange County Executive Steve Neuhaus said that “Tesla is changing the automotive industry in America and abroad. Having a relationship with Tesla in Orange County can raise income levels for our area and create good jobs. It will also increase competition for our workforce.”


‘Turbulent times’

On July 21, Elon Musk, CEO of Tesla, said the car company was facing “turbulent times,” and that the company is looking to slash prices in order to boost sales.

“It does make sense to sacrifice margins in favor of making more vehicles,” the tech mogul said on Friday, according to Reuters

Musk’s comments came as stock in Tesla plummeted nearly 10 percent on July 20, as investors fretted over falling margins. 

Prices for the company’s electric vehicles have gradually declined over the last year, with Tesla slashing prices in both the United States and China.

The Model Y, the world’s best-selling electric vehicle, saw its price slashed by 20 percent in December 2022. When considering a possible $7,500 Biden tax cut, the price for the vehicle drops by 35 percent.  

Cox Automotive data indicates that Tesla’s discounts, in addition to tax incentives, helped boost the car company’s second-quarter U.S. sales.

According to an analysis of Tesla’s second-quarter results, conducted by Reuters, Tesla has a competitive edge over its competitors as it can tap into more tax credits for battery manufacturing as its rivals manufacture fewer batteries.

Zach Kirkhorn, Tesla’s Chief Financial Officer, says that Tesla expects to book between $150 and $250 million in battery credits each quarter this year, which could rise as Tesla increases battery production.

This January, Musk said during an earnings call that “the value of credits this year will not be gigantic, but I think it could be gigantic. We think it probably will be very significant in the future.”

By the end of the decade, the U.S. government is on track to hand out upwards of $119 billion in battery manufacturing tax credits, of which Tesla and its partner Panasonic are poised to receive upwards of 28 percent.