City council on Thursday gave a green light to $562,500 in incentives for DeLorean Motor Co., a startup venture that wants to resurrect the iconic ’80s sports car bearing its name as an electric vehicle, or EV.
So far, the company has been short on public details about the venture, including the extent of its financial backing. Experts warn that it faces an uphill trek in an increasingly crowded EV market and could burn through all its cash before getting any cars off the assembly line.
Even so, council members unanimously approved up to $562,500 in grants for DeLorean to set up its headquarters at Port San Antonio. They also approved the startup to apply for $1.25 million in tax refunds through a state program.
The city deal requires DeLorean to create up to 450 jobs by the end of 2026 paying an average salary of $145,600 and at least $50,000. The jobs would primarily be engineering and corporate positions, according to company officials, since it plans to have contractors in Canada and South Carolina actually build the cars.
Prior to the vote, council members attempted to get in front of likely criticism that they were throwing cash at an untried company. They repeatedly stressed that the incentives would only be paid out after DeLorean hits milestones of creating 150, 300 and 450 jobs. Staff promised the city can “claw back” the money if the firm hits the goals but later backslides.
“That’s not a giveaway,” District 8 Councilman Manny Pelaez said. “That’s a very important investment that we’re making in a very, very safe way.”
During remarks, DeLorean CEO Joost de Vries said his company’s decision to locate in San Antonio came down to more than incentives, noting that it hopes to be able to team with local suppliers and universities.
“Ultimately, this was not a decision about money, because other states were offering a lot more zeros than you do,” he said. “But you offered us people. What you offered was the willingness to say ‘yes.'”
Bexar County is also likely to offer DeLorean a package of its own. That proposal would include a 10-year, 100% tax abatement on the company’s personal property investments, estimated to be worth $512,828, officials said.
Bexar Commissioner’s Court is expected to vote at its next meeting whether to allow staff to negotiate with the company, county spokeswoman Monica Ramos said. Staff would still bring back their final recommendations for another vote by the court.
During the city-county scramble to court DeLorean, local officials have said the venture fits in with the strategy of attracting auto-industry investment.
However, despite the buzz surrounding the EV market, its startups face enormous risks, Anjan Hemanth Kumar, an analyst for San Antonio-based market research firm Frost & Sullivan, told the Current in a recent interview.
“You need to make hundreds of thousands of cars to achieve profitability, so that’s a huge problem,” he said. “It’s a huge mountain to move.”
Stay on top of San Antonio news and views. Sign up for our Weekly Headlines Newsletter.
Related Stories
DeLorean will unveil new car in California, not San Antonio, despite seeking tax incentives here
Trump-era aluminum tariffs still hurting San Antonio brewers, beer consumers
App that connects homeowners with lawn care services launches in San Antonio
High-Dollar Ride: San Antonio has reason to be skeptical about Elon Musk’s proposed hyperloop
Port San Antonio to build office tower, hundreds of millions of dollars in other new facilities
Texas plans to place charging stations for electric cars every 50 miles on most interstates
Suit accuses founders of San Antonio-based DeLorean electric car firm of intellectual property theft
San Antonio’s DeLorean Motor Co., now facing lawsuit, criticism, unveils prototype at California show
Scaled-back launch plan, company silence raise concerns over San Antonio startup DeLorean
This article appears in Apr 6-19, 2022.
