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Controversial Tesla factory in Buffalo meets job requirements of $1 deal with NY
By
Jimmy Vielkind
Published Feb 15, 2026
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By
Jimmy Vielkind
Published Feb 15, 2026
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Last year, New York lawmakers were delighted to beat up on Tesla.
Democratic legislators introduced bills to claw back some of the $1 billion the state spent to build a massive factory in Buffalo and revoke licenses to operate its electric vehicle dealerships.
They said Tesla hasn’t been a good partner in Buffalo and urged the state to fine it for falling short on job requirements. They said they were outraged by company founder Elon Musk’s gutting of the federal bureaucracy as a leader of President Donald Trump’s Department of Government Efficiency. Musk left the federal government last summer after a falling-out with Trump.
Now, Tesla reports it’s hired more than 300 additional employees in Buffalo and is finally meeting the job requirements in its dollar-a-year factory lease. The company says it has invested $350 million in supercomputers on the site and has finally started manufacturing solar panels — the latter of which was the plan when then-Gov. Andrew Cuomo announced the factory in 2014.
State economic development officials who were actively negotiating to reduce Tesla’s job requirements as part of a lease update say they’re pleased.
“Very happy,” said Hope Knight, president and CEO of Empire State Development, a state authority.
A required jobs report reviewed by Gothamist said the company employed 2,399 people full-time at its sprawling South Buffalo factory at the end of 2025 and another 1,060 people at Tesla facilities around the state, including dealerships. A handful of part-time employees pushed the company over its required target of 3,460 jobs.
The increase was due to the opening of a new service center on Long Island as well as a warehouse in Buffalo and showrooms in White Plains and Staten Island.
“Tesla also continues to invest in the local and state economy and utilizes local and state-based vendors, suppliers, and business services on a regular basis,” Jeff Munson, Tesla’s director of treasury and capital markets, wrote in a letter to the state.
The company didn’t respond to a message seeking further comment. Musk has kept a lower profile since leaving government and sought to shore up his businesses after profits declined in his absence.
He has pushed Tesla to pivot to the development of humanoid robots, prompting financial losses. The Buffalo plant — which the company calls a “gigafactory” — mostly makes chargers for electric vehicles.
Critics on both the political left and right have called the factory a boondoggle. That intensified when top Cuomo aides were charged with bid-rigging by federal prosecutors in connection with the factory’s construction.
State and local officials have continually complained about the opacity of the plant’s operations and difficulty engaging with executives. Last year they sensed leverage: Tesla was behind on its job requirements and sought to renegotiate its lease on the factory.
Sean Ryan, now the mayor of Buffalo, pushed for the company to make a payment in lieu of taxes to the city on its otherwise exempt property. Assemblymember Pat Burke urged Empire State Development to consider other companies that might want to use the space.
Burke said he’s skeptical of the jobs report — which Knight said the state hasn’t yet verified. Ryan said meeting the jobs benchmark was “welcome news.”
“No one is rooting for this facility to fail,” he said. “The money’s been spent and our community needs the jobs. The original vision may have changed, but we still expect Tesla to do everything it can to maximize jobs and investment here in Buffalo.”
Elon Musk's work for President Trump gutting the federal government outraged Democrats.
Tom Brenner For The Washington Post via Getty Images
Other state legislators far from Buffalo took aim. State Sen. Patricia Fahy, an Albany Democrat, is sponsoring a bill that would revoke Tesla’s five company-owned dealership licenses and allow other companies to bid for them. New York law otherwise prohibits automakers from directly owning dealerships.
“I’m not as charged up as I was a year ago,” Fahy said. “I still stand by the point that Tesla should not have a monopoly.”
Assemblymember Micah Lasher, a Democrat from the Upper West Side, said the state should enforce $41.2 million in penalties against Tesla for falling short of its commitments. Lasher sponsors legislation that would let the state claw back some of its subsidies.
He didn’t return messages seeking comment.
In his letter, Munson mentioned the bills as “barriers to continued growth.”
“Tesla’s positive economic impact in the state, through billions in investments and thousands of jobs created, has been described in our report and letters to you over the years, and we are disappointed by the proposed legislation and other efforts aimed at harming our business in New York,” Munson wrote.
Knight said the state was still considering whether to push for a fine.
“We are going to evaluate that in the context of what has been reported and what the plans are on a future basis,” she said.
Indeed, Empire State Development spent 2025 going back and forth with the company over the terms of a new lease for the Buffalo factory property. The current agreement expires at the end of 2029.
Tesla promised to eventually pay up to $5 million in annual rent if its statewide job requirement was lowered to 2,900. The company said it would locate a new supercomputer in Buffalo – though a shift in computing strategy last year threw negotiations off track, Gothamist reported.
John Kaehny, executive director of the government watchdog group Reinvent Albany, has been a loud critic of the deal. He said the state should issue a request for proposals to see who else might want to lease the factory space.
Tesla’s operations haven’t had the intended effects and aren’t a justifiable use of $1 billion of public money, Kaehny said. The original contract required manufacturing jobs — though the mandate was loosened over time to include any position.
“The point of the exercise was manufacturing jobs — not subsidizing the sale and maintenance of Tesla vehicles,” Kaehny said. “In terms of a public investment, it’s a fundamentally flawed idea unless you’re planting the seed of a mighty oak. And that is not what’s happening here.”
Regardless of how the deal was structured, Knight said, the factory is now a major employer.
“[Empire State Development] has tried to make the best of a very difficult situation,” she said. “There hasn’t been another use that has come forward that would replace this one, and so to the extent that we’re in this place, the fact that 2,000 families at [the factory] are being supported through the activity of this employer — it’s the best that we can have happen.”
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Jimmy Vielkind
Jimmy Vielkind covers how state government and politics affect people throughout New York. He has covered Albany since 2008, most recently as a reporter for The Wall Street Journal. Jimmy led a team of reporters that won a New York Press Club award for coverage of Andrew Cuomo’s downfall and was on a team that won a Gerald Loeb Award for coverage of Amazon’s HQ2 process. A native of the Capitol Region, Jimmy has two degrees in urban planning. His position is funded by a grant from the Corporation for Public Broadcasting. Reach Jimmy at [email protected].
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