Lucid Motors deal could cost millions more in incentives than Arizona officials initially said

• In a Wednesday afternoon email, a spokeswoman from the Arizona Commerce Authority said Lucid Motors could receive as much as $46.5 million in state aid

A day after Gov. Doug Ducey announced a startup car company would open operations in Arizona, lured by an estimated $5 million in state subsidies, Arizona officials acknowledged the state is actually offering a package that could be worth much more.

In a Wednesday afternoon email, a spokeswoman from the Arizona Commerce Authority said Lucid Motors could receive as much as $46.5 million in state aid that would be tied to milestones to help the facility begin producing electric luxury sedans by the end of 2018.

Additionally, the state's incentives package uses three Arizona programs, not two programs as Sandra Watson, president and CEO of the Arizona Commerce Authority, described Tuesday.

Lucid Motors of Menlo Park, Calif., is aiming to compete with electric-vehicle maker Tesla. On Tuesday, Ducey, Sonora Gov. Claudia Pavlovich and company executives announced plans for an assembly plant in Casa Grande that could bring up to 2,000 jobs and as much as $700 million in capital expenses over five years. Parts for the vehicles would be manufactured by suppliers in Sonora, Mexico.

Arizona helped land the company in part by the subsidies that the company is required to achieve as it moves toward vehicle production. Ducey was repeatedly asked by reporters about the subsidies, but he would only say they were part of existing programs. He referred questions to the Arizona Commerce Authority and Casa Grande.

Moments later, Watson said the state used two existing performance-based programs to help lure the company: a maximum of the $5 million from the Arizona Competes Fund and a still-to-be-determined amount from another program for manufacturers. Funding from that program will be based on the company’s investment and job creation.

The Wednesday email by Commerce Authority spokeswoman Susan Marie put a potential price-tag to the package: $46.7 million. She wrote the agency has made Lucid Motors a $5 million grant offer from its Arizona Competes fund, which are paid out as companies reach certain benchmarks. The "specific terms" of that offer "are currently being negotiated," Marie wrote.

Tesla rival Lucid Motors plans Casa Grande plant

Lucid Motors is also eligible to take advantage of "as much as $40 million" in qualified facilities tax credits. However, the company has not submitted an application for pre-approval. Until an application is received, she wrote, "it is very difficult to know how much they might actually receive." Based on the projected number of jobs the company could bring, the company "could in theory" receive up to $40 million in credits.

And, the company has applied for a $1.5 million job training grant, which is contingent on the number of workers who are hired and trained within two years.

Even if the company drew down all of the subsidies, Marie wrote, the package "pales in comparison to the $1.3 billion package for Tesla and the $335 million package for Faraday Future that Nevada did."

'It is somewhat complicated'

Asked Wednesday evening why state officials did not release the full scope of the state subsidies during Tuesday's announcements, Watson said, "Our intent was in no way to lowball anything."

She stressed that the deal’s ultimate cost to taxpayers is speculative, and that the tax credits depend on an application the company hasn't submitted and performance requirements that haven't even started.

Watson said she tried to signal the potential cost by mentioning the matrix of factors used to calculate the tax credit’s value. In the end, the agency issued its estimated value after some media incorrectly speculated the deal could be worth $70 million.

“It is somewhat complicated to put out there because it is not an actual number. It is an estimate,” Watson said.

When asked Wednesday why the governor and state officials did not release the state package's full potential worth of $46.5 million when announcing the deal, Ducey's spokesman Daniel Scarpinato said the state provided accurate information at the Tuesday event. The email from Marie, he said, was simply "additional information" that reporters had asked for.

"I think what’s important about this is that this is all stuff that is available to really anyone," Scarpinato said of the incentives. "There’s no special treatment here."

The first question to Ducey from reporters immediately following the announcement was about the state aid. As reporters gathered around the governor, he was asked what type of tax package the company was getting. Ducey said he was thrilled the company chose Arizona and said the aid was "within our existing package."

Asked again how much aid Lucid is getting, the governor repeated, "it's within the existing package" and "within the existing law," and he directed reporters to talk to Watson and local officials. Asked a third time to provide a estimate of the subsidies, he repeated they come from existing programs.