Green Cronyism Gone Wild: It Looks Like The State Of California Is Bailing Out Tesla

Date: 18/07/17 | Wolf Richter, Business Insider

The California state Assembly passed a $3-billion subsidy program for electric vehicles, dwarfing the existing program. The bill is now in the state Senate. If passed, it will head to Governor Jerry Brown, who has not yet indicated if he’d sign what is ostensibly an effort to put EV sales into high gear, but below the surface appears to be a Tesla bailout.

Tesla will soon hit the limit of the federal tax rebates, which are good for the first 200,000 EVs sold in the US per manufacturer beginning in December 2009 (IRS explanation). In the second quarter after the manufacturer hits the limit, the subsidy gets cut in half, from $7,500 to $3,750; two quarters later, it gets cut to $1,875. Two quarters later, it goes to zero.

Given Tesla’s ambitious US sales forecast for its Model 3, it will hit the 200,000 vehicle limit in 2018, after which the phase-out begins. A year later, the subsidies are gone. Losing a $7,500 subsidy on a $35,000 car is a huge deal. No other EV manufacturer is anywhere near their 200,000 limit. Their customers are going to benefit from the subsidy; Tesla buyers won’t.

This could crush Tesla sales. Many car buyers are sensitive to these subsidies. For example, after Hong Kong rescinded a tax break for EVs effective in April, Tesla sales in April dropped to zero. The good people of Hong Kong will likely start buying Teslas again, but it shows that subsidies have a devastating impact when they’re pulled.

That’s what Tesla is facing next year in the US.

In California, the largest EV market in the US, 2.7% of new vehicles sold in the first quarter were EVs, up from 0.4% in 2012, according to the California New Dealers Association. California is Tesla’s largest market. Something big needs to be done to help the Bay Area company, which has lost money every single year of its ten years of existence. And taxpayers are going to be shanghaied into doing it.

To make this more palatable, you have to dress this up as something where others benefit too, though the biggest beneficiary would be Tesla because these California subsidies would replace the federal subsidies when they’re phased out.

It would be a rebate handled at the dealer, not a tax credit on the tax return. And it could reach “up to $30,000 to $40,000” per EV, state Senator Andy Vidak, a Republican from Hanford, explained in an emailed statement.

This is how the taxpayer-funded rebates in the “California Electric Vehicle Initiative” (AB1184) would work, according to the Mercury News:

The [California Air Resources Board] would determine the size of a rebate based on equalizing the cost of an EV and a comparable gas-powered car. For example, a new, $40,000 electric vehicle might have the same features as a $25,000 gas-powered car. The EV buyer would receive a $7,500 federal rebate, and the state would kick in an additional $7,500 to even out the bottom line.

And for instance, a $100,000 Tesla might be deemed to have the same features as a $65,000 gas-powered car. The rebate would cover the difference, minus the federal rebate (so $27,500). Because rebates for Teslas will soon be gone, the program would cover the entire difference – $35,000. This is where Senator Vidak got his “$30,000 to $40,000.”

The Tesla Model 3 would be tough to sell without the federal $7,500. But this new bill would push Californian taxpayers into filling the void. It would be a godsend for Tesla.

Full post

HT/The GWPF

Advertisements

153 thoughts on “Green Cronyism Gone Wild: It Looks Like The State Of California Is Bailing Out Tesla

  1. Musk is a an expert subsidy farmer. All his ventures rely on taxpayer money. his latest wailing about how AI will take over and we need urgent regulation is exactly his same old strategy. regulation will mean subsidy to fund his AI research/voodoo.

    • So, does that make Musk a bad guy, or the idiotic government that hands out the subsidies. The fact is, that when you hand out subsidies, tax credits, etc., they will get used. Nobody leaves money on the table if they can help it. I take every tax deduction and credit that I legally can, and I’ll bet you do to. I don’t like the EV and Solar subsidies any more than you do, but I aim my criticism at the source, not the sink.

      • Paul, how many of us have the resources to win and dine lawmakers? Musk can and does spend money to get lawmakers to put these gems into the tax code on his behalf.

      • MarkW, Trump has the resources to wine and dine lawmakers, but he still can’t repeal an replace Obamacare.

        Must take more than wining and dining to influence lawmakers.

      • Why choose when you don’t have to? Both are bad. Arguably government is something we can impact, so that’s where the effort belongs.

      • When you have a corrupt government, people learn to play along – or they end up poor, imprisoned, or dead. I have a hard time faulting Musk. He is playing by the rules that a corrupt government has set up. I myself am collecting Social Security, although I don’t need it, because my tax money went into it. I am still raw, because my savings investments during that same time were considerably less than what my Soc Sec taxes were (including Boeing’s contribution), yet it pays me less than half what my investments do. I was taken to the cleaners, and believe me, I made a lot of bad investments, learned a lot over 30+ years of my career. Even so, my investments grow in value every year despite my withdrawals.
        If you are forced to pay money into a system, you want as much of your money back as possible. Elon is no different from the rest of us. I’ve pointed out to my Kali friends that they need to jump on this deal – get a chunk of their taxes back. You can bet Elon has paid the state of Kalifornia some big bucks. I know I have – but no more.
        I got my motorcycle licensed in Nevada yesterday. One of the charges was for verifying the VIN. Cost me $1.00 for two people to spend about 5 minutes to complete the verification. That works out to about $6.00 an hour per person. That’s about as good as you’ll ever get from government, but I still feel I paid more than any government person is worth.

    • Colin, I admit to having been a subsidy farmer myself. Not to the extent Musk has been, my taxes were numbered in millions rather than billions. I just didn’t have the ability to “deep farm” subsidies the way Musk does.

      But shall we think about this a minute? When you’re taxed to the tune of a measly few million, maybe a billion, in a single year, wouldn’t that motivate you to discover ways you might recover those loses? Legally?

      Musk is no muse, he’s just someone who made a lot of money once and would, justifiably, like to get as much back as possible. That he was steeled in that task by being robbed by highway men to begin with is material and it deserves consideration.

      • Bartleby

        Our UK Tax regulations are testament to that. Apparently 17,000 pages of regulations that Amazon and Google (amongst others) successfully negotiated to pay no tax whatsoever here.

        All of a sudden Amazon and Google are the culprits!

        Perhaps if we got rid of half the civil service in the UK (namely pen pushers, not Police and medical staff etc.) we might have a simpler and more effective taxation system that benefits the state and the taxpayer instead of paying the salaries of said pen pushers.

        And instead of our schoolchildren being compelled to learn from Al Gore, perhaps they should be instructed in Adam Smith’s ‘Wealth of Nations’ which is a far better foundation by which to examine the future of or global society. The condensed version is only 84 pages and easy enough for me to understand, so a schoolchild would have no problem.

        https://static1.squarespace.com/static/56eddde762cd9413e151ac92/t/56fbaba840261dc6fac3ceb6/1459334065124/Condensed_Wealth_of_Nations_ASI.pdf

    • I’m kinda with Paul on this one. Elon Musk has been one of the most capable and adroit subsidy farmers the world has ever known. But taking advantage of government largess is a skill. He does return genuine value. I think EVs are a stupid idea, but Tesla is one of the very best. There’s no such thing as private space exploration, but SpaceX is a premier aerospace company. I think the hyper loop train idea is lunacy. But I’m not betting that Musk doesn’t pull it off.

      On a side note – big surprise – Scientific American is claiming that, after adjustments, that satellite data confirms super duper scary and accelerating sea level rise.

      https://www.scientificamerican.com/article/satellite-snafu-masked-true-sea-level-rise-for-decades/

      • Actually, I don’t think the Elon is trying to become the best “subsidy farmer” or even the richest guy in the world. He has one goal: colonize Mars. And everything he is doing is aimed at furthering that purpose. SpaceX is obviously part of that plan, but think about it: so is his other businesses. ICE cars won’t work on Mars (no oxygen), so electrics will be required. He is perfecting the technologies now, and getting customers to pay for it. Even if Tesla never makes a dime in profit, it will still be contributing to his final goal. Same thing with Solar City and even the Hyperloop thing. Of course, making money won’t hurt, since colonizing Mars will be mega expensive, but that’s just a means to an end for Elon. His plan is so big and audacious that most just can’t grasp it.

      • You’re drooling a bit when you talk about Musk’s grand plan. He mostly doesn’t hit his goals. He may want to get to Mars (may), but don’t kid yourself that he’s got this master plan that’s unfolding. His only “success” to date is SpaceX and since he’s not releasing any financials on that we don’t even know how well that’s truly going.

      • Tsk Tsk,
        “Drooling”, huh? Seeing as you don’t know a damn thing about me, that’s a pretty derisive thing to say. All I did was make an observation about what I think Elon’s motivations are. I didn’t say, or even imply, that I supported it. Hell, I have no idea how far he’ll get; it’ll all probably unfold after I’m dead anyways.

        As far as success/failure is concerned, as an engineer I don’t really care if his ventures are profitable or not; I judge them on their technical merit. And on that basis I would say SpaceX and Tesla are a success since they advanced the state of the art in their respective areas and have so far delivered on Elon’s promises, even if not exactly on schedule (which is a very difficult proposition when developing new technologies). Frankly, I’m at a loss as to why uninvolved parties would care whether a privately held company is profitable or not.

      • Musk has a problem common to all successful men. Being successful and getting rich in one field (Musk in his investment in Paypal) allows these men to get into other fields. Much like a TV actor thinking that movies or theater or politics will be a snap. It seldom works like that but their ego won’t allow them to see it.
        Their are some who make it (Trump, Rand, Schwarzenegger) but most don’t. So far Musk is concentrating on funding but he soon will have to generate real world results. Physical tech is far different than IT. Musk will find that out sooner or later.

      • george, doesn’t it always? If you make money from subsidies, they are a good thing. If you do not make money from subsidies, but lose money as a taxpayer, then they are a bad thing.
        I have often thought that, all in all, subsidies are a bad thing, as they distort the economy and give those with enough money and influence extra while taking it from those who do not have the ability to get subsidies. It is not always about clever rich against less clever rich, but clever rich against those with less.

      • Bingo. I don’t see him as some evil genius out to make as much money as possible from the taxpayer, but someone who’s single-mindedly trying to get to Mars.

    • Don’t know if this will happen but CA is in a cap-and-trade scheme with Canada (Ontario I think…). I bet there is a way that some of our higher cap-and-trade costs are somehow going through Canada to third world countries… Wouldn’t also be surprised if the ‘costs’ of cap-and-trade are somehow profiting big banks – as well as providing revenue for the state of CA mainly from the middle class that results in the rich keeping more of their wealth (less reason to raise taxes on the rich since the revenue stream is flush with green taxes or cap-and-trade revenues).

  2. I have written to my CA. state senator protesting this outrageous raid of my wallet. It is too late to protest in the Assembly. California voters can find their state senator here: http://findyourrep.legislature.ca.gov

    Please email your argument against AB 1184 to your state senator today.

    • Oh don’t worry. California will be broke by then and won’t have a dime leftover for silly things like EV. Maybe not even for other silly things like cops, firemen, water or power – especially power.

  3. How many poor folk are buying these cars? How many poor folk will be paying for this subsidy through their taxes?
    Looks like this “green subsidy” is actually reversing the distribution of wealth intended by the watermelons.

    • Most of the elite environmentalists think that there are too many people in California. The most deplorable of these are blue collar rednecks who reside in the inland valleys. The just passed cap and trade legislation will add $250 per household to the cost of living in the state, the transportation bill passed last spring added $300 per household and this would tack on a couple hundred dollars more. The legislation already passed is indexed to inflation. A lot of blue collar jobs and the deplorable rednecks who do the work will likely need to leave the state. I suspect there are a lot of wealthy coastal residents who’ll see that as a collateral benefit.

      • Any collateral benefit quickly evaporates as soon as the wealthy coastal residents realize that they will now have to shoulder the burden previously borne by the departed residents.

      • “The most deplorable of these are blue collar rednecks who reside in the inland valleys.”

        Sure Sean. It’s all the “inland valley” farmers voting for cap and trade carbon taxes.

        That’s a lie Sean. A flat out lie.

      • Nah, they’ll get a few more undocumented immigrants to shoulder it for them. They’re a lot easier to hire, fire, and generally exploit than fellow American citizens.

      • Eustace said: “Bartleby, I think you seriously misread Sean’s post. It was sarcasm.”

        I do not believe it was sarcasm, the wording is very different from a purely sarcastic post.

      • The Green Elite cannot see that far, because everyone in their circle is buying a costly Tesla. Don’t quiz them on their air miles either!

    • Seems true to me. The green energy subsidy hysteria increases the electricity cost. It doesn´t bother me much per today, I can pay for it. I feel sorry for the poor though.
      I also drive an electric car that is heavy subsidised. In addition to no tax on the purchase, I got free toll passings, free ferries. It doesn´t help much for the CO2 emissions though:

      “Electrical Vehicles convert about 59%–62% of the electrical energy from the grid to power at the wheels” and
      “Conventional gasoline vehicles only convert about 17%–21% of the energy stored in gasoline to power at the wheels.” – The official government source for fuel economy information

      However, a lot of the electricity on the grid is produced from fossil fuel. (Unless the consumers has bought a Guarantee of Origin that is largely right even in Norway. Even though Norway, in theory, produces enough hydropower for its own consumption Link, Norway has sold the hydropower to Europeans by Guarantees of origin. Those without a guaranty of origin by definition run on 57 % fossil fuel and 31 % nuclear )

      The “Typical thermal efficiency for utility-scale electrical generators is around 33% for coal and oil-fired plants” – Fossil fuel power station

      Hence:
      60 % fuel efficiency by the electrical vehicle powered from the grid
      multiplied with:
      33 % fuel efficiency by the fossil fuel machine powering the grid
      =
      Total fuel efficiency is about 20 % for an electric vehicle powered from a grid that is mainly powered by fossil fuel. Which is about the same as for a conventional gasoline vehicle.
      (There is also a transmission loss in the electric grid that I have not taken into account.)

    • Wealth and power concentration in the hands of a few at the top, has always been the plan.
      It isn’t what they say, it’s what they do.

    • You can’t begrudge the ruling class the tools it needs to succeed, can you? Socialism for thee, not for me.

  4. In the mean time California’s roads, bridges, dams and other infrastructure are falling apart and our water infrastructure hasn’t kept pace with the growing demands of the states growing population meaning the state can’t weather the states frequent droughts. Fiddling while Rome burns comes to mind for some reason.

    • “The problem with socialism is that you eventually run out of other people’s money”. I think California is getting close.

      • Not as close as the country as a whole… We ran out of other people’s money $19 trillion ago. I’m no fan of Musk, and think the whole subsidy thing is absurd…but…there’s this sort of huge asteroid that weighs about 19 trillion tons headed our way :)

      • That’s partly why you see the concentrated “Progressive” power in Silicon Valley, ramping up their power and influence in the Democratic party, nationwide.
        There’s lots more money for them to run through, out here in flyover country.

      • @Jim Butler
        If the debt service (interest+principal) on the debt remains a relatively constant percentage of revenues, the Federal government can “afford” to increase the debt indefinitely. The problem is that if you have a severe enough economic contraction and revenues tank you get the one-two punch of debt service siphoning funds that then requires adding even more debt to offset the revenue drop. Keep it up for a few quarters and you have Zimbabwe hyperinflation. Actually, they didn’t go hyper, they went right to plaid with the peak monthly inflation rate in November of 2008 of 79.6 billion percent. Ironically, Zimbabwe solved this problem by making the US dollar their official currency.

      • Last I checked, total US assets are valued at around $200 trillion. The debt hockey stick is a big problem, but far from bankrupting the country.

        We could always sell California back to Mexico. :D

    • As long as people vote in representatives who will keep writing checks for it, or until they are bailed out when the checks bounce. As in forever.

      • Representative governance evaporated when proposed legislation went into the dark “Committee” process. Inside of all committees there is unlimited access to the written direction of the ‘proposal’ via a pay up front. This direction in total is never debated on the floor of House. State committee process is little different in most cases. Thus crony politics.

      • Latitude, Sheri, this is the inevitable result of one party (Democrat/Progressive/Socialist) rule. And it can go on a long time, e.g. Cuba, Venezuela, and so on.

    • as long as people pay taxes they will get what they paid for.
      whining about it will surely help, said nobody ever.
      voting for the other cannibal is a viable alternative, said the cannibal’s brother in law.

      bureaucracies multiply to eat our your substance only because it’s so well funded by those who are consumed. it doesn’t stop till tea in the bay.

  5. What advantage does Tesla have over conventional auto makers who want to also sell electric cars? As far as I can tell the answer is … zero advantage.

    Tesla compares with RIM (now Blackberry), who brought us the smart phone. When Apple and Google decided to eat RIM’s breakfast, it was no contest. If electric cars suddenly became economical, the major companies, most of whom have a foot in the market, would take Tesla’s market share in a heartbeat.

    • No competition Bob, you’re right on that.

      Musk is a “loss leader”. Anyone investing in that company above $17/share is a complete fool. Watch as the stock price plummets on the timeline described in this article. Tesla is very clearly a short play.

    • commieBob – I think you are wrong there. Tesla have planned ahead on several things: in particular they have started production at a battery factory that is projected to double world output of lithium ion batteries. GM couldn’t scale the Bolt to model 3 numbers if they wanted to as they don’t have anything like that capacity coming on stream.

      Tesla have also built a proprietary fast charge network that works at twice the effective peak power of most of the rather ragged fast charge infrastructure.

      And Tesla aren’t Lilliput – market cap. is in the same territory as the majors (who have had their own subsidies – https://www.thebalance.com/auto-industry-bailout-gm-ford-chrysler-3305670)

      • This just in – China has halted exports of raw lithium and will only allow exports of battery packs. Now imagine you’re Tesla when that news breaks.

      • Yes, and fully charging Li battery shortens the life as well. Tesla has two charging modes… 80% for normal charge and 100% when you need extended range. If you were to constantly use the ‘super charger’ stations and charge to 100% the battery life would be seriously degraded and I’m not sure it would be covered by the warranty under ‘adverse usage’.

      • Obviously Musk has the only battery factory in the world! None of this actually solves the problems with the batteries themselves including the very real problem of only having ~1% the specific energy of gasoline. And at the rate they’re advancing we can expect parity sometime well into the 22nd century (optimistic linear extrapolation) or never (more realistic quadratic curve fit).

    • Tesla sells the only EV that can do 800 miles in a single day of driving with 8 hours of sleep and stops for food a rest and recharging. This is due to the network of supper chargers regularly spaced along interstate freeways and highways. 30minutes of charging at a supper charger station will get you to the next supper charger station 100 to 200 miles away. There are people that routinely drive teslas on long distance trips.

      All other EVs on the road require at least 5 hours of recharging once the battery is depleted. So even the chevy volt with its 200 mile battery is still primarily local driving only car. All other EVs currently on the market have less that 100 miles range and need even more time to recharge. There is simply no competition to tesla when it comes to EV doing range.

      • If you want to drive your EV long distance, just tow a trailer with a petrol-fueled generator to keep your charge up. The enviros would be appalled, but it’s practical.

        Assuming there’s a way to hook a trailer to an EV.

      • And that it would have enough torque and horsepower to move both car and trailer.

        Or just stick to your original ICE vehicle and skip the logistical middleman (and the extra Thermo II taxmen standing beside him). ;)

  6. So, what’s to stop dealers from jacking up the price knowing the State will pickup the difference? I’m half surprised they did not also allow this for used cars, so people could just perpetually buy and sell used EVs and pile up the subsidies.

    • The rebates aren’t costing them anything, so there’d be no reason to jack up their price.

      • BECAUSE they aren’t costing them anything.

        Jack the price up $20K, that is $20K more in their pockets, without affecting sales – because it’s not costing the customer anything, either.

        Visibly, of course.

      • Want to know how the dealers will play this?
        Just ask any car salesman you know, how they play a “Hail Sale”. Insurance pays for the damage, the factories give discounts to the dealer and the dealer reduces the cost to buyer enough to close the sale, making the best recurring large profit opportunity that dealers enjoy.

      • Many states have made direct sales of autos to the customer illegal.
        Florida used to have a law mandating that only funeral homes were permitted to sell caskets. And btw, if you wanted to be cremated, you still had to buy a casket.

      • Even better, Tesla gets to jack up the price themselves instead of filtering it minus a cut through a dealer.

      • Presumably even Teslas are going to need servicing from time to time. How does that fit into a no-dealer network?

      • Most of the physical work is performed at the customer’s location and software updates are done remotely.

      • Re: John Hardy. I was referring to dealers generally, including the big auto EVs and any small startups that might see an opportunity. As others have pointed out the comment applies whether dealer or direct sale and the incentives are not just for Tesla, but all EV in California.

    • Three figure salary to take professional offense at anything unsuitably progressivist? Sounds like a sweet gig.

    • Just read where a university in Chicago is looking for a professor to teach German. Needs a PhD, of course.

      And needs the ability to live in Chicago on a salary of $28,000 a year…

    • GMU created a SECOND diversity officer this past year or year before. I am fairly certain that the student body is completely unrepresentative of the Virginia population. If the percentage of each “race/ethnicity” had to be the same for students as residents, either a LOT of students would have to leave or a LOT of students would need to be added. Unless the second officer is specifically working to increase the white male student population, he (or she) is as superfluous as the first.

      I want to see outreach to poor white males from rural Virginia, particularly Appalachia. Then I will believe that GMU is interested in “diversity”.

      • Think you don’t understand what’s meant by Diversity. Only Blacks, women, gender indeterminate or various iterations of those need apply. If you’re an Asian/Jew from Hickory Corners, Wisconsin you’re on your own.

  7. Gov Moonbeam also has to believe that the state will stay solvent until a Democratic federal administration is in office to bail them out. Brown has a very serious issue with unfunded pension obligations, just like Illinois, and any general financial downturn will probably drive the state into bankruptcy.

    • Too late:

      http://www.cbc.ca/news/canada/toronto/tesla-electric-vehicle-incentive-ontario-1.3996068

      “The Ontario government’s recent move to boost rebates for electric vehicles is under fire, amid revelations that a senior Liberal staffer has been hired by electric car-maker Tesla.

      Ian Myrans left his post as director of policy to Environment and Climate Change Minister Glen Murray and joined Tesla this month. At about the same time, the government announced it was removing caps on its electric vehicle incentive program that had previously prevented buyers of Tesla models from getting the maximum rebate.”

  8. One advantage of Brown’s insanity is that once the science is corrected, and the Trump administration is on the path to achieve this goal, the uselessness and wastefulness of progressive green policies will come to the forefront and hopefully, people will open their eyes and apply critical thinking to the rest of progressive platform which suffers from many of the same faults.

    I would like to see the administration produce an executive order that prohibits states from enacting policy based on the presumption that the laws of physics can be arbitrarily violated.

    This should also serve as ground for vacating the endangerment finding as SCOTUS lacks the authority to overturn the laws of physics.

  9. So I asked a friend a few days back to consider the following about a Tesla:
    Q: If every 3 hours you had to stop for 1hr to recharge the car would you pay $90k for that car?
    Answer: No
    Followup: Would you pay $10k for it?
    Answer: Probably not.

    Therein lies the problem. A true plugin hybrid where you run off the battery (up to 40 mi) and can either charge from the battery or a dedicated small motor (a suburban would probably require 40hp, a civic 7hp) would get 90% of the benefits with very little cost and without the drawbacks. Infact for the small cars you could likely air cool the system since it would have large periods where the small motor was off. It would likely allow one of the tiny rotory motors being developed by places like liquidpiston, or Mazda’s concepts.

    • The problem here is your assumption that it would take an hour for a recharge, and one would be required every three hours. Neither claim is true, if we’re talking Tesla supercharger stations, where those on a trip would always recharge. So the only time recharge times makes any difference is while travelling. Around town, an owner would never drive enough to need a recharge. So let’s asume you begin your trip from your home, where, quite naturally, the night before you completely recharged the battery . The cheaper Tesla Model 3 can travel roughly 220 miles, while the larger batteried Model S can go a little over 300 miles, and their biggest battery around 340 miles. On an interste highway, the smaller batteried Model S can go for around 4 1/2 hours before needing a recharge. It’s fastest if you only recharge to 80% – that takes less than 30 minutes and supposedly that time will be reduced in the near future, according to a statement from Tesla Motors. That would give an additional 230+ miles, making over 500 miles travelled and probably be the end of your day’s driving. Likely you had to stop and eat at least once and that will likely take 30 minutes or so, and can happen while recharging at mid day. So have you actually suffered in any way because you drove an electric car? In the case of the shorter distance Model 3, it takes more recharge stops, but the recharges don’t take as long either. When stopping for the night, I suggest dinner at one of the places convenient to the supercharger station, where you will at this time get a 100% recharge to start your next day.
      The biggest incovenience at this time is the lack of a large number of supercharger stations,although apparently that will change in the near future. There exist enough today that you can reach any point in our country.

      • The stated range assumes that you’re driving like you’re on Quaaludes. Step on the accelerator and the miles you can travel on a charge drops dramatically. After all, it’s supposed to be a ‘sports car’, right?

        The real point is that it takes less then 10 minutes to refill the gas tank on my SUV which gets me about 400 miles. I certainly value my time, especially discretionary time which I value more highly, don’t you?

        BTW, if you are driving a Tesla, you will tend to stop at every ‘super charger’ station you come across and suck down some subsidized electricity just to be sure you can make it to the next one which tends to be spaced about half a battery pack away on some freeways. BTW, the electricity at a super charger station will not be subsidized for long and based on ‘renewable’ electric rates, electricity is far more expensive per Joule than gasoline. Also, charging stations are few and far between and there are large portions of the country that you can not get to and back without requiring a charge. If you are stuck plugging into a wall socket, it will take many hours just to get a partial charge.

        As chadb pointed out above, the right kind of electric car is one that has a built in generator running off a gasoline motor and for peak power demands can run off the combination of the batteries and generator. I would even buy one of these if I could get a peak of 300HP to the wheels in a 2 ton 4wd SUV (I drive in a lot of snow, go off road frequently and tackle big grades carrying lots of gear). The only problem with this is that the idiotic greenies are deathly afraid of Co2 emissions owing to their pathological ignorance regarding climate science and this unfounded fear has leaked into political ideologies. They only pay attention to one side of the debate and the side they listen to is the one based on demonstrably broken science.

      • The problem is your assumption that the drivers will accept range limits because typical driving is local and everybody travelling long distances will simply accept the inconvenience of halting their trip for long periods to charge. The vast majority of us enjoy the freedom to set out serendipitously without anxiety that there won’t be a supercharger station out in the middle of nowhere.

      • How many vehicles pass through a conventional fuel station in a day? Such stations may have 8 dispensing pumps capable of serving 50+ vehicles every hour.

        Can you see even half that figure parked up for 30 minutes at a time? An electric recharging station would need 100+ charging points to cater for the same throughput.

      • 220 miles from Silicon Valkey on I-5 headed to Los Angeles is the middle of nowhere. (I drove that a half dozen times a year for decades… Disneyland, kid’s college, headed to Texas or Florida, etc).

        At 440 miles, you are in the middle of sourhern nowhere. At 660 you are in the LA basin near my kid’s college.

        So forget your supercharger station. They don’t exist in the desert…

        Now also note, that involves running the battery flat empty. That is damaging to the battery. Next it assumes full recharges, which doesn’t happen in your 80% scenario. Try again…

        Oh, I frequently made that run with only ONE gas stop at The Grapevine. 5 minutes, max. Often at night (I.e. no meal stops needed).

        No way am I signing up for at least 3 and likely 4 slow charges to get to LA. It is hard enough to keep kids quiet on a fast run to Disneyland. Toss in 2 or 3 more long stops, it would be hell.

        Now, take a look at driving to Dallas from LA. At Van Horn Texas there is a strech of I-10 about 234 miles without a gas station. Just what dust pile with no powerlines is going to be your supercharger station? I get worried about that stretch in my Diesel with 450 mile range (forgot to fillup once at the entry and realized 1/2 tank was cutting it close…) I’ve done that particular chunk of I-10 a few dozen times. Once on an emergency run from Florida when the mother-in-law was hospitalized. 4 folks in the wagon, rotating 3 drivers, made the run from Orlando to San Jose in 56 hours. 2835 miles. Think that will work in a Tesla?

        On vacation, we drove to Marble Bar at the end of the Grand Canyon. Wonderful place. One gas station in the middle of nowhere in the Indian reservation. Buy gas there, or don’t make it across… That was 20 years ago, but I doubt it changed much.

        I’m not interested in a car that can’t get me to L.A. in 6 hours, requires me to stop in the middle of nowhere, can’t cross Texas on I-10, can’t support an emergency high speed run of distance, and doesn’t tollerate full drain of the battery then full charge well.

        Oh, and don’t talk to me about the run from Denver across “flyover country” for about 12 hours of wheat and corn… or crossing Montana and South Dakota to Chicago. Or the time I drove from Calgary Canada to the Rockies and back… Canada has flat empty too…

        As a second car for commuting and groceries, fine. Especially if your employer has a charging station. Not interested in laying a drop cord to the street (large numbers of folks don’t park in a garage…)

      • “The stated range assumes that you’re driving like you’re on Quaaludes. Step on the accelerator and the miles you can travel on a charge drops dramatically. After all, it’s supposed to be a ‘sports car’, right?”

        No. Teslas will give you the stated range at the legal speed limit. Tesla owners do this routinely.
        BTW, if you are driving a Tesla, you will tend to stop at every ‘super charger’ station you come across and suck down some subsidized electricity just to be sure you can make it to the next one which tends to be spaced about half a battery pack away on some freeways.”

        No. When tesla started to reply the supper chargers they were about 100 miles apart. Today the average is about 70 miles with distances as low as 30 miles in some places and tesla is still instilling more superchargers Tesla now has most of north america covered and most of wester, japan covered. And as there market is expanding they are building more in other countries.

        https://www.tesla.com/supercharger

      • DaveG, and when you calculate how many amps 100 cars fast charging will draw, each of these charging stations will need it’s own electrical substation to handle the power draw.

      • steven, why am I not surprised to find out that you don’t know that it’s not just the top speed, but the acceleration that matters?

      • Stephen,
        You’ve apparently never driven on California freeways where the average speed is generally more than 10 MPH above the posted limit with many cars going significantly faster. The majority of cars I see plodding along at or below the limit are Prius and other hybrids. They create congestion and cause the other cars to burn more gas getting around them, especially in heavy traffic. I don’t know if you’ve studied queuing theory, but it only takes one car that can’t get out of its own way to clog up an entire freeway. If I recall, mythbusters tested this and found it to be true. I call this the ‘bozo’ factor. Most of the Tesla’s I see are in the 15 MPH or more over the limit category, unless they’re low on battery when they creep along with the ‘economy’ hybrids and other under powered vehicles.

      • For all those posting examples of how electric cars would be impractical for you due to your long distance travel – fine. Don’t buy one. But the reality is that the average driver travels around 15,000 miles per year. That’s less than 40 miles per day. Also, most families have 2 cars, not 1. Have one car that is electric that is used for commuting, a second that is a hybrid or gas only that is used both for commuting and longer trips.

      • “….But the reality is that the average driver travels around 15,000 miles per year. That’s less than 40 miles per day….” Did you think about this statement?

    • Almost all driving is less than a 100 miles a day. Commuters will go for these in droves. Keep the family SUV for long haul or just fly.

  10. I’m so tired of hearing Musk hailed as a genius. With the money he’s received from the government, anyone could look brilliant. Well…except Solyndra.

    • He’s a genius at ripping off taxpayers, lying and pretending to care. Geniuses are always very limited in what they can do. These are Musk’s areas.

      • How exactly is Elon “ripping off” taxpayers? Is he stealing from the treasury? Is he defrauding the government? Is he not providing the products and services required to qualify for the “subsidies”? I would say the answer to all those questions is “No”. I don’t like subsidies for EVs and PVs any more than you do Sheri, however I think your ire is misdirected. You should be slamming the government for offering them in the first place, not taking to task the people that take advantage of them legally.

      • Paul,
        While I agree that it is the source, not the sink that is primarily to blame, there are cases where Tesla has “colluded” with regulators to obtain subsidies for which it does not legally qualify. It is true the regulators ignore their role of legally mandated oversight, but that does not absolve Musk of being involved in what is truly fraud.

        https://wattsupwiththat.com/2013/12/21/the-tesla-battery-swap-is-the-hoax-of-the-year/

        However, in a private conversation to Anthony a few years back, I noted that while Musk is fraudulently ripping off taxpayers for hundreds of millions, he is efficiently using his funds to further space exploration and may even get us to Mars. In the end, this is far less of an expense to the taxpayer than if NASA were to be executing similar programs. So, I don’t lose sleep about it.

      • Charles,
        So far I have seen no evidence that Tesla has “colluded” with any regulators; that seems to be everybody’s assumption since it is such a common occurrence when dealing with government regulations. I think it is just as likely that CARB pressured Tesla to demonstrate the battery swap technology so that they could make the claim that practical ZEVs exist and are, er, practical. That certainly would bolster their EV subsidy programs, “See, we were right that these vehicles would be produced it we incentivized them.” I think that battery swapping could be a solution to long recharge times, much the same that LP tanks are swapped today. But it seems the current generation of Tesla vehicles were not designed with that in mind, so it is probably a ways off (total chassis redesign). But in my opinion, “hoax” and “scam” are too harsh to describe the whole battery swap debacle, and CARB is much more to blame than Tesla.

    • I do not agree with subsidies, but I do not fault Musk. He played the system as it is written. That makes him very smart and canny.

      Do not fault the man for playing by the rules – put the fault where it belongs. In the rules.

      • So it’s okay for everyone to use as many government handouts as possible because they are there. One should apply for food stamps even if they don’t need them. One should try for property tax reductions. Everything is moral as long as it’s legal? It’s fine to smoke marijuana in Colorado, but WRONG in Montana. It’s fine to drive 80 out west, but WRONG to do so back East? Right and wrong are 100% fluid and situational. In some situations, murder is right, some it’s wrong. If we made it legal tommorrow, there would be nothing wrong with murder. Again, a very interesting sense of morality.

        I would note that there are NO subsidies that were not boughten through lobbying and favor granting. The subsidies exist because of political donations by corporations and lobbyists (some of whom are undoubtedly connected to Musk). No senator wakes up, says we should subsidize hand sanitizer sales and next day introduces a bill. To believe subsidies are anything other than bribes is a bit naive. I find it fascinating that the US often condemns countries for using bribes to get things done, yet the entire US runs on bribes. So hypocritical.

      • I said nothing about “moral”. I merely said I do not fault companies for playing within the rules that are established. I do blame the government for establishing rules that are stupid, unethical, immoral, and confiscatory.

        But the extension of my “neutrality” on companies playing by the rules established is not the same as people doing so. For a very good reason.

        Companies are required to maximize the investors returns. If they fail to do so, they can be taken to court and the officers actually jailed. That is another government rule.

        People are not under that obligation. Their guiding principle is what should be ethical and moral (which to the left means there are no guiding principles – situational ethics).

        So stick to what I said, not to what you think I said, or what you wanted me to say. Companies have a different set of rules from individuals.

  11. “His specialty was alfalfa, and he made a good thing out of not growing any. The government paid him well for every bushel of alfalfa he did not grow. The more alfalfa he did not grow, the more money the government gave him, and he spent every penny he didn’t earn on new land to increase the amount of alfalfa he did not produce. Major Major’s father worked without rest at not growing alfalfa. On long winter evenings he remained indoors and did not mend harness, and he sprang out of bed at the crack of noon every day just to make certain that the chores would not be done. He invested in land wisely and soon was not growing more alfalfa than any other man in the county. Neighbours sought him out for advice on all subjects, for he had made much money and was therefore wise. “As ye sow, so shall ye reap,” he counselled one and all, and everyone said “Amen.”

    ― Joseph Heller, Catch-22

  12. Want to bet that Musk bails on the market after the subsidies disappear?

    California can try to carry their water. But it is already broke. To do so, they will have to dip into CalPers and regardless of how liberal you are, no one messes with your retirement.

    • Elon is probably counting Tesla’s being acquired by some benighted automaker, which the govt has anointed as “too big to fail.” So we’ll keep on paying.

      • “…Elon is probably counting Tesla’s being acquired by some benighted automaker…” There is nothing special about Tesla that an established automaker would want. They are all in the process of making their own EVs anyway just so they won’t be left behind and so they can say “me too, I’m green”. Tesla is actually losing money on every car it sells if you look at their financials closely. Without subsidies they would be selling much fewer cars…… like in Denmark where they dropped completely off the map with new car sales once the subsidies were removed.

  13. I don’t believe even Californians are dumb enough to support this idea. What’s to stop Musk from upping his car’s price, knowing that California will pay the extra dollars? And if California’s idea is to get the max effect , they shouldn’t even subsidize those $100,000 cars, which eliminate no more CO2 than the $35,000 vehicles.
    I would also love to see how they compare cars to see if they have the “same features.” Talk about apples and oranges.

    • What keeps Musk from jacking up the price is the highly fungible nature of car-buying. Let’s say he gets X sales for a model at $75,000 with a rebate. No rebate, and now sales (for the sake of argument) are 0.5X. If he tries to boost the price to $82,500 he’s going to see the same results with the rebate as at $75,000 with no rebate; sales cut in half. That’s because you’ve hit the same bailout cost in out-of-pocket dollars for prospective buyers.

      • What matters is price to the customer.
        This program states that the cost to the customer will be the same as a similarly equipped gas powered car. So no matter what Musk charges, the cost to the customer is the same.

    • You underestimate the stupidity of the California voter (and I’m a native Californian so I’ve seen a lot of stupidity).

  14. You have to BRIBE people to buy electric vehicles—they are that bad, it seems. If you have to bribe me to buy a car, I know for a fact I’m being ripped off.

      • I won’t ask you if you really are that stupid, but I could.

        What you are, in fact, is a propagandist. You are trying to divert everyone’s attention to some tiny little “fact” which has no bearing on the matter whatsoever, so that you might deflect attention from the whole truth.

      • @Alan;

        Absent further evidence to the contrary, I believe David was simply trying to inject a little levity into the discussion. Don’t turn it up to “11” unless you really have to.

      • I must have missed the federal subsidy given for golf carts. Sigh. I didn’t have to pay retail……

      • @ D.J. I think you’re right.
        I’d just come from another website where they wicked me up to 6 already.

        @ David- sorry ’bout that.

      • Electric makes logistical sense for small convenience vehicles intended to only travel short distances. Golf carts, airport shuttles, self-propelled shopping carts for the handicapped, etc. Such fleets can be serviced by a central charging station and used on a rotating schedule to keep dead batteries to a minimum.

        The open road is a far cry from the controlled environment of a golf course or supermarket.

  15. “A year later, the subsidies are gone.”

    No problem, move ‘Tesla’ cars production to France.
    “France will outlaw the sale of all petrol and diesel vehicles by 2040, its new environment minister, Nicolas Hulot, has announced.”

  16. “No other EV manufacturer is anywhere near their 200,000 limit. Their customers are going to benefit from the subsidy”

    Not enough nuts looking for Bolts. Why pay $35K (with subsidy) for a dinky car with only a 238 mile range (perfect conditions, no loads) that takes 10 hours to charge using a professionally installed 240-VOLT/32-AMP charging unit (probably 20 hours using 120 VAC)?

    GM extends shutdown at Chevy Bolt plant as inventories swell
    http://www.cnbc.com/2017/07/18/gm-extends-shutdown-at-chevy-bolt-plant-as-inventories-swell.html

    • GM apparently failed to see that Tesla sales depend a lot upon the fact that their car is very stylish.
      The old silly belief that electric car buyers don’t care about looks.

    • I was wondering how inventories can continue to “swell” if the plant is already shut down, but reading the article reveals that it is GM’s total vehicle inventory, not just EV’s.

  17. The claim that the (virtual – not complete) reduction of tax exemptions for a Tesla in Hong Kong is indicative of what may occur here when the $7500 tax break expires is totally inaccurate. The price of a Tesla in Hong Kong practically DOUBLED (from $75K to $130K) when the tax exemption was largely eliminated. I guess sales did suffer. No surprise.

  18. EV market penetration speaks for itself. It’s also a diminishing returns market with the more being sold the harder it will be to get charged on the road. Bribing or forcing (EV only cities) people into EVs will work for the niche that can actually make good use of one….. short commute, home overnight charging, and a second ICE car for extended trips. If you can fit an EV into your schedule you’re good to go. I don’t know anyone who’s driven or taken a ride in one that’s come away with a negative experience. I certainly don’t like my taxes being used to bribe people into buying one. California’s day of reckoning is nigh. It will soon be populated by nothing but elites and welfare recipients. It’s not that far from it now. Is that the Utopia they seek?

    • Most folks in Silicon Vally live in apartments with carports or uncovered parking, not garages. Only rich folks here have cars in garages. Electric cars have that to contend with too. Poor folks park on the street, so overnight home charging is market limiting. Musk will need to convince employers to install charging stations…

      The local Walmart has a couple. It is interesting to watch folks sitting in their cars in the heat waiting for the charge to finish while I load up the groceries and leave… some of them are sitting in their cars when I arrive and still there when I leave.
      Great advertizing ; sarc/

  19. You left out the massive subsidy that comes from California’s mileage mandates. Tesla sells permits to other car companies. Audi, BMW, Mercedes, every time you buy these you are giving Tesla hundreds of dollars.

  20. “EV market penetration speaks for itself”. Yes and no. From Wikipedia: “…As of July 2016, the market concentration [in Norway] was 21.5 registered plug-in cars per 1,000 people, 14.2 times higher than the U.S., then the world’s largest country market. Also this sort of thing follows an adoption curve – https://en.wikipedia.org/wiki/Technology_adoption_life_cycle. It is unwise to extrapolate growth, especially US growth, linearly.

    • Norway is well suited for EVs. Unlimited hydro power and short driving distances. Outside of the big cities in the US how many EVs do you see? Heck, you don’t see many EVs even in the big cities yet as the sales are dismal. I’ll take in your “adoption curve for consideration” and raise you a disappearing subsidy pool and I bet I’ll win.

      • Heated garages and the Tesla controls battery temperature. The model S is a real virtue signaling car that shows you are part of the elite in Norway.

  21. So here’s a question – Gasoline is taxed at what, like $0.5/gallon at $2.26 per gallon that’s 22%. Let’s take Tesla’s supercharging stations and tax their delivery at 22%. Now let’s take the c-max hybrid at 42mpg $24k and ask how far a Tesla 3 would have to run at $0.12/kwh and 215mi/60kWh. The C-max costs $0.0538/mi and the Tesla costs $0.0335 per mile for a savings of $0.020/mile. In order to make up the $10k price difference you only have to drive 492k miles. No problem, I am sure the battery pack in the model 3 will last the required 2,300 recharge cycles no problem. So basically you only have to run through a full charge every day for 6 years (11 years if your driving is only on weekdays for 50 weeks a year) for the model 3 to make sense. I’m sure the market will go bonkers for it.
    Unless you depreciate the cost of future savings like all financial calculators do. Then of course the Model 3 never makes financial sense. However, it still allows virtue signaling, which is the entire point of the car. In fact their new marketing campaign is
    “Virtue signaling, not just for Beverly Hills”

  22. Let the Games begin…….

    More, lots more popcorn…. and more fizzy drinks…….

    Elon does not know what to do next,,,, can not even be able to make his own mind up and decide according to his own free will, as he is not allowed to do so anymore under any circumstances given , with all his wealth and all that to count for……really to bad….a real pity, for such a guy,,,,, seems like a huge waste…

    Hopefully he makes it out of this crazy “Rat Barrel” walk in he is ordered to walk in to…..which will result in end up to for him be no more or no less than food for cannon…for the survival of the cannibal savage rats like Moony….or Aly

    cheers

  23. In some states it is illegal for auto manufacturers to sell vehicles directly to the customer. The way I understood Tesla gets around this is that they “sell the car to the customer in California” according to the paperwork and the customer simply gets to takes delivery of the vehicle in one of their neighboring states. This is how Wikipedia describes the sale of Tesla’s in Texas.
    https://en.wikipedia.org/wiki/Tesla_US_dealership_disputes#Texas

    I wonder if California tax payers will be subsidizing Tesla sales in Texas and other states?

    • I’ve always wondered about that – does not sound like a free market/capitalism to me… not what one expects in the USA!

    • The beauty of unintentional consequences: if this law goes through, there will be a new black market for Tesla’s in California. ie; no one will buy a Tesla in any other state. There will be become a black market network popping up selling Tesla’s in California for all buyer’s across the country. Of course at the expense of the sucker California tax payers. The $$ differential from California to any other state to purchase a Tesla will be huge.

      What else can go wrong with unintentional consequences of this new law?

    • Headlights! Hadn’t thought about EVs and night-driving until now. In a regular ICEV, the alternator supplies the headlights with power while the engine is running, so they’re only a drain on the battery when turned on while the engine is off. In a full EV, they will always be a drain on the battery and lessen effective range.

      Hope the nearest hospital isn’t that far away. Because pregnant women never go into labor in the middle of the night. /[arcasm-say]

  24. Tesla isn’t making a profit so essentially none of the money is going to Musk himself. It’s going to Tesla and being distributed to Musk’s employees as well as his supply chain to run the business and manufacture and maintain the cars.

    I always sense people here think Musk is somehow personally reaping these subsidies and that “the people” pay and don’t benefit but in fact the people directly benefit if they’re employed by Musk or are part of his supply chain.

      • He’s living his dream. You cant blame a man for that. He strikes me as being the kind of person who puts living the dream well above wealth accumulation. At least Musk produces useful things in cars, batteries and rockets. If you want to vent anger over people taking more than their share at the expense of others whilst producing nothing of value, look at Wall St.

      • Sounds good to me Tim, but poor Musk will die a pauper if the does everything for nothing. Surely he can squirrel away a billion or two to tide him over in his old age.

      • Well he made a fortune from starting PayPal originally. He’s not short on cash. As I understand it he initially funded Tesla and Space X himself.

  25. I am willing to do my part by driving an EV to run errands. The trouble is that I cannot afford to buy one. I want the state of Calfornia to supply me with the car and a solar charging system to provide the energy.

  26. California is a Ponzi beneficiary as well . They front the 3 billion here but inflate Tesla CA employment and bubble benefits that much longer. When it busts it will be someone else’s fault.

    First Solar and Germany have done this dance for years. Stock 80% off high and still at the subside troth acting like a startup to be nurtured by government.

    Musk is a welfare queen.

  27. Now that it’s a rebate instead of a tax credit, can anyone walk into California, buy a subsidized Tesla then sell it out of state? Just asking for a friend.

  28. Elon Musk is a criminal and a mobster. He bribed over 30 Congressional and DOE staff to get his money and then laundered campaign funds for Obama and Hillary. He supported the latest invasion of Afghanistan to get people killed for his lithium mining. If Eric Holder and Jeff Sessions were not running cover for Musk, Musk would be in federal prison.

  29. I wonder if it’s THIS sort of thing that’s hurting California economy.
    Y’ know – instead of anything to do with Climate Change?

  30. I believe this is more than mere cronyism.
    The state of California has engaged in some legislative activities lately that are mind-bendingly ignorant of economic realities (the bullet train to nowhere, the $400 billion per annum socialized medicine bill). I think it may be that the Lefty-loosies are running scared and it is rattling their brain pans.
    Reality is closing in on them and the only response they can offer, the only trick left in their playbook, is to simply deny reality and keep on cuttin’ them checks like there’s no tomorrow.

Comments are closed.