
Is California Bailing Out Tesla through the Backdoor? - buckbova
http://wolfstreet.com/2017/07/16/california-bail-out-tesla-ab1184-ev-incentives/
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dragonwriter
The Business Insider piece sourced it's information on what the bill does not
on the bill text, but on a combination of an advocacy email from an opposed
legislator and reporting by the Mercury News.

The rebate plan does not do at all what the article claims; specifically, for
instance, it does not establish a new general rebate that is designed to match
the difference between an electric vehicle's price and that of a non-electric
vehicle with similar features. Instead, it establishes a declining rebate for
_compact_ electric vehicles that starts at an initial level that would provide
an approximate net purchase price after all existing incentives equal to the
most commonly sold compact vehicle in the State, but where the rebate level
would decline with EV penetration by income segment. (Health and Safety Code
44215.4, as added by the bill.)

In fact, there was no specific rebate plan in the version passed by the
Assembly, which notionally is the subject of the article; there was a
requirement for the PUC to adopt incentives. The sources the article relied on
(assuming BI doesn't misrepresent then) were either inventing bill content
from whole cloth or speculating about what the PUC might do; in any case, the
bill has been significantly revised already in the Senate, to address the same
broad purpose but to be more specific about program parameters and move the
primary administrative responsibility for programs to the Air Resources Board
rather than the PUC.

~~~
dragonwriter
FYI, in case the reference to Business Insider in the above seems odd, the
mods have apparently not only changed the headline to a more clickbait one
than it used to be, but also ibexplicably changed the source article from a BI
article to a nearly-identical (to the point that if they were turned in in a
the same class in school, the putative authors would probably be hauled in to
answer questions about plagiarism) WolfStreet article.

~~~
greenyoda
Is this the Business Insider article you're referring to?

[http://www.businessinsider.com/tesla-stock-price-
california-...](http://www.businessinsider.com/tesla-stock-price-california-
state-government-bailing-out-2017-7)

If so, it's written by Wolf Richter, the owner of the Wolf Street blog, and
has a link to his "original article on Wolf Street" at the bottom. Not
plagiarism.

HN Guidelines ask you to "submit the original source", so this is probably why
the HN headline was changed.

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aphextron
I don't understand why they are singling out Tesla here. There are currently 4
other large volume production EV's being sold in California (Nissan Leaf,
Hyundai Ioniq, Chevy Bolt, BMW i3).

EV's make good sense both economically and environmentally for California in
the long run, but we still need the tax incentives for the next few years
until battery costs come down with new production capacity.

~~~
valuearb
Because the benefits of the subsidy are disproportionately given to companies
that exhaust federal subsidies. And Tesla will be the only one to do that for
some time.

EV's don't make good sense "economically" for California yet. It's not
unreasonable to wait until battery costs come down so mass adoption comes
naturally.

They do make sense environmentally, but there is a far better way to
compensate them for the actual value of their environmental benefit rather
than a politically decided subsidy. California is already discussing doing
it's own Cap and Trade market. Instead of subsidizing "zero emission" cars, it
creates a market cost for carbon emissions, and raises the prices of gas
engined cars, and not just newly purchased cars, all cars.

And it's fair, if your Tesla gets all of it's electricity from coal fired
plants, you'll pay your fair share for that plants emissions.

~~~
cybernytrix
What about the carbon emissions in order to manufacture the car, dig up mines
for lithium etc? Surely that needs to be accounted as well.

~~~
valuearb
That's what a well designed cap and trade system should do.

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taneq
Is Tesla in trouble financially? And I mean actual can-no-longer-be-profitable
type trouble? That seems an odd call given that they've so far planned pretty
comprehensively, and delivered pretty much on their plans, and those plans
would have included the existing subsidy ending as soon as they hit higher
volumes.

The fact that they're hellbent on hitting those higher volumes ASAP indicates
to me that they know they'll still be profitable after the subsidies are gone.
In fact, they'll probably gain some advantage from the fact, as the only EV
manufacturer operating at any kind of volume, because it will raise the
barrier to entry for newer, still-lower-volume manufacturers.

So yeah, nice windfall for Tesla, but 'bailout' seems somewhat loaded.

~~~
valuearb
They raised a ton of money recently to cover the continuing investment they
forecast needing to make it to profitability. But they then turned around and
bought hemorrhaging Solar City, so it's unclear how long the cash will last
and whether it's long enough.

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BoorishBears
So if a P100D has the 0 to 60 of an exotic, but all the interior fit and
polish of a base trim CLA, taxpayers should... cover the difference in price
to a CLA? There has to be something missing here.

~~~
JumpCrisscross
Nope, you got it. Small group of people get to decide which products get how
much in subsidies, and by extension, which companies get how much taxpayer
money. Also, since it's a per-vehicle subsidy, it rewards large companies over
small ones. (Not to mention wealthy consumers over poorer ones.)

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woodandsteel
The Chevy Bolt got great reviews, and it was supposed to be big competition
for the Tesla 3, but so far sales have been disappointing.

[https://cleantechnica.com/2017/07/18/chevy-bolt-
production-r...](https://cleantechnica.com/2017/07/18/chevy-bolt-production-
ramps-tesla-model-3-production-ramps/)

Anybody have an idea why?

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gfody
>
> [http://vidak.cssrc.us/content/district](http://vidak.cssrc.us/content/district)

Wow what is it about Visalia and Tulare that would cause something like this?

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Fricken
Wow, if they're giving that much away to EV buyers, just think how much
they'll hand out to people who walk to work!

~~~
givemefive
yeah as someone that bikes 25 miles per day for commute it kinda bothers me
how many tax breaks are given to other forms of commute like trains, buses,
vansharing, EV, etc.

~~~
2bluesc
I bike as well and never thought of this. Now, I'll never be able to forget
it.

~~~
maxharris
One solution is to simply treat everyone equally and not give anyone a tax
break.

I know this is not what most people think, but in the context of good
governance, my view is that no (legal) behavior is any more or less
meritorious than any other.

~~~
kenjackson
Why would you think this? For illegal activities there is a hierarchy -- why
would there not be for legal activities?

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_jezell_
It's hardly a "bailout" when Tesla generates more revenue for the state than
these tax credits are worth. The sales tax alone on many of the current models
exceeds this tax credit.

~~~
JumpCrisscross
> _Tesla generates more revenue for the state than these tax credits are
> worth_

California collects a 7.5% sales tax on the purchase of new vehicles [1]. A
$40,000 car would thus generate $3,000 of state sales tax income. That appears
to be much less than the value of the proposed credits.

[1] [https://www.salestaxhandbook.com/california/sales-tax-
vehicl...](https://www.salestaxhandbook.com/california/sales-tax-vehicles)

~~~
lazyjones
> _A $40,000 car would thus generate $3,000 of state sales tax income. That
> appears to be much less than the value of the proposed credits._

Tesla sells expensive cars, revenue per car is currently near $90.000.

