California Tesla car manufacturer is kicking California in the face by deciding to build a gigantic 10 million battery manufacturing plant in another state—no decision yet on which state that is going to be.
The tyrannical California Air Resources Board has forced car manufacturers in California to reduce their emissions to 80% below 1990 levels and all new cars sold in California by 2040 have to be electric or hybrid. To add further regulations, Governor Jerry Brown has ordered that by 2025, 1.5 million zero emission vehicles have to be on California roads.
The State of California has been good to Tesla and electric car manufacturers and California taxpayers, perhaps unknowingly, help them sell cars because their taxes pay a $2,500 EV rebate and a $7,500 tax credit for each person who buys an electric car along with $1,000 rebate for turning in their gas guzzlers. After all, the Democrats have to have more “green cars” on the road.
Much to the chagrin of the oppressive Socialists in California’s State Legislature, the electric cars have not been popular with the consumers, so the Air Resources Board amiably found a way for the car manufacturers to comply with their dictates by giving them permission to buy “pollution credits.” As a result, Tesla increased their net income by 300% (to a tune of $119.5 million) in 2013 by selling their excess credits to other EV manufacturers.
However, and this is the key. California has run out of the $200 million they had appropriated from its green slush fund. A year ago at this time, there was a waiting list for the rebates while the State Legislature appropriated an additional $15 million for rebates last June. Since the $15 million, an additional $45 million was appropriated not to mention the $20 million loan from the state’s Vehicle Inspection and Repair Fund.
What about rebates for 2014? The program is empty and needs another $30 million to meet the demand.
Now watch for the taxpayers to get slapped with extra taxes or fees. As the Democrats in the State Legislature watched the slush fund shrink, they already voted to extend the smog abatement fee ($20) and along with adding other vehicle surcharges that were supposed to take effect in 2024 and will now take effect in 2016.
The taxpayers got smacked with an additional 18 years and it’s anyone’s guess from where continuing funds will come.
According to a 2013 Wall Street Journal article, “To keep the party going, Democrats might next tap the state’s cap-and-trade revenues, which they probably would have done this year (2013) if Mr. Brown hadn’t raided them to plug a $500 million budget hole.”
(Aha! So that’s where the money came from to “balance” our state’s budget.)
So if the State of California and its taxpayers have been so good to Tesla, why are they building a gigantic 10 million square foot facility to build batteries in another state? No one knows for sure, but we get a hint in an article in the Reno Post-Gazette in a Nevada effort to get the factory:
Dennis Donovan, a principal at New Jersey-based site selection firm Wadley Donovan Gutshaw Consulting listed what Tesla would be looking for in its search for a factory site. ‘These include utility infrastructure, availability of land, ease of acquiring environmental permits, a good supply of semi-skilled labor and the presence of community colleges that can train technicians.’
California seems to meet most of the requirement in abundance – with the exception of the ease of acquiring environmental permits. Ironic, if the permitting is the hurdle that convinced Tesla to look elsewhere since this is a car company that lives on its reputation as an environmentally friendly product and survives because of its ability to sell pollution credits.
I contacted California gubernatorial candidate, Assemblyman Tim Donnelly, to get his response to Tesla’s news. Donnelly says,
It sounds to me like California’s obsession with the carbon foot print has made the government footprint so big that even Tesla, the greenest of the green, can’t do business in the golden state.
There’s a limit to how much hassle and regulations companies are willing to go through to build a factory and when a company like Tesla, a net recipient of massive state government incentives to help sell their product to meet California’s air standards, they are still not willing to invest in California.
If ultimately they cannot make a profit, then the whole green model is economically unsustainable. So the green economy model that California is predicated on now is ultimately unsustainable if we do not create more jobs.