California Senate Bill 40 — Proposal To Limit Tax-Funded Rebates To Cars Under $40,000 (Subtext: So, No Teslas)
A proposal to limit tax-funded rebates to cars (i.e., electric ones) under $40,000 in price was recently put forward in California, via Senate Bill 40. The bill comes to us via Senator Ted Gaines, of “gold shovel for Elon Musk” infamy.
Given that California has, so far, paid out $34 million to Tesla Motors (via 13,600 $2,500 rebate grants), I think the subtext of this move is clear — no more rebate money for Tesla.
This seems especially clear when remembering that Senator Gaines was intimately involved in California’s bid for the Gigafactory — including having the aforementioned gold-painted shovel delivered to Tesla’s headquarters in Silicon Valley when the company was deciding where to locate the factory.
Considering that Elon Musk and Tesla went with Nevada, not California, it seems pretty likely that this new bill is (at least somewhat) related to the loss of the Gigafactory (and the +6,500 jobs likely accompanying it)….Doesn’t it?
I will say, though, that the bill (and its wording), is rather sensible — I’m not sure that I find fault with it, regardless of the possibly targeted and malign motivation behind it.
Commenting on the bill, Senator Gaines noted: “I would much rather help people who are middle class. A $40,000 car is still expensive.” (He apparently drives a $26,000 Subaru.)
The Sacramento Bee provides some interesting comments:
If Tesla decides to fight Gaines’ bill – its spokesman didn’t respond to me – it almost surely will die. The staff at the air board last year proposed restricting rebates to cars costing $60,000 or less. Tesla opposed it; it stalled.
Musk has the sway that comes with owning a car factory in Fremont, and the clout that comes with hiring Platinum Advisors and California Strategies, the sixth and 10th largest-billing lobbying firms in town during the 2013-14 legislative session.
If anything, the state will expand spending on rebates for electric vehicles this year. Governor Jerry Brown is calling for a 50% reduction in gasoline use by 2030, and de Léon has introduced legislation to that effect. To attain that goal, we’d need to reduce gasoline consumption to levels from the mid-1960s, when there were 18 million Californians, not almost 40 million of us. To do that, we’re going to need to buy many more electric vehicles.
In the first 10 months of 2014, Californians bought 24,007 electric vehicles, such as Teslas and Leafs, and 24,710 plug-in electric vehicles, such as Volts. That represents 3.25% of the 1.5 million vehicles sold in the state between January and October 2014.
[Yes, the author should have written “plug-in hybrid electric vehicles” toward the end there….]
So, good, but not quite there in other words — making it seem unlikely that the rebate will be capped.
While potentially cutting off Tesla buyers from the $2,500 rebate would be unlikely to have much of an effect on sales, it’s a point that may be made moot anyway by the planned release of Tesla’s “affordable” Model 3. And perhaps when the Gigafactory is completed and up-and-running, prices/costs on the other models will be slashed somewhat as well?
Image Credit: Tesla
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