Calif. throws subsidy at Tesla Motors

October 12, 2012 - By Joseph Perkins

Oct. 12, 2012

By Joseph Perkins

Memo to Occupy San Jose: I’ve got a ripe target for you on Santana Row, playpen for the Silicon Valley wealthy.

Not Gucci, Burberry, Ferragamo or the other upscale stores along the Row. But Tesla Motors, the electric carmaker, whose co-founder and CEO, Elon Musk, boasts a $2.4 billion net worth.

Musk is not merely a member of America’s 1 percent, for which Occupy has much contempt. He’s a member of the 1 percent of 1 percent.

That’s why it is so unseemly that the California Energy Commission just gifted Tesla Motors $10 million to pay for machinery it purchased for its Freemont factory. Tesla will use the tax dollars, supposedly, to add 500 workers to build its Model X, a rechargable sports utility vehicle.

“These investments in clean vehicles,” said Energy Commissioner Carla Peterman, “will reduce petroleum use, improve air quality, and create jobs, while demonstrating California’s commitment to a greener transportation future.”

The problem is the means by which Peterman’s agency made those “investments.” It’s by socking California drivers with a surcharge on their vehicle registration and smog check fees.

It’s bad enough that the 99.9 percent of us that are not multi-billionaires like Musk have to subsidize his car company. But it’s patently unjust that the state’s most needful drivers — the working poor, the unemployed, the elderly on fixed incomes — have to bear that burden.

The state Energy Commission’s $10 million giveaway to Tesla might be less outrageous if the company was non-profit; if it was developing its modern electric version of the old German gasoline-fueled “people’s car,” which came to be known here in the states as the Volkswagon.

But Tesla Motors is hardly manufacturing any low-priced, low maintenance people’s cars. It’s producing automotive toys for the decidedly well-to-do. The kind of volk who drop by its Santana Row showroom.

Indeed, Tesla’s very first offering to the car buying public was a $109,000 fully-electric roadster. Its second offering, the Model S, a luxury sedan, had a base price of $57,400 to $77,400.

Tesla’s Model X, which is scheduled to go into production in 2014, according to Tesla spokeswoman Christine Ra, will start at $60,000 and top out at $100,000.

Tesla is not building vehicles for the mass of Californians, who have made the Honda Civic and Accord, and Toyota Camry and Corolla the state’s best-selling cars. It’s targeting well-heeled California residents, those whose tastes run to Mercedes, BMW and other luxury nameplates.

There’s nothing wrong with Tesla positioning itself at the high end of automobile market.

It’s just hypocritical for the state government, led by a governor promoting a ballot measure that “asks California’s wealthiest to pay a little more” in taxes, is asking California’s poor and middle class to pay a little more in vehicle registration and smog check fees to subsidize a car company owned by one of the state’s wealthiest residents.

The thing of it is, Tesla doesn’t even need the state’s $10 million gift. The company raised $200 million in a secondary stock offering just last week. CEO Musk says the company will be “cash flow positive” as soon as next month and profitable in 2013.

So $10 million will hardly make or break Tesla. And if there was even the remotest possibility of that happening, Musk’s pockets are deep enough to keep his car company afloat.

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Comments(53)
  1. Ted Steele, The Decider says:

    Green cars like this are THE future— it’s good!

  2. Tax Target says:

    Ok Mr Decider, if you want ‘em – dig deep brother cuz I don’t want to pay for them. It is beyond slimy to think that a billionaire gets that kind of money from the Kommisar of clean air but at the expense of the Kalifornsky tax payers!!! Give me an f… ing break!

  3. Rex the Wonder Dog! says:

    “These investments in clean vehicles,” said Energy Commissioner Carla Peterman, “will reduce petroleum use, improve air quality, and create jobs, while demonstrating California’s commitment to a greener transportation future.”
    ==
    Once again, who gave our gov the right to “invest” in ANY company??? And why are they picking and choosing “investments” of the taxpayers??

    Gov is not there to “invest”. This is so troubling on so many levels, with Solyndra being one of the biggest problems, but also the fact that the founder is one of the top 300 richest Americans, WHY ARE TAXPAYERS paying for equipment for HIS company?????

  4. Rex the Wonder Dog! says:

    Ted Steele, The Decider says:

    Green cars like this are THE future— it’s good!
    ==
    Then YOU can pay for it-OK you progressive commie surrender money ;)

  5. Ted Steele, The Decider says:

    Hey Poody— Don’t you think we should let the normal people have their blog back? I mean, after months and years of the nothing drivel you and I post back and forth, don’t you think we should let the adults have their blog back sometimes? Or do you just need to rock your OCD a bit more?

    Teddy

  6. BobA says:

    Why is California throwing money at a company who builds cars that only the rich and wealthy can afford to buy?

    This tells you everything you need to know about just who the politicians really cater too.

    Nikola Tesla’s vision was to provide free and abundant energy to the world; not expensive toys for rich people that 99.9& of of the people will never be able to afford.

  7. surfpunk says:

    joseph,you forgot the federal money they also received.

  8. Ted Steele, The Decider says:

    BobA- Often as tech develops prices come down.

  9. Douglas says:

    Think of it as a $10 million tax break to the job providers. A rising tide raises all ships.

  10. Ted Steele, The Decider says:

    It can be true Douglas– But this is where I am cautious—- it’s risky trying to pick winners in the biz world. I would prefer to see whole sector involvement or lack thereof— ie while a fed issue…—– let’s approach the green auto sector by stopping the massive oil company subsidies…..

  11. Rex the Wonder Dog! says:

    Think of it as a $10 million tax break to the job providers.
    ==
    Why should taxpayers be on the hook for it???????? When the guy who owns the company is a Bazillionaire?????

    I want $10 million to start a lawn cutting service, using electric mowers, can I get $10 million?? Think of it as a tax break for a future green job provider………

  12. Ulusses Uhaul says:

    You’re kool-aid drinkers…save up and go to Europe….junker mini cars everywhere.

    Do you want a Fiat or a Morris Minor when most of you own cammie painted Ford Falcons with honker V8’s?

  13. BobA says:

    Ted:

    An an electrical engineer, I can think of several technical reasons why batteries powered cars will never be cheap enough for the average person to buy in our lifetimes. Besides, there are more promising technologies under development that will surpass batteries as a source of power for cars.

    The only reason electric cars have any viability at all is because of heavy government funding. Without it, electric cars would be just a one off novel idea with esoteric appeal.

    Think of battery powered electric cars as the equivalent of 8-track tape. Here today, abandoned tomorrow for something better.

  14. Ron Kilmartin says:

    There is no more efficient vehicular power than a gasoline or diesel engine. The Tesla will require twice as much or more energy from generation to where the rubber hits the road. Green – that’s a laugh.

  15. Ted Steele, The Decider says:

    Boba– with attitudes like yours we’d still be riding horses. Take your Metamucil ™ and go to sleep.

  16. dyspeptic says:

    Elon Musk is a greedy crony capitalist. Shame on him for exploiting California taxpayers. We need the money more than Mr. Moneybags and his bought and payed for politicians.

  17. Dyspeptic says:

    Rex said – “I want $10 million to start a lawn cutting service, using electric mowers, can I get $10 million?? Think of it as a tax break for a future green job provider………”

    Exactly!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    I want $10 million to start a CO2 reduction program by stuffing a sock in the pie hole of every enviro-geek who thinks this is a good idea :-)

    In reality, only the politically connected crony capitalist pigs like Elon Musk and Diane Feinstein’s hubby get the subsidies. It really has nothing to do with make believe greenie weenie jobs, that’s just a cover story for the yokels.

    One last thing – Go St. Louis Cardinals!!! I hope they beat DiFi’s San Francisco Giants like a cross eyed mule.

  18. Rex the Wonder Dog! says:

    In reality, only the politically connected crony capitalist pigs like Elon Musk and Diane Feinstein’s hubby get the subsidies. It
    ==
    That’s right, it is crony capitalism, and a bug reason we as a region, state and nation are running $32 BILLION state deficits (just 3 months) and $16 TRILLION national deficits.

    Do you know how may deals Difi’s hubby Blum has scored off the feds for his CB Richard Ellis real estate firm??? Billions worth, and it has been going on for over 20 years, he was getting steered massive deals from Difi going back to the 1990’s when she was first elected.

  19. Douglas says:

    Electric drive is much more efficient than internal combustion engines. Even with he considerable line loss, even using energy from a coal fired generator, electric drive is more efficient and less polluting.

  20. Tom Tanton says:

    Folks that are taking these insane subsidies see what the future holds–taxpayer revolt–and are just getting what they can while the gettin’ is still good. Little do they know criminal cases pesist beyond the termination of the prok. It’s funny–almost–that yesterday’s news pointed out that even Al Gore is divesting his “green investments” yet California continues to buy into the Ponzi scheme. The only way out, now, is default.
    btw, also some recent studies have suggested EV’s are more polluting, when calculated on life cycle basis, counter to Douglas’s assertion just above (and that’s regardless of fuel for generation of electricity), due to toxic used battery disposal, rare earths mining practices in China, etc.

  21. Ted Steele, The Decider says:

    But you republiclowns LOVE the oil subsidies! LOL

  22. Rex the Wonder Dog! says:

    I’m an Independent fool, I do not carry the partisan politics around my neck like an anchor, which is what Teddy does.

  23. Ulysses Uhaul says:

    How do you get through the day? You’re a fanatical partisan……spare us your psch tweets!

  24. Douglas says:

    Another subsidy?

    Currently there is no question (with reasonable people, anyway) that electric vehicles produce much fewer emissions and are more than twice as efficient as internal combustion engines.

    When comparing costs per mile, however (EVs are much cheaper) they usually compare the cost of electricity per kwh to the cost of gasoline.

    Part of the problem with this is that much of the cost of a gallon of gas is state and federal taxes. These taxes are used primarily to build and maintain roadways. The true cost of EVs would need to account for their wear and tear on the roads.

    The state has already proposed in the past a “per mile” charge which could be imposed on autos and trucks. The last one I recall would rely on GPS units on all vehicles to register vehicle usage.

  25. Rex the Wonder Dog! says:

    OMG Dougie actually posted a comment that made sense :)

    You’re learning my young padawan.

    Keep hanging out here w/ the Big Boys and your training will soon be complete.

  26. jimmydeeoc says:

    LOL @ Rex…..

    funny…that was my first thought after reading Dougie’s latest post as well.

  27. Douglas says:

    Efficiency is just one part of the equation. Electric vehicles are more than twice as efficient as internal combustion engines, a bus is 10% more efficient (up to 300% more efficient if fully loaded.) Airplane is at least 20% more efficient. Passenger train, 80 – 90% more efficient.

    No reason why the LEAST efficient mode of personal transportation shouldn’t pay more to subsidize more efficient modes.

    Like using gas taxes to subsidize mass transit and electric vehicles.

  28. Ted Steele DD says:

    Poodle– you are more Republican than Nixon little buddy—- but a bit more right wing.

    …and….

    0 for 13 ™

  29. Ted Steele DD says:

    …and waaaaaaay more condescending.

  30. Bill - San Jose says:

    Question for the electric friends … with what electricity?

    You beg for green energy and don’t have the forward thinking to realize we don’t have enough juice in the state as is. We are closing down power plants that don’t meet green standards. Unless you are telling me that nuclear plants are being built as we speak, tell me where this ends up making any sort of logical sense.

    You can’t. Next topic about boneheads who think they know what’s really going on.

  31. Ted says:

    Poodle. SHOULD we let the grown ups have their blog back instead of our usual dull no content back and forth?

  32. Rex the Wonder Dog! says:

    Teddy, should YOU stop using sock puppets? I vote YES, you progressive surrender monkey :)

  33. Ted Steele, The Decider says:

    Seriously Poodle— you know the people who run this blog know who’s legit and who aint. Do you think they’re stupid?

    Honestly Poody– don’t you think that you and I ought to give this blog back to the normal grown up folks rather than continuing the contentless drivel we ad nauseum throw back between each other?

    Or are you so self important that you can’t stop?

    Honestly.

  34. Rex the Wonder Dog! says:

    Teddy, are you (and the sock puppets) taking the wager or not?????

    Or are you running for the hills again, with your tail tucked b/c YOU KNOW I AM RIGHT!!!!!!!!!!!!!! (again, 151-0)

  35. Rex the Wonder Dog! says:

    Prop 30 losses you get lostuntil Nov 14. Prop 30 wins I will.

  36. Ulysses Uhaul says:

    Get lost forever.. do us and Big Betty a favor!

  37. Rex the Wonder Dog! says:

    I knew you would run from that teddy, you are a sad pathetic loser who is all talk, no walk.

  38. Ted Steele, The Decider says:

    If the Poodle wins in Nov he will be 1 for 14 ™ ! You will truly enjoy the limelight! You will have a few days of actually feeling happy! You will have actual feelings of adequacy! I could be so great for you! The very best of luck!

  39. Ulysses Uhaul says:

    Poodle…Poodle….Poodle

  40. Normkat, Poodle(s) Master says:

    Never fails to amaze how it’s always about cleaner air and water.. as gubamint subsidies drain folks pocketbooks so others can chase pipedreams.. the same pathetic arguments are made about the environment.. when the planet has had enough of us, it will let us know. I don’t need Progre$$ives in ‘green’-cloth telling me the world is coming to an end.. unless we repent of fossil fuel or nuclear power.. and then watch while those pushing it get rich doing so.. You’d think people were smarter than that by now, but few know anymore about science than they do about religion.

  41. Rex the Wonder Dog! says:

    Like I said, I win you be gone for a week, I lose I be gone…..still no confirmation ehhh teddy steals….you KNOW better troughie, prop 30 is as good as dead, right now.

  42. Ted Steele, The Decider says:

    If the Poodle wins in Nov he will be 1 for 14 ™ ! You will truly enjoy the limelight! You will have a few days of actually feeling happy! You will have actual feelings of adequacy! I could be so great for you! The very best of luck!

  43. Ted Steele, The Decider says:

    Awwwwww— Rex the Poodle is all over the www—-

    http://www.flickr.com/photos/tiggamiru/3051631044/

  44. Rex the Wonder Dog! says:

    LOL…. that is a pretty cool pic Teddy. I love it!

    I am much more laid back, and friendly, and…well I look more like this (same album);

    http://www.flickr.com/photos/tiggamiru/3065046033/in/photostream/

    I think this could be you “Cocoa Puff” :) ;

    http://www.flickr.com/photos/tiggamiru/3088205758/in/photostream/

  45. Ted Steele, The Decider says:

    Rex the Poodle is all over the WWW—-mmmmmmmmmmmmmmmmmm

    But don’t you think we should let these normal serious people have their blog back?

  46. Rex the Wonder Dog! says:

    Teddy, I like pounding you into the stone ages too much to let up on your propaganda lies ;)

  47. Ted Steele, The Decider says:

    You only pound me in your perverse and pathological dreams sweetcheek poodle!

    lol
    too easy ™
    0 for 13 ™ !

  48. Rex the Wonder Dog! says:

    You only pound me in your perverse and pathological dreams sweetcheek poodle!
    ==
    Teddy, you’re “projecting” again ;)

  49. Ted Steele, The Decider says:

    wow— you’re a sick little poodle!

  50. jackie cox says:

    I keep up with elons efforts to get government contracts loans subsidizies as a big political donor for obama, and has lost billions in his time spent as americas most promising entrepauner. if you believe what you read on the internet, where the car company spends billions to make around 3,000 cars since 2002 while claiming to be making and selling 500 cars a week, it looks like a last ditch effort to lure investors into the company or buy one of their bricks, while solar city and spacex are being defunded, correcting the mistakes of obama and czars funneling american taxpayer funds to elon musks bankruptcy expert frauds, in loans, contracts, subsidies. Where it becomes obious to anyone who take time to do the research—I look forward to a point in time when the commandant is released from his self inflicted duty to force his homosexual manifesto (sodomist) on christian america, and assist the federal reserve in looting our treasury. When we end the voting clan given 7 days of voting Without showing proof of who they are at the thousands of ACORN POLLING STATIONS ACROSS AMERICA, IN THE 2008 AND 2012 ELECTION FRAUDS

  51. jackie cox says:

    WHEN WE END THE CHARADE OF POLITICS BY THE CRIMINAL GANG OF LAWYERS, JUDGES, POLITICIANS, LOBBIES, FEDERAL RESERVE, OR THE WORLD CLASS MAFIA FINGER ON AMERICA LOOTING OUR TREASURY AT MORE THAN A TRILLION A YEAR IN ADDITION TO STEALING ANOTHER 80 BILLION A MONTH THEY GIVE THEIR BANKS, WHO SPIRIT IT OFFSHORE INTO OTHER OFF SHORE GEOPHYSICAL ASSETS

  52. jackie cox says:

    I READ ALL THE P STUNT RANTS TRYING TO GET THE UNWARY INVESTOR TO INVEST IN TSLA WHO CLAIM TO BE MAKING 500 CARS A WEEK AND SELLING 500 CARS A WEEK, ETC, WHEN ONLY NEAR 3,000 TSLAS HAVE BEEN MADE SINCE 2002, WITH BILLIONS LOST—YET THE NYSE REVEALS ITS TRUE COLORS ALLOWING THE WORTHLESS IPOS, ALLOWING ELON TO INVEST 15 MILLION ELEVATING THE IPO SHARES—ITS CRIME PURE AND SIMLE, BECAUSE OF HIS POLITICAL DONOR TO OBAMA WHO GIVES HIM KICKBACKS IN THE FORM OF GOVERNMENT CONTRACTS, SUBSIDIES, AND OUT RIGHT LOANS. ITS BIZARRE WHEN CRIMINALITY AND TREASON RULE OUR NATION

  53. jackie cox says:

    12,000 TAXPAYER SUBSIDIES FOR 3,000 CARS =36 MILLION IN TAXPAYER FUNDS FOR EAH CAR ELON SELLS TO THE RICH AND POWERFUL WHO HAVE FUNDS TO HAVE ATTENDANTS REQUIRED KEEPING TH CAR FROM TURNING INTO A BRICK—WHY???

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