Electric cars upend CA politics

Tesla Model S wikimediaAs California’s electric car industry heats up, Sacramento’s role in incentivizing the vehicles for environmentalist reasons has become an uncharacteristic political football.

Underscoring the disruptive effect of the often libertarian sensibility behind auto innovations, the controversy has pitted Republicans against wealthy coastal elites and Democrats against the automakers pushing the industry toward a zero-emissions future.

Republican populism

The problems started with the handsome benefits granted by the Golden State to buyers of lower-emissions vehicles, whatever their earning power. “Hundreds of Californians with household incomes of $500,000 or more have collected state subsidies for buying electric and hybrid cars under a program that is criticized as a taxpayer handout to the wealthy,” the Los Angeles Times reported:

“State regulators, in response, are restricting the subsidies to Californians who earn less than $250,000 or couples taking in less than $500,000. But that standard is also under fire from some lawmakers and anti-tax activists, who ask why subsidies worth up to $5,000 are given to people who can already afford the cars.”

According to some Republicans, the giveaway reflected the willingness of Democrats to shower privileges on the wealthy if their spending habits reflect liberal ethics.

Burgeoning business

But the electric car industry has also come under fire from the other side of the aisle — for taking advantage of pricey state programs designed to subsidize companies with outsized economic potential.

Last year, Tesla raked in $15 million in credits — a hefty share of the $150 million in total divided up among 212 companies — “drawing criticism about whether the electric car manufacturer deserved the money,” according to the Sacramento Business Journal. This year, the Journal noted, legislators signed off on $200 million for the so-called California Competes program, which chooses winners based on “employee wages and the industry’s importance to the California economy,” among other factors.

The economic stakes, already high for Tesla and a recovering California, have recently been ratcheted even higher: Tesla competitor Fisker has inked a deal returning the once-bankrupt luxury electric car company to California shores. Bought up last year by the China’s Wanxiang Group, Fisker “signed an 11-year lease worth an estimated $30 million” in Riverside County’s Moreno Valley,” the Times reported, “giving California its second electric car manufacturing plant after Tesla’s Fremont factory.

What’s more, a low-profile new entrant into the electric car market has announced the possibility of a California headquarters of its own. Gardena’s Faraday Future said “it’s scouting several locations for a new factory, fueling speculation about a state tax-credit race similar to last year’s push for Tesla’s gigafactory,” the Journal reported. “The company hopes to announce a location for a manufacturing plant sometime in the third quarter of 2015, and would bring cars to market in late 2017,” according to a spokesman.

Environmental pressure

Adding to the sense of chaos, the big climate change bills headed to the Assembly have activated opposition from lawmakers who find themselves caught in the ideological crossfire — or opportunistically seeking a quick serving of pork for their constituents. “Some moderate Democrats, charging ‘coastal elitism,’ say the bills will harm the middle-class families they represent in the Central Valley,” the San Jose Mercury News observed; “others are trying to shake down legislative leaders for handouts that benefit their districts.”

The legislation, added the Mercury News, would put gasoline-powered vehicles in the crosshairs — “cutting petroleum use by cars and trucks in half over the next 15 years and slashing greenhouse gas emissions to 80 percent below 1990 levels over the next 35 years.”

The electric car companies, of course, have an interest in seeing standards rise. As the Wall Street Journal recently noted, Tesla has pushed to ensure Sacramento’s mileage and emissions regulations could become “even more stringent,” while laboring “to keep other auto makers from loosening regulations in California.”

5 comments

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  1. Ronald Stein
    Ronald Stein 2 September, 2015, 06:44

    Even with all the incentives, California is home to 100,000 electric vehicles, the most of any state. The other 97% of California’s 30 million vehicles that DO NOT run on electricity or other alternative fuels rely on fossil fuels. Our mobile society is consuming 40 million gallons a day of transportation fuels. Sounds like a lot of gasoline, but it equates to about a gallon per day per vehicle!

    The California population is projected to increase from 38 million to 50 million by 2050, along with an increase in vehicle registrations from 30 million vehicles to 44 million vehicles.
    And in the years to come, even with more registered vehicles and more mileage to be driven, fuel consumption is projected to remain about the same due to ever increasing fuel efficiencies.

    Reply this comment
    • GoneCA
      GoneCA 3 September, 2015, 11:02

      And it is all of those CA taxes on the gallons of gasoline that is subsidizing the Cloud economy ie: wind, solar, and poofmobiles. a totally false economy is totally FALSE.

      Reply this comment
  2. Bruce
    Bruce 2 September, 2015, 06:45

    The taking from one and giving to another via legal plunder (theft by law), once started leads to socialism and escalates from there to paraphrase Frederic Bastiat in his book “The Law”. After the first legal plunder, other are asking “where’s mine” and seek to get their “fair share”. And on and on the legal plunder goes. Solar panels, no problem. We’ll take from those who can’t afford it and give to others (subsidies). And on and on it goes until…there is no money left to legally plunder. Bastiat, a Frenchman, warned the world back in the year 1850. No worries though, our politicians are smart? Society must wake up.

    Reply this comment
  3. Caveman51
    Caveman51 2 September, 2015, 14:39

    Many of California’s current problems are caused by a population explosion that is overwhelming our infrastructure and availability of affordable housing. Ironically the coastal elites may be a doing us a favor with their draconian laws that no one will want to live here anymore. But the further irony is that the people who would be most likely to leave are the middle class and small business people, leaving Califonia’s heavy tax burden on the coastal elites.

    Reply this comment
  4. Spurwing plover
    Spurwing plover 4 September, 2015, 16:40

    The perfect car for california liberals the Flintstone car just uuse your feet

    Reply this comment

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