thebigp

--18kh.,b28
I've been pointing out for a while that Tesla has one big problem. Well, two big problems, actually. One is that a company that has never produced cars on a big-company scale--by the hundreds of thousands--now has to produce them at that scale.
The second is that the moment Tesla succeeds at this first goal, the large federal tax break meant to encourage people to buy electric cars starts to phase out. That might not be fatal to sales of the Model S, since people willing to shell out $100,000 for a car are likely to be less budget-conscious. But it will almost certainly be a big hit to sales of the less expensive, mass-market Model 3.
So it looks like California is taking time out from dealing with its state budget crisis and planning to bail out Tesla with its own tax breaks.
"This is how the taxpayer-funded rebates in the "California Electric Vehicle Initiative" (AB1184) would work, according to the Mercury News: 'The [California Air Resources Board] would determine the size of a rebate based on equalizing the cost of an EV and a comparable gas-powered car. For example, a new, $40,000 electric vehicle might have the same features as a $25,000 gas-powered car. The EV buyer would receive a $7,500 federal rebate, and the state would kick in an additional $7,500 to even out the bottom line.'
"And for instance, a $100,000 Tesla might be deemed to have the same features as a $65,000 gas-powered car. The rebate would cover the difference, minus the federal rebate (so $27,500). Because rebates for Teslas will soon be gone, the program would cover the entire difference--$35,000. This is where Senator Vidak got his '$30,000 to $40,000.'
"The Tesla Model 3 would be tough to sell without the federal $7,500. But this new bill would push Californian taxpayers into filling the void. It would be a godsend for Tesla."
Back in the day, they used to say that "What's good for General Motors is good for America." Today, I guess the new motto is, "What good for Tesla is good for California." the California state Assembly passed a $3-billion subsidy program for electric vehicles, dwarfing the existing program. The bill is now in the state Senate. If passed, it will head to Governor Jerry Brown, who has not yet indicated if he'd sign what is ostensibly an effort to put EV sales into high gear, but below the surface appears to be a Tesla bailout. Tesla CEO Elon Musk speaks at a company shareholder meeting on June 7, 2017.
BUSINESS INSIDER---The California state Assembly passed a $3-billion subsidy program for electric vehicles, dwarfing the existing program. The bill is now in the state Senate. If passed, it will head to Governor Jerry Brown, who has not yet indicated if he’d sign what is ostensibly an effort to put EV sales into high gear, but below the surface appears to be a Tesla bailout.
Tesla will soon hit the limit of the federal tax rebates, which are good for the first 200,000 EVs sold in the US per manufacturer beginning in December 2009 (IRS explanation). In the second quarter after the manufacturer hits the limit, the subsidy gets cut in half, from $7,500 to $3,750; two quarters later, it gets cut to $1,875. Two quarters later, it goes to zero.
Given Tesla’s ambitious US sales forecast for its Model 3, it will hit the 200,000 vehicle limit in 2018, after which the phase-out begins. A year later, the subsidies are gone. Losing a $7,500 subsidy on a $35,000 car is a huge deal. No other EV manufacturer is anywhere near their 200,000 limit. Their customers are going to benefit from the subsidy; Tesla buyers won’t.
This could crush Tesla sales. Many car buyers are sensitive to these subsidies. For example, after Hong Kong rescinded a tax break for EVs effective in April, Tesla sales in April dropped to zero. The good people of Hong Kong will likely start buying Teslas again, but it shows that subsidies have a devastating impact when they’re pulled.
That’s what Tesla is facing next year in the US.
In California, the largest EV market in the US, 2.7% of new vehicles sold in the first quarter were EVs, up from 0.4% in 2012, according to the California New Dealers Association. California is Tesla’s largest market. Something big needs to be done to help the Bay Area company, which has lost money every single year of its ten years of existence. And taxpayers are going to be shanghaied into doing it.
To make this more palatable, you have to dress this up as something where others benefit too, though the biggest beneficiary would be Tesla because these California subsidies would replace the federal subsidies when they’re phased out.
This is how the taxpayer-funded rebates in the “California Electric Vehicle Initiative” (AB1184) would work, according to the Mercury News: AB1184 would be a huge expansion of the current Clean Vehicle Rebate Project which has doled out 115,000 rebates for $295 million to buyers of EVs and hybrids since 2010, averaging about $2,550 per rebate.
Under AB1184, hybrids and hydrogen powered cars are not included, and rebates for plug-in hybrids are slashed – perhaps to keep Toyota’s technologies at bay.
Even the current, relatively small Clean Vehicle Rebate Project has been lambasted as a subsidy for the wealthy who can afford to spend $100,000 on a set of wheels. A study, cited by the Mercury News, showed that of nearly 100,000 rebates, over 80% went to Californians with incomes over $100,000. This notion of a subsidy for the wealthy also applies to the federal rebate.
So California’s program was adjusted last year to cut rebates for wealthy buyers and increase rebates for low and moderate income buyers. That hurt Tesla. Another reason for a new program to make Tesla whole.
By the time we’re ready to get rid of our internal-combustion-engine car, battery technology will have improved further. We’d even pay a little more, just to get the benefits of an EV. My wife drives 45 miles a day; she’d no longer have to go to the gas station. The EV would be charged at night in our garage. Fuel savings would be substantial. Maintenance hassles and costs would be slashed – a benefit for me. And EVs are great to drive.
We’ll buy that EV even without incentives if they go away by then, though we’ll try to maximize any incentives with a grateful nod to our beaten-up fellow taxpayers. But piling on incentives is no longer the way to go. Piling on incentives that might be $10,000 or $20,000 or more per vehicle is insane. Piling on incentives to support a money-losing company that will soon lose the benefit of the federal subsidy is going way too far.
How will the funds be extracted from taxpayers? California’s Cap and Trade has already been short-listed. . In my backyard, where I live, people are very, very poor, and they are already paying into Cap and Trade. If Cap and Trade continues to go forward, that could add another 40 cents, 45 cents, maybe more to the cost of a gallon of gasoline, for those folks… [who] are still not going to be able to afford these $70,000+ cars.”
“Electric car companies are having trouble making it in the market-place without heavy government subsidies. So they propose this law to not only boost their sales but also to ace-out their competition. The Legislature is once again picking winners and losers in what is supposed to be a free-market.”
source- Leland shenfield, evony thompson, quora, ca air resources board, ca electric vehicle 9nitiative-ab1184, senator vodak, elon musk, clean vehicle rebate project, mercury news

boatbob2

WHY??? would ANYONE buy a Tesla?? granted,the Tesla is a great looking car,That you have to charge over night,after buying and installing the charger into your garage,(then you pay for that electric on your next bill) then paying MORE money,for a car to go over 300 miles on a charge. My Totota Prius,gets a little over 50 MPG,costs less than a Tesla,drives as far as I want to drive,and generates its own electricity...........