California’s climate-crazy legislature is coming to the rescue

Brown is taxing the middle class to subsidize buyers of overpriced Teslas

CHICAGO — When the sale of its 200,000th vehicle occurs later this year, Tesla buyers will no longer be able to claim a $7,500-per-vehicle federal tax credit for purchasing one. But fear not! California’s climate-crazy legislature is coming to the rescue.

Gov. Jerry Brown (D) and state legislators plan to pass a $3 billion electric vehicle subsidy to replace the soon-to-end federal rebate Gov. Jerry Brown (D) and state legislators plan to pass a $3 billion electric vehicle subsidy to replace the soon-to-end federal rebate. Under California’s generous program, electric vehicle buyers could soon receive up to $40,000 to buy’s Tesla’s most expensive models. Despite the federal government having provided a $465 million low-interest loan for Tesla to develop a cheap electric vehicle in 2009 and the billions of dollars in tax credits given to buyers, Tesla has continued to turn out $110,000 luxury cars designed for and marketed to millionaires. Those buyers obviously could afford to pay the full freight for their vehicles but instead took money from the poor and middle-income households to fund their “green lifestyle” purchases. The first electric vehicles were created as early as 1828, 50 years before Germany’s Karl Benz put the first gasoline powered vehicles on the road. Contrary to popular belief, electric vehicles were never new, orphan technologies meriting government support to get off the ground. Gasoline-powered cars won out in the marketplace more than 100 years ago because they were comparatively more affordable, powerful, comfortable, reliable, and could go long distances between fueling—a combination of factors electric vehicles cannot match to this day, despite the billions received in government support.

Subsidizing billionaire Tesla CEO Elon Musk’s electric-car dreams does little to reduce carbon dioxide Spurred by the Obama administration’s focus on climate change, government began pushing the uncompetitive technology once again in 2009, but in 2016, only 159,333 electric vehicles were sold in the United States—less than one-tenth of 1 percent of the 17.55 million vehicles sold nationwide. Tesla sold less than 47,000 of its $100,000-plus cars during that period. Aside from receiving substantial federal tax credits and a massive government low-interest loan, Tesla and its wealthy customers also benefit from other subsidies given at the expense of everyone else, including state tax incentives and free charging stations. A 2015 study from researchers at the University of California at Berkeley and National Bureau of Economic Research found the richest 20 percent of Americans received 90 percent of the hundreds of millions of dollars given in taxpayer subsidies for electric vehicles. The future of Tesla is far from assured. It misses its sales and production targets each year. Even with government support, Tesla consistently loses hundreds of millions of dollars annually, and Tesla has already warned there could be manufacturing delays of its relatively low-cost $30,000 to $50,000 Model 3, which could result in customers not receiving their cars for years. While California may keep Tesla in business for a little while longer, its lifeline to Tesla can’t change the fact that even if one believes humans are causing climate change, subsidizing billionaire Tesla CEO Elon Musk’s electric-car dreams does little to reduce carbon dioxide.

California’s tax credit for Tesla is nothing more than welfare for the well-to-do, and it’s time to end it Greenhouse gases will continue to increase from the electric power sector as new natural gas or coal-fired power plants will be built to charge the new Tesla vehicles on the road. Rather than reducing carbon dioxide, the switch to electric vehicles simply shifts emissions from the tailpipe to the smoke stack. The sun doesn’t shine at night, when most cars are charged, so solar power won’t work for most electric-vehicle owners. And wind power only works when the wind is blowing, making it very unreliable. In addition to the additional electric power plants required, millions of acres of land would need to be destroyed to mine widely dispersed rare metals necessary for the batteries and various electronic parts used in Tesla cars. And millions of tons of greenhouse gases will be spewed, mostly in China, in the mining, processing, and shipping processes. California’s tax credit for Tesla is nothing more than welfare for the well-to-do, and it’s time to end it.



H. Sterling Burnett -- Bio and Archives H. Sterling Burnett is a research fellow on energy and the environment at The Heartland Institute, a nonpartisan research center Arlington, Ill. Readers may write him at The Heartland Institute, 3939 North Wilke Road Arlington Heights, Illinois 60004 or e-mail him at hburnett @ heartland.org

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