My friend A. J. Delgado has a good piece over on the homepage on the problems electric car maker Tesla is having with Governor Chris Christie and the New Jersey legislature as the company challenges state law that protects the antiquated dealer model preventing car companies from selling their products directly to consumers.
I’m of two minds on this. One, I agree with A. J. that New Jersey is treating Tesla unfairly, but two, as Tesla is a company that owes its existence to government welfare and environmental edicts, I find it quite amusing that they’re now complaining about the U.S. leviathan that gives them life. A. J. notes Tesla’s duplicity in her piece:
New Jersey is just the latest state seeking to block Tesla. Although the company has received hundreds of millions of dollars in federal and state subsidies — in the form of loans, air-pollution credits, and tax breaks for buyers — Tesla finds itself on the side of the free market when it comes to the state-by-state struggle against America’s patchwork of car-dealer protections.
Let’s check out the recent headlines to help further explain my apathy to Tesla’s predicament.
- US News & World Report, 12/30/13: “Tesla’s Government Handouts Are the Gift That Keeps On Giving; The company is profitable, yet keeps receiving tax subsidies.”
- Slate, 5/29/13: “How the U.S. government’s bungled investment in the car company cost taxpayers at least $1 billion.”
- Washington Post’s “Wonk Blog, 5/30/2103: “Should the government have made more money off Tesla?” (Responding to the Slate piece above)
And Tesla owes its “profitability” to the great Sate of California’s regulatory zealotry and generous taxpayer base. First there’s the state’s regulatory scheme that gives Tesla environmental tax credits which it then sells to the legacy car companies who can’t meet California’s emission regulations . . .
- Los Angeles Times, 5/5/2013: “Tesla drives California environmental credits to the bank”
. . . and then some more breaks, this time to “boost production”:
- San Francisco Chronicle, 12/17/13: “Tesla gets $34.7 million tax break to boost production”
And how does Tesla repay California? With a kick to the groin:
- Los Angles Times, 3/7/14: Tesla has already ruled out California for the plant costing as much as $5 billion and employing 6,500 workers. Arizona, Nevada, New Mexico and Texas are in the running.
Tesla has been playing both sides of the system for far too long. The company survives because of onerous regulations that put a boot to the throat of the legacy car companies. Now that the regulatory boot is aimed at Tesla, the company expects a pass?
As bad as Chris Christie may be acting on this, Tesla has long used politicians for its own gain. And now, it’s payback time.