“It could be attention-grabbing to get the details on how a lot California has invested in Tesla — the lots of of thousands and thousands of tax subsidies we’ve supplied that firm,” Newsom, who likes to tout his decades-long relationship with Musk, informed reporters at an occasion final fall.
Musk has financially backed California’s bold governor, maxing out marketing campaign donations for Newsom’s 2018 run and giving incessantly to different Democratic lawmakers. And regardless of the headline-making nature of the HQ transfer, Tesla continues to develop its California-based operations.
Listed here are a number of the methods Musk has come out forward in his Twitter-famous feuds with Sacramento:
1. Tesla and tax credit
A whole lot of thousands and thousands of {dollars} in California’s regulatory credit for electrical automobiles buoy Tesla’s quarterly earnings, in keeping with Trefis, a monetary evaluation service.
Tesla can promote the credit it receives from the state for manufacturing electrical automobiles to conventional automobile firms that in any other case wouldn’t be capable of adjust to the federal government’s zero-emissions gross sales guidelines.
In 2019 and 2020, Tesla’s profitability relied on the credit — though now the corporate margins would keep lots wholesome with out them.
The sheer scale of those advantages has proved a sore level with progressive lawmakers. Former Assemblymember Lorena Gonzalez, a San Diego Democrat, complained when Musk introduced his headquarters transfer to Texas that the billionaire “made $200 billion because of subsidies from CA taxpayers.”
On-line spats apart, Musk’s subsidies don’t look to be at any threat given California policymakers’ aggressive assist for EVs — and their equally aggressive push in opposition to fuel-powered automobiles.
2. Labor disputes
Musk’s lack of sympathy for labor unions has made him some enemies within the Legislature. (Final month, he challenged United Auto Workers to hold a vote at his Bay Space manufacturing unit.)
In 2017, lawmakers tied California’s regulatory credit to the state’s evolving labor observe requirements in a price range invoice broadly seen as concentrating on Tesla. The laws required California’s labor secretary to “first certify producers as honest and accountable within the remedy of their staff earlier than their automobiles are included in any rebate program funded with state funds.”
That effort fizzled. The state by no means adopted the related rules to implement that measure, in keeping with California’s Air Assets Board, nor did it set any customary to certify Tesla’s or some other EV maker’s labor practices as honest. Officers began writing guidelines within the 2017-2018 fiscal 12 months, however they stopped when the Legislature didn’t prolong that powerful discuss within the subsequent price range invoice.
3. Covid orders
California’s strict lockdowns rankled Musk, as they did many enterprise house owners. However in contrast to many companies up and down the state, Musk overtly defied the orders.
Even because the Newsom administration stored faculties, eating places and playgrounds shuttered, the highest brass did nothing when Musk flouted his county’s public well being orders and reopened his Fremont manufacturing unit in Could 2020 — insulting his native well being officer alongside the way in which.
And he dared state officers to attempt to cease him. “I might be on the road with everybody else,” he wrote on the time. “If anybody is arrested, I ask that it solely be me.”
4. Auto insurance coverage coverage
Tesla has rolled out an auto insurance coverage enterprise in seven states, utilizing driver information to cost merchandise — a technique generally known as telematics.
California bans telematics by a 1988 voter-passed poll initiative, and Musk informed buyers early this 12 months that he’s lobbying for a change. That received the eye of state Insurance coverage Commissioner Ricardo Lara, who got here underneath hearth from shopper advocates after a 2019 recording captured him telling insurance coverage executives he was open to revising the prohibition. Lara is up for re-election this 12 months and faces a problem from a fellow Democrat.
“Yesterday @elonmusk reportedly informed buyers he’s ‘pushing very exhausting’ to vary the principles on telematics for California drivers,” Lara tweeted in January. “Push all you need, however we gained’t bend on defending shopper information, privateness and honest charges.”
Musk responded bluntly: “You have to be voted out of workplace.”
The difficulty continues to be a dwell one. The advocacy group Client Watchdog launched a recording of a webcast by Root — a telematics-based insurance coverage firm — saying that Lara is “supportive of what we’re doing.”
A spokesperson for the Division of Insurance coverage reiterated Lara’s pledge in a press release saying the commissioner “won’t bend on defending shopper information, privateness, and honest charges.”
5. Down the pike: social media fights
Sacramento is debating a slate of social media payments geared toward combating alleged misinformation and different abuses on-line that would veer into the kind of censorship Musk has cited as his motive for getting Twitter.
Proposals to droop medical licenses for docs who publish what’s deemed to be Covid misinformation, crack down on “amplification of dangerous content material” and curb alleged cyberbullying face an uphill climb in opposition to business opposition and authorized challenges.
But the groundswell of proposals reveals the place the state’s energy gamers are headed, promising future clashes with Musk’s avowed dedication to unfettered free speech.
Jeremy B. White contributed to this report.
