Dan Morain

Mouse roars at Tesla rebate

Elon Musk’s company has a factory in Fremont, but the Tesla Motors CEO waved goodbye to the Golden State last year when he selected Nevada for a massive, $5 billion battery factory.
Elon Musk’s company has a factory in Fremont, but the Tesla Motors CEO waved goodbye to the Golden State last year when he selected Nevada for a massive, $5 billion battery factory. Associated Press file

Sen. Ted Gaines is a quiet guy, unassuming, even a little bit mousy. But for one notable exception, Gaines doesn’t speechify or throw elbows, not like most politicians around this place.

That’s why his Senate Bill 40 is unexpected. Ever so quietly, without even a news conference, the Republican has taken aim at no less a figure than Elon Musk, the new-age car magnate, rocket ship builder and solar energy mogul. If Gaines didn’t have such a reserved reputation, some might wonder whether it’s in a mouse’s nature to retaliate.

An insurance agent by trade, Gaines entered the high-stakes game last year to persuade Tesla Motors founder Musk to locate his $5 billion “Gigafactory” and its 6,500 jobs in the Central Valley, preferably in Gaines’ suburban Sacramento district. Uncharacteristically, Gaines pulled a few stunts – lame ones, to be sure.

He went to a Home Depot, bought a shovel, painted it gold and delivered it to Tesla’s Silicon Valley headquarters, just in case the billionaire Musk needed groundbreaking equipment. He got as far as the receptionist.

Gaines traveled to Texas, which was competing for the factory, and showed up outside the Capitol in Austin with a cardboard cutout of a Tesla, to drive home the point that, by law, there are no Tesla showrooms in Texas. Corny, yes. But again, political theater isn’t Gaines’ core thing.

Musk toyed with Texas, California, Arizona and New Mexico, before bestowing the prize on Nevada, after that state’s governor, Brian Sandoval, promised him $1.3 billion in tax breaks, plus free land not far from the Mustang Ranch.

Gaines accepted the decision with quiet grace and resignation. Now, six months later, comes his bill.

As part of its one-state war on global warming, California grants rebates of $2,500 to purchasers of electric vehicles, no matter how wealthy they are, or how much the cars cost. That amounts to a taxpayer subsidy to Tesla Motors, which routinely sells its cars for upward of $100,000, of no less than $34 million so far to 13,600 customers.

Gaines’ notion is simple: California should limit tax-funded rebates to cars that cost no more than $40,000. He said, without showing a single fang, that he is not carrying the bill out of spite.

“I would much rather help people who are middle class,” said Gaines, who drives a Subaru with a sticker price of $26,000. “A $40,000 car is still expensive.”

Gaines’ bill embodies the sort of populist idea that Democrats ought to embrace, and a few might.

“It makes a lot of sense,” said Assemblyman Henry T. Perea, D-Fresno, who has proposed a bill that would grant rebates for used electric vehicles. “If we’re going to make climate change relevant to the working poor, you have to make it affordable.”

Senate President Pro Tem Kevin de Léon, D-Los Angeles, aware that rich people partake in California’s many environmental programs, has pushed legislation that seeks to spread state aid for going green to working stiffs.

The California Air Resources Board, trying to figure out how to implement that concept, is contemplating direct financial assistance, paying people to junk high-polluting vehicles and making greater use of ride sharing, including farmworker van pools, according to a Senate Transportation Committee report from last week.

If Tesla decides to fight Gaines’ bill – its spokesman didn’t respond to me – it almost surely will die. The staff at the air board last year proposed restricting rebates to cars costing $60,000 or less. Tesla opposed it; it stalled.

Musk has the sway that comes with owning a car factory in Fremont, and the clout that comes with hiring Platinum Advisors and California Strategies, the sixth and 10th largest-billing lobbying firms in town during the 2013-14 legislative session.

If anything, the state will expand spending on rebates for electric vehicles this year. Gov. Jerry Brown is calling for a 50 percent reduction in gasoline use by 2030, and de Léon has introduced legislation to that effect.

To attain that goal, we’d need to reduce gasoline consumption to levels from the mid-1960s, when there were 18 million Californians, not almost 40 million of us. To do that, we’re going to need to buy many more electric vehicles.

In the first 10 months of 2014, Californians bought 24,007 electric vehicles, such as Teslas and Leafs, and 24,710 plug-in electric vehicles, such as Volts. That represents 3.25 percent of the 1.5 million vehicles sold in the state between January and October 2014.

California’s electric and plug-in electric sales represented half of all such cars sold in the nation. That might be cause for Californians to feel virtuous. But it’s not as if gas guzzlers are disappearing. They’re being sold in the Lone Star State. Texans bought 312,500 pickup trucks in the first 11 months of last year, compared to 140,000 sold in California, and roughly 3,100 electric vehicles and plug-in hybrids.

Musk does envision selling lower-priced cars, maybe even for under $40,000. That’s the point of the factory it is building in Nevada. But there’s the rub. It’s in Nevada, not California.

“We tried to do everything to land the jobs. The middle class is hurting,” Gaines said. But Gaines is over it. Really, he says. Though when any of us are jilted, is it really in our nature to go out like a mouse?

Follow Dan Morain on Twitter @danielmorain.

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