A California state bill to give $3 billion in state subsidies to electric vehicle manufacturers is seeing an intense fight in the Senate. The bill, a potential boon for car manufacturers like Tesla Motors, is being criticized by opponents for giving taxpayer money to industries that serve to enrich billionaire CEOs.
A former hedge fund manager and billionaire activist, who now back various anti-poverty and clean energy projects, Tom Steyer strongly supports the bill, which would expand California’s current subsidy program for “green cars.” However, Steyer is on record declaring that “not one penny” in tax cuts should be given to “those who don’t need it.”
“Cutting taxes for wealthy does not trickle down,” he tweeted Aug. 14. “We should give #NotOnePenny in tax cuts for those who don’t need it.”
Steyer’s announcement on Twitter clearly contradicts his backing for bull that is aimed at increasing electric vehicle (EV) sales in California. According to critics, the bill’s greatest benefits go to electric vehicle manufacturers, with lesser tax breaks for hybrids. Reportedly, the measure would help cash-strapped Tesla at a critical stage.
Tesla Motors is owned by billionaire Elon Musk, whose various businesses have taken advantage of nearly $5 billion in subsidies at both the state and local levels. However, he company’s balance sheets continues to hemorrhage money, as Tesla car sales are flatling nationwide.
The Tesla bailout bill has already passed the state Assembly, and there will be a hearing after the state legislature returns from its August recess. Following the hearing, the Senate will take up the proposed legislation.
Conservative lawmakers including GOP state Sen. Andy Vidak of Fresno oppose the bill, saying it would only benefit Tesla and its owner Elon Musk, who happens to be a billionaire already. Vidak also believes that Tesla doesn’t need subsidies because Tesla buyers are wealthy patrons, and the bill would be of no use to others since hybrid and hydrogen vehicles will receive much lesser rebates.
“The Tesla subsidy bill that Mr. Steyer is sponsoring is literally a gift of tax funds to the billionaires who own electric car companies and the millionaires that buy these specialty cars,” Vidak said.
For Steyer, Vidak suggested the nickname “Mr. Pretzel” since he tries to “bend his way out of this hypocrisy.”
A spokesperson for Steyer’s green lobbying group, NestGen, took aim at Vidak and other opponents of the bill, saying that green-energy projects create jobs and are beneficial for the environment and are unlike Republican supported tax cuts which only benefit the elite and their corporations.
“Clean energy benefits millions of Californians by creating jobs and keeping our air and water free of harmful pollution,” the spokesperson said. “We urge Mr. Vidak to drop the silly political posturing and do what’s right for California: Support the clean energy economy and oppose the massive tax cuts for the rich that the Republican Party will soon try to ram through Congress.”
Other critics of the whole electric vehicle industry believe that advocates of the bill aren’t revealing the true story.
According to Tom Tanton, director at the Energy and Environment Legal Institute, subsidies for even the more moderate costing Tesla Model 3 takes taxpayer money from the less fortunate and gives it to high income individuals.
He further pointed out an overlooked human cost incurred in the manufacturing of electric vehicles. The cobalt used to build batteries for EVs is primarily mined in Africa where workers are forced to work in brutal, slave-like, conditions.
“There are tremendous human rights and child abuses in mining, especially in Africa,” Tanton said.
Both Tanton and Vidak also noted that California’s poverty rate is the highest in the country when considering the cost-of-living even though the economic and job growth there has outperformed almost all other states.