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Comment by omarforgotpwd | Hacker News Reader

The 200,000 unit cap was part of federal legislation, not state legislation. That was repealed as part of the Inflation Reduction Act under the Biden administration, and replaced with a new system where you qualify for the credit based on the sourcing of your battery materials and other factors.

Here, Newsom is proposing an entirely new incentive that he has designed specifically to exclude Tesla.

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The IRA was able to extend the subsidies for Tesla because it had the considerable resources of the Fedetal government behind it. A state is going to have fewer resources, and so it makes sense to go back to the original and less-generous regime. More practically, Tesla has already received a lot of subsidies and now has large sales and economies of scale, so it’s not very practical for California to allocate limited resources to Tesla rather than companies that haven’t yet reached scalable production.

Of course the very best thing here would be for the Federal government to maintain the subsidies of the IRA, and then California wouldn’t have to step in with its more limited capabilities in the first place. If that’s important to Tesla, I’m sure they have someone who can talk to the incoming administration about it.

It makes no sense to subsidize only the players who have low market share. Tesla is the only carmaker that still makes cars in California, why subsidize foreign cars at the expense of California workers… using their own tax dollars?

The only justification for such harmful economic policy is political retaliation against Musk. But it is not the role of the government to use taxpayer funds for political retribution against opponents.

Why? It fosters competition and considering Tesla was heavily subsidized during its early years, it makes sense its competitors should have similar shots

Subsidies should not be used to decide winners and losers. There should be an equal playing field for all companies. When the government starts deciding winners instead of the market, things start falling apart fast.

It makes sense for the same reason that Musk reportedly endorsing Trump's plan to kill federal EV subsidies makes sense.

Tesla is profitable enough that Musk believes that Tesla will do fine without subsidies. Not so for most other EV makers--they are still at the stage where they are figuring it out and not yet reaping economies of scale. Musk believes that removal of subsidies will greatly hurt them.

If a state wants to encourage a healthy multi-company competitive EV market it makes sense to design the state subsidy program so that the benefits go toward making that happen which in the case of the current EV market means not subsidizing any company whose EV market share is about the same as that of everyone else combined.

I'm not sure why you're bring downvoted, since Musk is on the record saying exactly this.

https://www.businessinsider.com/why-tesla-elon-musk-supports...

Whether he actually believes this or is just claiming to believe this to placate Trump is another question.

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