Cal Tesla

California has a reputation of over regulation but many do not realize how serious this is but Tesla found out. In March 2021, Tesla filed papers to expand their Freemont auto plant by an additional 500,000 units per year adding 4,000 new jobs. They needed permits from six independent authorities, Cal Air Resources, Bay Area Quality Air, Cal Coastal Commission, Dept of Toxic Substance and Reginal Water Board. By Sept 2021 Tesla has spent $80 million dollars on legal fees, environmental consultants and compliance reports and had received zero permits. Tesla then began to negotiate with Texas and was promised expedited permitting, 15-year property tax abatement and $200 million in new infrastructure investment. Then in April 2022 California passed a new law requiring zero carbon by 2030. This meant replacing existing units like power and buying carbon credits and it would cost Tesla $600 million dollars. In order to meet all the new regulations, Tesla estimated it would add $4,000 cost to each car and at a projected 500,000 units per year that is $2 billion in additional cost. In June 2023 Tesla closed the Freemont Plant and moved to Texas. This caused a ripple effect and all of Tesla’s suppliers cancelled expansions that resulted in the loss of 15,000 jobs in California.