Tesla Death Watch 10: CA Small Biz Owner Pissed at Tax Break

Robert Farago
by Robert Farago

Who knew we'd break Tesla Death Watch double digits in the space of a few minutes? Still, ours is not to question why. Oh wait; it is. So why did California give Tesla Motors a tax break for production of their "Model S" lithium-ion-powered (or part lithium-ion powered) Model S sedan? The churlish amongst you might suggest it has something to do with Tesla customer and California governor Arnold Schwarzenegger's place on the Roadster's waiting list. Small business owners in The Golden State have another perspective. KCBS reports that "Dr. T.J. Rogers, CEO of Cypress and chairman of Sunpower, moved his wafer manufacturing from California to Texas and Minnesota to reduce costs. He said he is outraged that the state would not offer the same type of deal [seven to nine percent off tax on equipment purchases] for small businesses like his. 'I can’t afford to run a plant here [in California] because every time I put in a new piece of equipment and try to upgrade the plant I have to pay an extra six percent on top of what the equipment costs.'" Democratic CA State Treasurer Bill Lockyer gets it. "When does [a tax subsidy] become just a gift for behavior that would have happened anyhow, or does it really bring a business to California or have it really expand?” Of course, this is an entirely theoretical discussion…

Robert Farago
Robert Farago

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  • John Horner John Horner on Jul 05, 2008

    "Wafer boy" isn't going to be surprised by anything in Texas. Cypress' second wafer fab was built in Round Rock (North of Austin) 21 years ago and remains one of the company's main manufacturing facilities to this day.

  • Kevin Kevin on Jul 06, 2008
    for small businesses like his” Cypress Semiconductor is a publicly traded company with a market capitalization of $3.4 billion and annual sales in the $1 billon range. I think they're talking about SunPower Corporation specifically .... which I see is only on track to hit a run rate of a billion in revenue by about now ... OK nevermind that's pretty funny, but c'mon TJ, move everything to Texas!
  • ZoomZoom ZoomZoom on Jul 06, 2008

    I agree with the earlier comment about unequal application of taxes. Subsidies should be considered illegal, if not unconstitutional.

  • RedStapler RedStapler on Jul 07, 2008

    Making PV modules is a relatively energy and capital intensive process. Labor costs are not that much of a factor as their is little to no touch labor involved. California has the most expensive electricity in Contiguous US. I could write a medium sized book about all the policy shortcomings that factor into this, but suffice to say the CA is amongst the LAST places you want to put a manufacturing facility for most things.