“We don’t have a crystal ball,” Hector De La Torre, an Air Resources Board member, told me. “We don’t know what will take off. Fuel cells, electric, and anything else, as long as it is zero or pretty close it. That’s always been our mantra.”
The issue confronting the state is not what’s good for Tesla, or any other manufacturer, but rather how to persuade consumers that zero-emission vehicles make sense. After reaching 3.2 percent of the roughly 2 million new cars sold in California in 2014, the percentage has fallen to 3 percent. With pump prices low, gasoline sales are rising.
Musk has built a sleek car. But Tesla hasn’t turned a profit yet. Subsidy will remain important to his company’s future. That helps explain why he is building the massive battery factory in Nevada. Gov. Brian Sandoval provided $1.25 billion in subsidies, far more than California was willing to offer.