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Dan Morain: Brown's big battle for Tesla

FresnoJune 16, 2014 

One governor swaggers, speaks with a twang and has a head of thick dark hair. The other governor has long since gone bald, except for his eyebrows, and drops Latin phrases into conversations.

Game on.

Rick Perry, dressed in casual-cool black garb and dark glasses, glided a sleek gray Tesla S into the Grand Hyatt's parking lot last week and touted his effort to persuade Elon Musk to build his highly coveted $5 billion battery factory in Texas.

California, the Texan told reporters, has been "losing its luster" for the past 10 years, because of "over-taxation, over-regulation and over-litigation." So the billionaire founder of California-based Tesla Motors would want to locate his "gigafactory" and its 6,500 jobs in the Lone Star state.

Mike Rossi, Gov. Jerry Brown's job adviser and the official most responsible for convincing Musk that California is ideal for Tesla's battery factory, was not impressed with Perry's latest stunt. "It's interesting he had to come to California to drive a Tesla because he can't drive one in Texas," Rossi said, throwing an elbow.

He was making a none-too-subtle reference to an archaic Texas statute that bars upstart car companies such as Tesla from selling their wares in Texas. Musk had gone to Austin last year to urge legislators to repeal the law. Musk, a man not used to losing, got creamed.

New car dealers are in the districts of every Texas legislator, and have given millions of dollars over the years in campaign donations. Perry collected more than $250,000 from car dealers in 2011 and 2012, Texans for Public Justice reports.

The Austin advocacy group offered this description of Texas' protectionist law: "Employees in Tesla car galleries in Austin and Houston are legally prohibited from offering visitors a test drive, quoting them a price or even directing them to Tesla's website. If a Texan does order a Tesla from California, the car must be delivered by third-party trucks that cannot advertise the Tesla brand."

Evidently, protections for car dealer-campaign donors don't rise to what Perry calls "overregulation."

As Perry played to the cameras at the Hyatt, Brown's aides across L Street in the Capitol were inserting a multimillion-dollar property tax exemption into the new state budget for solar arrays, to the dismay of lobbyists for California counties and the delight of the solar industry.

One beneficiary would be SolarCity, the nation's largest solar company. Musk is chairman of the SolarCity board. The company generally owns solar panels it installs on rooftops of homes and businesses, and so would receive property tax breaks.

SolarCity presumably would rely on batteries that will be produced in the new battery factory.

Brown's aides also salted the budget, with language extending another alternative energy subsidy, the Self Generation Incentive Program. The California Public Utilities Commission, which administers the program, reports Tesla has $43 million worth of pending applications.

"Everything that can be done is done," Rossi, the head of Brown's Go-Biz operation, told me. "I'm feeling very good about it. I think the issues that can be addressed are being addressed."

The competition for the battery factory became public in February, when California was not considered a finalist.

Tesla spokesman Simon Sproule said the biggest issue remains whether the factory can be built quickly, so that batteries will be available for the next generation of lower-priced Teslas, a prototype of which is supposed to be introduced in 2015.

"California ... has transitioned from improbable to being in a situation where California is putting itself into play," Sproule said. "In the end, California has closed the gap."

Perry swaggered into California, saw a Tesla and seems to think he conquered it. Brown, however, sees it a little differently. As he might say: veni, vidi, but not vici quite so fast.


Dan Morain writes for The Sacramento Bee. Follow him on Twitter @danielmorain.

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