1/ An Open Letter to Governor Greg Abbott (@GovAbbott), of the Great State of Texas. $TSLA
2/ Dear Governor Abbott:
I write to you as a former Texas resident and, for 40 years, a fellow Texas lawyer.
I write to you as a former Texas resident and, for 40 years, a fellow Texas lawyer.
3/ Tesla's CEO, Elon Musk, has for some time been implicitly or explicitly threatening California with his vacation of the premises in favor of Texas. Here’s the latest today: 
4/ How to handle COV-19 is a difficult problem. Let it be remembered, though, that Elon Musk from the start has been outrageously irresponsible on this issue. It started with this:
6/ I’m writing to warn you not to be seduced by Tesla's promises of Texas jobs, and to urge you to educate yourself about how California, New York State, & Nevada have all been taken advantage of by Musk & Tesla.
7/ If Tesla truly would bring jobs to Texas, then I understand the appeal. But, I beg you, consider Tesla's history, consider the dangers, & consider how to protect your State and its taxpayers if you strike a deal.
8/ There are some crucial lessons you could take from those three other states that have showered subsidies & inducements on Tesla in hopes of more jobs. And, more importantly, some crucial lessons from China, whose ruling party has enormous influence over Musk & Tesla.
9/ Let’s start with California. It has given Tesla hundreds of millions in tax abatements and by means of a ZEV credit regime (which, by the way, is a hidden tax against the buyers of GM SUVs made in Arlington)… $GM
10/ … also, California has indirectly subsidized Tesla by offering income tax rebates & HOV privileges to Tesla buyers. California has also used taxpayer funds to construct a charging network that is a great benefit to Tesla.
11/ And, in return? A Twitter tantrum from Elon Musk. Who says he’s packing up his toys and leaving. But, trust me, Governor Abbott. This isn’t about California. It’s about China. More about that in a bit.
12/ Now to New York State. It was seduced by Tesla’s subsidiary, SolarCity, into spending almost $1 billion on a new factory and equipment in Buffalo. In exchange, Tesla promised 1,460 high tech jobs at the factory, and thousands more in the region and throughout the state.
13/ New York State spent all its money up front. It has gotten nothing in return. You can read about that here:
vanityfair.com/news/2019/08/h…
vanityfair.com/news/2019/08/h…
15/ New York State's mistakes: 1) Governor staking his reputation on the project; 2) Delivering all subsidies up front; 3) inadequate remedies for Tesla’s failure; 4) quiet amendments to water down Tesla obligations; (5) reluctance to enforce agreement because of embarrassment.
16/ Then, there is the example of Nevada, which lavished $1.3 billion of subsidies on Tesla based on the promise that this “largest factory on earth” would lead the galaxy in cell technology & usher in a new era of lower priced Electric Vehicles.
17/ Reality: the Nevada factory is only one-third the size promised. Tesla and its cell supplier, Panasonic, are now on the outs. And Tesla is sourcing increasing numbers of cells from Chinese manufacturers.
18/ Among Nevada’s mistakes: 1) relying on an “expert consultant” analysis of future economic impacts; 2) tangling up in the process a politically connected landowner (and brothel owner), who had his own interests in mind…
19/ Then, there is the problem of China. Tesla has made a deal with the devil. It and its CEO are now utterly beholden to the Communist Chinese Party. The agreements made by Tesla in October of 2018 assure that Tesla's center of gravity is shifting to Shanghai.
22/ Most importantly, Read the Grant Contract.
Then read the China loan agreements. The crucial parts are those that govern use of loan proceeds and the restrictions on funds in the Revenue Accounts.
Then read the China loan agreements. The crucial parts are those that govern use of loan proceeds and the restrictions on funds in the Revenue Accounts.
23/ Also, who is Elon Musk? How well do you think you know him?
Not his reputation. Not what he says. But what he does.
Here is who he is:
Not his reputation. Not what he says. But what he does.
Here is who he is:
24/ A final thought. Tesla hates auto dealerships. Consequently, Tesla owners suffer from hideously bad service at Tesla-owned Service Centers. Don't let Tesla do that to your fellow Texans.
This is easy to research. Start with the pinned tweets here:
twitter.com/ghost_scot
This is easy to research. Start with the pinned tweets here:
twitter.com/ghost_scot
25/ Governor Abbott, if Texas truly wants to do a deal with Tesla, I hereby offer my pro bono consulting services to help your state structure a deal that avoids all the pitfalls experienced by California, New York, & Nevada. I’m easy to contact.
