Business
California reserved $165 million for Tesla to electrify its trucking industry. The result may stifle EV innovation
A California clean-air program, designed to rapidly electrify the state’s truck and bus fleets, has recently faced intense criticism for reserving its largest-ever tranche of funding to subsidize Tesla’s all-electric semi-truck, a largely unproven vehicle with a dubious production timeline.
In the past year, the California Air Resources Board (CARB) and its nonprofit partner CALSTART have set aside nearly 1,000 vouchers, worth at least $165 million, to provide commercial fleets with steep markdowns on the long-delayed Tesla Semi, according to state data obtained by The Times. The battery-powered big rig has been advertised as a groundbreaking freight truck capable of traveling up to 500 miles on a single charge.
But the news of Tesla’s windfall outraged some in the trucking industry, who allege the state provided the world’s wealthiest automaker with preferential treatment for a vehicle that is not ready.
Nearly eight years since Tesla Chief Executive Elon Musk unveiled the Tesla Semi as a concept, it still isn’t widely available in stock. It has repeatedly faced production delays and still doesn’t have a publicly advertised retail price.
In fact, some critics argue the Tesla Semi shouldn’t have qualified for government funding at all. At the time Tesla submitted its voucher requests, the vehicle didn’t appear to have the necessary certifications and approvals to be sold and legally driven on California roads.
Still, the 992 state-administered incentives have effectively established the Tesla Semi as the front-runner in the electrified heavy-duty truck class.
“I don’t think it would be an overstatement to say this is market distortion or market manipulation,” said Alexander Voets, general manager at RIZON Truck USA, a commercial electric truck brand. “CARB essentially single-handedly just made Tesla the market leader for electric vehicles for [heavy-duty trucks] without them having [virtually] any vehicles in customer hands.”
Historic funding, murky data
The funding was tentatively awarded through the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP), a state program aimed at reducing pollution and greenhouse gas emissions in the goods-movement sector and in public transit. Since its creation in 2009, the program has dedicated over $1.6 billion — a mix of state funding and incentives from local ports — toward helping fleets purchase electric, hydrogen and other low-emission vehicles.
The state program aims to solve an outsize problem: Heavy-duty trucks make up only 10% of vehicles on U.S. roads, but they produce 45% of smog-forming nitrogen oxides and 58% of lung-aggravating soot.
But experts say that the state program has lacked thorough oversight and accountability, allowing a small group of manufacturers to exploit the program’s robust endowments.
Since The Times began raising questions about Tesla’s vouchers, the state’s public data for the HVIP have drastically changed, reflecting lower funding amounts for Tesla and other major automakers. State officials had reserved the maximum amount for which the vehicle qualified — a number much higher than the retail price. In late January, officials revised the publicly accessible data so that the numbers no longer included local port funding that was awarded through the program — making it appear that Tesla received tens of millions less in funding.
CARB officials also noted that EV incentives from local utilities — not administered through the state voucher program — helped subsidize the Tesla Semi orders and ultimately lessen grant funding awarded by the state.
An analysis of earlier data by The Times showed that Tesla may have been poised to receive up to $202 million, roughly a third of all funding allocated during 2025 and 2026. The Tesla vouchers had each been worth from $120,000 to $430,000 but now are listed between $84,000 and $351,000.
Even after the revisions, Tesla is still poised to receive about $165 million, significantly more than any other single auto manufacturer. New Flyer, a Canadian bus manufacturer, secured the HVIP program’s second-highest funding, about $68 million, less than half that of Tesla.
Though its retail price has still not been publicly disclosed, state documents obtained by The Times show that the Tesla Semi generally sells for around $260,000 for the standard model with 300-mile range and $300,000 for the long-range model with 500-mile range.
The price has been one of the greatest selling points, as the average cost of a zero-emission big rig was $435,000 in 2024, according to CARB.
The state voucher program offers up to a 90% discount on the list price for private fleet operators.
Tesla’s questionable qualifications
To qualify for a voucher, manufacturers must obtain a zero-emission powertrain certification showing the vehicle meets certain performance standards. Each model year of the vehicle also needs to receive written approval from CARB, and the vehicle must be listed in the HVIP catalog.
The 2024 Tesla Semi was listed as an eligible vehicle by CARB, despite not having powertrain certification registered on CARB’s website. No subsequent model years were displayed as eligible before Tesla applied for government incentives.
“I still haven’t seen any proof that Tesla has been able to satisfy the requirements,” said a senior official at another EV manufacturer, who feared reprisal from state officials if they spoke out publicly.
“That is really concerning to me, because these are rules that I have to follow. So, how are they getting around this? And how has CARB not caught this?”
Tesla did not respond to multiple requests for comment. CARB officials did not directly answer how Tesla secured state funding.
“The process for vehicle or engine certification includes the review and processing of confidential business information, thus the certification status of any truck is confidential,” a spokesperson said in a statement to The Times.
However, CARB insisted that Tesla would not receive any state-administered funding until requirements are met and vehicles are delivered to customers.
A WattEv Transport Inc. Tesla Semi electric truck sits parked next to BYD electric trucks by a charging station at the Port of Long Beach in April.
(Patrick T Fallon / AFP via Getty Images)
That provides little consolation to other manufacturers.
Even if Tesla fails to deliver the trucks and doesn’t eventually receive government incentives, it prevents other automakers — with EVs in stock — from utilizing the funding more immediately. Losing out on these funding opportunities could be critical for some smaller EV companies.
“That hurts the rest of us,” said Peter Tawil, director of sales and marking at RIZON and longtime promoter for the EV industry. “Our trucks can be delivered tomorrow.”
“If this doesn’t get corrected, our whole industry will just go down the toilet.”
A lifeline for EV makers
Tesla’s funding surge came two years after state officials quietly eliminated the limit of vouchers a single manufacturer can secure at one time, a key guardrail intended to prevent major automakers from hoarding California’s clean-transportation funding and stalling the deployment of electric vehicles.
Typically, auto dealerships secure purchase orders from private or public fleet operators interested in buying their zero-emission vehicles at the lower rates facilitated by the state incentives. Then, the dealerships submit voucher requests — for up to 20 vehicles at a time for most businesses — to obtain those incentives.
The state vouchers are awarded on a first-come, first-served basis, creating stiff competition for funding. During the funding cycle that began on Sept. 9, for example, there was about $335.6 million available. Within two days, 68% of that amount had already been allotted.
The program’s structure has enabled some companies to quickly capture a large portion of funding, over 1,000 vouchers in some cases, without having the inventory or production capacity to deliver those vehicles in a timely fashion. It also left their competitors unable to provide similar discounts.
For years, a single manufacturer generally was allowed to secure a maximum of only 100 state vouchers at a time, until it delivered those orders to customers. That rule was designed to prevent any entity from monopolizing state funds for vehicles that weren’t ready for production and to provide a level playing field for smaller manufacturers.
A CARB spokesperson acknowledged that the state program ended the 100-voucher limit because the policy unintentionally prevented customers from buying some of the most popular trucks and buses on the market. The state had also regularly granted waivers for customers to bypass the voucher limit for popular vehicle brands.
“The original intent of the manufacturer cap was to ensure [manufacturers] were not holding vouchers for an extended time,” a CARB spokesperson said. “Instead, it had the unintended consequence of limiting zero-emission vehicle choices for fleets.”
But, without those limits, large manufacturers, including Tesla, have been able to dominate the voucher program. The policy change has intensified competition in the state voucher program at a time when the EV market has entered its most uncertain period in recent memory.
The Trump administration has eliminated federal tax credits for EVs and invalidated California’s zero-emission vehicle targets. As a result, California is losing traction in its quest to eliminate pollution and greenhouse gases from the state’s robust shipping sector.
The medium- and heavy-duty segment, in particular, had already greatly consolidated as automakers have struggled to electrify — and monetize — delivery vans, buses and big rigs in the U.S.
California’s voucher program had provided electric truck and bus manufacturers with a lifeline. But Tesla’s expansion into the heavy-duty market has become a flash point, triggering calls for reforms to how incentives are distributed.
Paragon or prototype?
Ironically, Tesla CEO and former DOGE chief Elon Musk had publicly advocated against government incentives for EVs, boasting that eliminating these subsidies would bolster Tesla’s standing in the industry.
Meanwhile, Tesla has worked to secure millions in state and local funding for its Semi, while many in the trucking industry question whether the vehicle’s uneven development timeline justifies such heavy public investment.
In November 2017, Musk unveiled the Tesla Semi prototype at a SpaceX facility in Hawthorne. He touted it as a revolutionary all-electric truck that would help phase out diesel-powered models and reduce emissions from the nation’s shipping industry. Musk said it would deliver 500-mile range at maximum, a 0–60 mph acceleration in 20 seconds and 30-minute charging via solar-powered “Megachargers.”
Production was initially scheduled to begin in 2019 in Tesla’s Gigafactory in Nevada.
But, since then, early customers, such as food and beverage giant PepsiCo, have waited years for their orders to be fulfilled amid a series of manufacturing delays.
It’s unclear how many Tesla Semi models have been sold. According to state data, Tesla has received payment from CARB’s voucher program for only five Semi models thus far, all of which were delivered last July to Nevoya Transportation LLC.
State officials said they expect many of the Tesla orders will be fulfilled in late 2026, based on conversations they’ve had with Tesla representatives.
But there are still serious questions about its performance and design.
As the Tesla Semi was tested at the Port of Long Beach last year, a major design flaw became apparent. The big rig has a panoramic, wraparound windshield providing exceptional visibility and a futuristic appearance.
But it was clear that drivers were unable to roll down the window to present the necessary paperwork at the gated entry.
For skeptics, it was yet another sign the truck is still not ready for the road.
Business
Commentary: How right-wing anti-transgender attacks led to a Supreme Court ruling upholding sex discrimination
At the Supreme Court, the unfounded fear of boys masquerading as girls in youth sports rolled the clock back on gender equality.
On the surface, the Supreme Court’s June 30 opinion upholding state laws barring transgender girls from women’s and girl’s sports teams looks like a victory for women’s rights.
The 6-3 opinion by Justice Brett M. Kavanaugh certainly presents itself that way. “Females and males have inherent physical differences relevant to athletic performance,” Kavanaugh wrote. “Therefore, in contact sports, forcing female athletes to compete against males can create significant safety risks.” He also asserted that “forcing female athletes to compete against males can undermine competitive fairness.”
The ruling applied to prohibitions enacted in Idaho and West Virginia against “biological” males’ participation on women’s teams in public schools. Federal judges in both states overturned the bans. The Supreme Court majority restored them. The ruling essentially upholds similar bans enacted in 25 other states.
There was no record of any transgender person participating in school sports in the State, let alone any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.
— Justice Sonia Sotomayor, demolishing the Supreme Court’s argument in favor of banning transgender girls from girl’s sports
Kavanaugh, like Donald Trump and others in the anti-transgender camp, maintained that one’s gender is an immutable fact of life, established even before birth.
Anything else, Trump stated in an executive order he issued on inauguration day 2025, could only be the product of “gender ideology extremism.” The U.S., his order stated, recognizes “two sexes, male and female. These sexes are not changeable and are grounded in fundamental and incontrovertible reality.” That’s a “biological truth,” he declared.
In his own version of this overconfident and factually insupportable conclusion, Kavanaugh wrote: “As all agree, females and males have inherent physical differences relevant to athletic performance.”
Science recognizes that some people are “born with sex traits that don’t fit into typical male or female patterns,” to cite a discussion on the Cleveland Clinic web page on the topic “intersex.” The condition “may involve chromosomes, hormones, reproductive organs or genitals.”
From a psychological standpoint, medical science recognizes “gender dysphoria” as a real condition often requiring counseling and medical intervention such as the use of puberty blockers and hormones to stave off the development of secondary sex characteristics until the condition can be resolved.
No one disputes that there are physical differences between the sexes. Few would dispute that on average or even at the median, males may be bigger and more powerful than females, or that in certain contact sports the difference may be telling and on occasion dangerous.
But that’s not the same as asserting that the physical differences between males and females invariably mean that men will invariably prevail over women in all competitions or that their participation will endanger women.
The International Olympic Committee — in a policy statement Kavanaugh cited incompletely — says that in “most running and swimming events,” males have a 10% to 12% advantage over women. That’s a range that would accommodate the full spectrum of outcomes — transgender females win, cisfemales win, they tie. (The “cis” prefix denotes those living consistent with their birth gender.)
West Virginia and Idaho addressed this ambiguity by banning transgender women from all girls’ teams. So under their rules transgender girls can’t play football or soccer with cisgirls. But what’s the argument in favor of banning them from the 100-yard dash, or cross-country track, or diving, or archery?
But something else is going on here. The Supreme Court’s ruling was almost preordained, given the years-long campaign by conservatives to demonize transgender individuals as if they’re members of an alien species.
It will be recalled that during his presidential campaign, Trump spun a despicable fantasy in which children were kidnapped in school and secretly subjected to sex-change operations.
Trump’s executive order wiped out policies aimed at protecting transgender adults from discrimination. He moved to outlaw gender-affirming medical therapies for anyone under 19 by cutting off federal funding for healthcare institutions that provide such care.
He banned transgender individuals from serving in the military and ordered federal prison officials to move transgender inmates into the general populations consistent with their birth genders, which exposes them to physical assault. (Federal Judge Royce Lamberth of Washington, D.C., has blocked the government from transferring three transgender women into the male prison population or terminating their hormone treatments.)
I wrote during Trump’s first term, when his anti-transgender policies were still gestating, that the goal was to show that “one can target any community, as long as it doesn’t have a strong political voice or political power. These are the actions of bullies and cowards, pretending to be strong.”
Last year, the Supreme Court struck its first blow against transgender rights by upholding a Tennessee law banning transgender care, including puberty blockers and hormone therapy, for minors. Similar laws have been enacted in 25 other states. The majority in that ruling by Chief Justice John G. Roberts Jr. was identical to the one in the June 30 ruling — Roberts, Kavanaugh, and Justices Clarence Thomas, Samuel A. Alito Jr., Neil M. Gorsuch and Amy Coney Barrett.
Who are the targets of this ideological campaign? They number only about 1.6 million U.S. adults, or one-half of 1% of the U.S. population. About 300,000 adolescents ages 13 to 17, or 1.4%, identify as transgender, according to a study by UCLA School of Law.
In West Virginia, as Justice Sonia Sotomayor observed in her dissenting opinion, “there was no record of any transgender person participating in school sports in the State, let along any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.”
In endorsing the flat bans directed at transgender women in Idaho and West Virginia, Kavanaugh argued that any attempt to implement case-by-case judgments of students’ requests to join sports teams inconsistent with their biological gender would create “an enormous practical and administrability problem.”
Is that so? That wasn’t the case in Maine, where the annual K-12 population is more than 170,000. There, a committee was charged with determining whether a student’s participation in a sport consistent with their gender identity but inconsistent with their biological sex would “result in an unfair athletic advantage” or present a risk of injury to others. The committee held 56 hearings from 2013 through 2021, or an average of seven per year. During the entire time span, only four involved transgender girls. (The outcome of those hearings couldn’t be learned.)
It was Maine’s policy, one might recall, that provoked a confrontation between Trump and Maine Gov. Janet Mills at the White House last year, when Trump threatened to withhold federal funding from the state unless it barred transgender students from competing on women’s sports teams. “We’ll see you in court,” Mills snapped.
Whether the Idaho and West Virginia laws genuinely protect girls from unfair competition is questionable. (The Idaho law is styled the “Fairness in Women’s Sports Act.”) In practice, the laws may subject women in public schools to “invasive sex verification procedures,” as educational expert George Theoharis of Syracuse University wrote after the court ruling.
They’re also based on a retrograde view of women as fragile creatures needing men’s protection, Theoharis wrote — “the same logic that has historically been used to justify excluding women from making their own healthcare decisions and girls from rigorous math and science; that physically demanding work is simply beyond them.” (There don’t appear to be any state laws barring transgender women from competing in men’s sports.)
Becky Pepper-Jackson, the plaintiff in the West Virginia case, in which she is identified only as B.P.J., is the only transgender girl who sought to join girl’s teams — track and cross-country — in the state. That was in 2021, just after West Virginia passed its law and she was about to enter sixth grade. She didn’t appear to pose any competitive risk to others on the track and cross-country teams she applied to join — her lawyers told the Supreme Court that on those no-cut teams, she “came in near the back.”
Anyway, she had not gone through male puberty, which theoretically might have endowed her with a competitive advantage, because she had been taking puberty blockers and female hormones.
Thanks to the court’s ruling, Sotomayor observed in a dissent joined by Justices Elena Kagan and Ketanji Brown Jackson, West Virginia can deny Becky access to school sports “because it thinks they have an inherent athletic advantage, even if the facts show that they do not.”
B.P.J., Sotomayor wrote, “cannot practice on girls’ teams, even if she would not take anyone’s spot in an eventual competition, even if everyone who tries out for the team makes it, and even if having the chance to participate could aid immensely in treating B. P. J.’s gender dysphoria.”
So whose interest was really protected by the Supreme Court?
Business
Orange County real estate investor pleads not guilty in $100 million bank fraud case
An Orange County real estate investor accused of criminally defrauding an Arizona bank of nearly $100 million pleaded not guilty Monday and remains in custody.
Mahender Makhijani, 44, of Corona del Mar — who also was ordered by an arbitrator to pay $1.34 billion in a separate civil fraud case — was arraigned in Santa Ana federal court on two charges.
He is accused of bank fraud and making a false statement to a bank in a June 8 case involving a $100 million real estate loan made by Phoenix-based Western Alliance Bank. He was taken into custody on June 10.
Makhijani is accused of providing bogus collateral for the October 2024 loan now in default. In a civil lawsuit, Western Alliance said the outstanding balance as nearly $99 million.
Prosecutors say he falsified title insurance policies that showed the bank would have a first lien on the underlying collateral if the loan went bad, when in fact it did not.
A trial was set for August 11 before U.S. District Judge David O. Carter in Santa Ana.
Michael Schachter, his criminal defense attorney, did not respond to messages seeking comment.
In the civil case, an arbitrator in May ordered Makhijani to pay Laguna Beach real estate mogul Mohammad Honarkar $1.34 billion after ruling he had fraudulently induced him into a 2021 joint venture — and then wrested control and lost to creditors more than two dozen properties Honarkar had owned.
Makhijani has not been criminally charged in that case, but prosecutors alleged in an affidavit in support of the bank fraud charges that he used “force and threats” in his dealings with Honarkar and others — including taking over the landmark Hotel Laguna in 2023 that Honarkar was renovating.
Prosecutors sought to hold Makhijani without bail after his arrest.
The affidavit noted he is a legal Indian immigrant with a home and bank accounts in that country, has access to private jets and threatened to “run away” if caught in a difficult situation.
The request was denied and he was granted $500,000 bail.
However, Makhijani remains in custody after a hearing sought by prosecutors last month before Magistrate Judge Autumn Spaeth.
The judge declined to accept a $450,000 cashier’s check submitted by a Makhijani associate for the bail, finding insufficient proof the source of the funds was legitimate, according to court records.
Makhijani is not prominent outside Orange County real estate circles, but he established a thriving distressed-assets business over the last decade that attracted prominent Southern California real estate investors.
Prosecutors said it paid for a lifestyle that included two multimillion-dollar homes in Corona del Mar, a luxury apartment in Newport Beach and various luxury vehicles.
As of last month, prosecutors had not fully traced his assets, which they believe are not held in his name and some of which may be in India.
The businessman employed an array of shell companies and strawmen to sign documents on his behalf, and to stand in for him as operators of his companies, according to the affidavit.
Makhijani told an associate he took extra precautions because wanted to insulate himself from litigation and that “they were sharks in the distressed world who took advantage of people,” the affidavit stated.
Business
Many indie festival films struggle to get distribution. Alamo Drafthouse is trying to change that
Dine-in movie theater chain Alamo Drafthouse Cinema is launching a new initiative to show unreleased independent films that had successful festival runs, a move that comes as specialty films have struggled to gain distribution.
The Alamo Exclusives program, announced Wednesday, will give limited theatrical runs to films that showed at festivals including Sundance, the Toronto International Film Festival, Tribeca Festival and South by Southwest festival, as well as Alamo’s own Fantastic Fest.
The idea is to help showcase films that received critical acclaim, but did not secure distribution or acquisition deals. The chain will not acquire these films, but instead will enter into agreements with filmmakers to exhibit their films on Alamo Drafthouse screens. By showing these films to audiences on the big screen, these films could get the momentum they need for further opportunities.
The program’s first film will be the documentary “Butthole Surfers: The Hole Truth and Nothing Butt,” which debuted last year at South by Southwest and chronicles the history of the punk rock band.
The film will be shown in Alamo Drafthouse theaters for a limited time later this summer.
The Austin-based chain, which is owned by Sony Pictures, has a long history of curating indie films for its audiences, giving Alamo Drafthouse confidence that its viewers want to see these kinds of movies, company chief executive Michael Kustermann said in a statement.
“Time and again, they’ve shown they’ll come out to support bold, original films when given the opportunity,” he said. The new Alamo Exclusives “gives us another way to champion filmmaker-driven films that deserve to be discovered and connect them with the wider Alamo Drafthouse audience.”
The initiative comes at a difficult time for indie films. Since the pandemic upended the movie business, traditional studios and distributors have had less appetite for risk, including betting on smaller indie films out of festivals.
And as the 2023 dual writers’ and actors’ strikes thinned out theatrical lineups, that aversion to uncertainty became a push for reliable and profitable hits.
“Too many incredible films premiere at festivals and then never receive the theatrical life they deserve,” Lisa Dreyer, director of Fantastic Fest and film innovation at Alamo, said in a statement. “We are actively searching for films across all genres, from horror to comedy, to everything in-between, to champion in this new, exciting way.”
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