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)

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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.

Workers of one of the most powerful unions in California are forming an early front in the battle against artificial intelligence, warning it could take jobs and harm people’s health.

As part of their negotiations with their employer, Kaiser Permanente workers have been pushing back against the giant healthcare provider’s use of AI. They are building demands around the issue and others, using picket lines and hunger strikes to help persuade Kaiser to use the powerful technology responsibly.

Kaiser says AI could save employees from tedious, time-consuming tasks such as taking notes and paperwork. Workers say that could be the first step down a slippery slope that leads to layoffs and damage to patient health.

“They’re sort of painting a map that would reduce their need for human workers and human clinicians,” said Ilana Marcucci-Morris, a licensed clinical social worker and part of the bargaining team for the National Union of Healthcare Workers, which is fighting for more protections against AI

The 42-year-old Oakland-based therapist says she knows technology can be useful but warns that the consequences for patients have been “grave” when AI makes mistakes.

Kaiser says AI can help physicians and employees focus on serving members and patients.

“AI does not replace human assessment and care,” Kaiser spokesperson Candice Lee said in an email. “Artificial intelligence holds significant potential to benefit healthcare by supporting better diagnostics, enhancing patient-clinician relationships, optimizing clinicians’ time, and ensuring fairness in care experiences and health outcomes by addressing individual needs.”

AI fears are shaking up industries across the country.

Medical administrative assistants are among the most exposed to AI, according to a recent study by Brookings and the Centre for the Governance of AI. The assistants do the type of work that AI is getting better at. Meanwhile, they are less likely to have the skills or support needed to transition to new jobs, the study said.

There are millions of other jobs that are among the most vulnerable to AI, such as office clerks, insurance sales agents and translators, according to the research released last month.

In California, labor unions this week urged Gov. Gavin Newsom and lawmakers to pass more legislation to protect workers from AI. The California Federation of Labor Unions has sponsored a package of bills to address AI’s risks, including job loss and surveillance.

The technology “threatens to eviscerate workers’ rights and cause widespread job loss,” the group said in a joint letter with AFL-CIO leaders in different states.

Kaiser Permanente is California’s largest private employer, with close to 19,000 physicians and more than 180,000 employees . It has a major presence in Washington, Colorado, Georgia, Hawaii and other states.

The National Union of Healthcare Workers, which represents Kaiser employees, has been among the earliest to recognize and respond to the encroachment of AI into the workplace. As it has negotiated for better pay and working conditions, the use of AI has also become an important new point of discussion between workers and management.

Kaiser already uses AI software to transcribe conversations and take notes between healthcare workers and patients, but therapists have privacy concerns about recording highly sensitive remarks. The company also uses AI to predict when hospitalized patients might become more ill. It offers mental health apps for enrollees, including at least one with an AI chatbot.

Last year, Kaiser mental health workers held a hunger strike in Los Angeles to demand the healthcare provider improve its mental health services and patient care.

The union ratified a new contract covering 2,400 mental health and addiction medicine employees in Southern California last year, but negotiations continue for Marcucci-Morris and other Northern California mental health workers. They want Kaiser to pledge that AI will be used only to assist, but not replace, workers.

Kaiser said it’s still bargaining with the union.

“We don’t know what the future holds, but our proposal would commit us to bargain if there are changes to working conditions due to any new AI technologies,” Lee said.

Healthcare providers have also faced lawsuits over the use of AI tools to record conversations between doctors and patients. A November lawsuit, filed in San Diego County Superior Court, alleged Sharp HealthCare used an AI note-taking software called Abridge to illegally record doctor-patient conversations without consent.

Sharp HealthCare said it protects patients’ privacy and does not use AI tools during therapy sessions.

Some Kaiser doctors and clinicians, including therapists, use Abridge to take notes during patient visits. Kaiser Permanente Ventures, its venture capital arm, has invested in Abridge.

The healthcare provider said, “Investment decisions are distinctly separate from other decisions made by Kaiser Permanente.”

Close to half of Kaiser behavioral health professionals in Northern California said they are uncomfortable with the introduction of AI tools, including Abridge, in their clinical practice, according to their union.

The provider said that its workers review the AI-generated notes for accuracy and get patient consent, and that the recordings and transcripts are encrypted. Data are “stored and processed in approved, compliant environments for up to 14 days before becoming permanently deleted.”

Lawmakers and mental health professionals are exploring other ways to restrict the use of AI in mental healthcare.

The California Psychological Assn. is trying to push through legislation to protect patients from AI. It joined others to back a bill requiring clear, written consent before a client’s therapy session is recorded or transcribed.

The bill also prohibits individuals or companies, including those using AI, from offering therapy in California without a licensed professional.

State Sen. Steve Padilla (D-Chula Vista), who introduced the bill, said there need to be more rules around the use of AI.

“This technology is powerful. It’s ubiquitous. It’s evolving quickly,” he said. “That means you have a limited window to make sure we get in there and put the right guardrails in place.”

Dr. John Torous, director of digital psychiatry at Beth Israel Deaconess Medical Center, said that people are using AI chatbots for advice on how to approach difficult conversations, not necessarily to replace therapy, but that more research is still needed.

He’s working with the National Alliance on Mental Illness to develop benchmarks so people understand how different AI tools respond to mental health.

Healthcare workers say they are worried about what they are already seeing can happen when people struggling with mental health issues interact too much with AI chatbots.

AI chatbots such as OpenAI’s ChatGPT aren’t licensed or designed to be therapists and can’t replace professional mental healthcare. Still, some teenagers and adults have been turning to chatbots to share their personal struggles. People have long been using Google to deal with physical and mental health issues, but AI can seem more powerful because it delivers what looks like a diagnosis and a solution with confidence in a conversation.

Parents whose children died by suicide after talking to chatbots have sued California AI companies Character.AI and OpenAI, alleging the platforms provided content that harmed the mental health of young people and discussed suicide methods.

“They are not trained to respond as a human would respond,” said Dr. Dustin Weissman, president of the California Psychological Assn. “A lot of those nuances can fall through the cracks, and because of that, it could lead to catastrophic outcomes.”

To be sure, some users are finding value and even what feels like companionship in conversations with chatbots about their mental health and other issues.

Indeed, some say the AI bots have given them easier access to mental health tips and help them work through thoughts and feelings in a conversational style that might otherwise require an appointment with a therapist and hundreds of dollars.

Roughly 12% of adults are likely to use AI chatbots for mental healthcare in the next six months and 1% already do, according to a NAMI/Ipsos survey conducted in November.

But for mental health workers like Marcucci-Morris, AI by itself is not enough.

“AI is not the savior,” she said.

Two dozen people who sued the owners and tenants of a Carson-based warehouse responsible for a putrid smell emanating from the Dominguez Channel waterway, which led to hospital visits and headaches, won a multimillion-dollar verdict Friday.

Those plaintiffs were awarded $6 million in punitive damages along with $2.89 million in compensatory damages in a mass tort lawsuit that dates back to 2021.

“Carson is a working-class community of janitors, barbers, bus drivers and longshoremen,” said attorney Gary Praglin of the Santa Monica-based law firm Cotchett, Pitre & McCarthy. “The defendants forced us to trial because they didn’t want to pay these people and this is recognition of their suffering.”

The punitive damages will be split equally among 24 Carson-area residents, amounting to $250,000 for each. The compensatory damages for medical claims ranged between $40,000 and $240,000 per client.

What remains to be seen is what happens to 13,750 additional plaintiffs who are also seeking compensation.

The court will determine the next steps, whether that’s additional trial proceedings or settlements. But should the remaining plaintiffs ultimately receive similar compensation, “we’re talking about the largest recovery for breathing toxic fumes in the history of California,” Praglin said.

On the hook for damages are San Francisco-based logistics company Prologis and its subsidiary Liberty Property LP, which owned the warehouse next to the Dominguez Channel in Carson. Prologis did not respond to an email seeking comment Friday.

Also included among the defendants are the Nourollah brothers of Los Angeles, who owned two businesses — Virgin Scent and Day to Day Imports — that operated out of that warehouse.

A call to an attorney for the Nourollahs was not immediately returned Friday.

The lawsuit is one of a few court cases against the same group of defendants, including one filed by the California Regional Water Quality Control Board.

The roots of the legal action date back to Sept. 30, 2021, when a large fire engulfed the warehouse and distribution center of the cosmetics corporation Virgin Scent. The blaze lasted multiple days and required the services of 200 firefighters to extinguish.

The warehouse and surrounding storage areas were filled with stacks of pallets and cardboard boxes containing highly flammable ethanol-based hand sanitizer, according to court documents.

The fire took place days before the Food and Drug Administration released a warning that some Virgin Scent hand sanitizers contained unacceptable levels of benzene, acetal and acetaldehyde, each of which are hazardous and potentially carcinogenic.

Though the fire was eventually put out, large amounts of soggy, charred debris and hand sanitizer remained all around the warehouse, according to court documents.

That debris eventually found its way into storm drains that flow into the Dominguez Channel, which manages water runoff from surrounding communities.

These toxic elements sat in the channel’s then-stagnant water, which led to a die-off of all vegetation and the emission of foul-smelling hydrogen sulfide.

Residents began to complain of an “unbearable” stench that they said caused headaches, nausea, and eye, ear and nose irritation. The Carson City Council eventually declared a public health nuisance in October 2021.

Within a month, at least 3,000 residents left Carson for out-of-area hotels provided by Los Angeles County. Thousands of others opted for air purifiers.

The South Coast Air Quality Management District responded to more than 4,700 odor complaints within the first month from residents in Carson, Gardena, Long Beach, Redondo Beach, Torrance and Wilmington.

The agency eventually issued five notices of violation to Virgin Scent for a variety of infractions, including for discharging “such quantities of air contaminants to cause injury, detriment, nuisance or annoyance to a considerable number of persons.”