California’s $165M Tesla Semi Deal Faces Criticism Over Delays & Fair Access

California’s ambitious plan to rapidly electrify its truck and bus fleets is facing mounting criticism over a $165 million funding allocation earmarked for Tesla’s long-delayed Semi truck. The decision to reserve such a substantial portion of the state’s clean-air program funds for a vehicle that is not yet widely available – and has faced repeated production setbacks – has sparked accusations of preferential treatment and market manipulation.

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 significant discounts on the Tesla Semi, according to state data obtained by the Los Angeles Times. The battery-powered big rig has been advertised as capable of traveling up to 500 miles on a single charge.

However, the substantial funding has drawn outrage from some in the trucking industry, who allege the state is unfairly favoring the world’s wealthiest automaker for a vehicle that remains largely unproven. Nearly eight years after Tesla CEO Elon Musk first unveiled the Tesla Semi as a concept, it remains difficult to acquire.

Critics argue the Tesla Semi shouldn’t have qualified for government funding at all, citing concerns that the vehicle lacked the necessary certifications and approvals to be legally driven on California roads at the time Tesla submitted its voucher requests. Despite these concerns, the incentives have effectively positioned the Tesla Semi as a front-runner in the emerging electrified heavy-duty truck market.

“I don’t think it would be an overstatement to say What we have 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 originates from the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP), a state program designed to reduce pollution and greenhouse gas emissions in the goods-movement sector and public transit. Since its inception in 2009, the program has allocated over $1.6 billion – a combination of state funding and incentives from local ports – to support the purchase of electric, hydrogen, and other low-emission vehicles.

The program aims to address a significant environmental issue: Heavy-duty trucks, though representing only 10% of vehicles on U.S. Roads, are responsible for 45% of smog-forming nitrogen oxides and 58% of lung-aggravating soot.

However, concerns have been raised regarding a lack of thorough oversight and accountability within the program, allowing a small number of manufacturers to capitalize on its substantial funding. Following inquiries from the Los Angeles Times regarding Tesla’s vouchers, the state’s public data for HVIP was revised, reflecting lower funding amounts for Tesla and other major automakers. Officials adjusted the publicly accessible data to exclude local port funding, making Tesla’s funding appear significantly smaller.

CARB officials also noted that additional EV incentives from local utilities – not administered through the state voucher program – helped subsidize Tesla Semi orders, lessening the amount of grant funding awarded by the state.

An analysis of earlier data indicated Tesla could have received up to $202 million, roughly a third of all funding allocated during 2025 and 2026. The value of the vouchers had initially ranged from $120,000 to $430,000 but were subsequently listed between $84,000 and $351,000.

Tesla’s Questionable Qualifications

To qualify for a voucher, manufacturers must obtain a zero-emission powertrain certification demonstrating the vehicle meets specific performance standards. Each model year requires written approval from CARB and inclusion 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 requested anonymity for fear of reprisal from state officials. “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 stated they could not directly answer how Tesla secured state funding, citing the confidential nature of vehicle certification information. However, CARB insisted Tesla would not receive state funding until requirements are met and vehicles are delivered to customers.

A Lifeline for EV Makers

Tesla’s funding surge coincided with a policy change two years ago that eliminated the limit on the number of vouchers a single manufacturer could secure at one time. This guardrail had been intended to prevent major automakers from monopolizing California’s clean-transportation funding and hindering the deployment of electric vehicles.

The program typically operates on a first-come, first-served basis, creating intense competition for funding. During a recent funding cycle, 68% of the available $335.6 million was allocated within two days.

The program’s structure has allowed some companies to quickly secure a large portion of funding without possessing the inventory or production capacity to deliver the vehicles promptly, disadvantaging competitors. For years, a single manufacturer was generally limited to 100 vouchers at a time until those orders were fulfilled. CARB officials stated the cap was removed because it unintentionally limited customer choices.

Paragon or Prototype?

Ironically, Tesla CEO Elon Musk has publicly opposed government incentives for EVs, asserting that eliminating these subsidies would strengthen Tesla’s position in the industry. Despite this stance, Tesla has actively sought millions in state and local funding for its Semi.

Musk unveiled the Tesla Semi prototype in November 2017, touting it as a revolutionary all-electric truck that would reduce emissions from the nation’s shipping industry. He initially projected production to begin in 2019.

However, early customers, such as PepsiCo, have waited years for their orders to be fulfilled due to manufacturing delays. It remains unclear how many Tesla Semi models have been sold. State data shows Tesla has received payment for only five Semi models delivered last July to Nevoya Transportation LLC.

State officials anticipate many of the Tesla orders will be fulfilled by late 2026. However, questions persist regarding the vehicle’s performance and design. During testing at the Port of Long Beach, a design flaw was identified: drivers were unable to roll down the window to present necessary paperwork at the gated entry, leading skeptics to question whether the truck is truly ready for widespread use.