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BMW Suffers Big Setback Against Tesla in California

As a result, Tesla as well as the other plug-in electric car competitors are now no longer at a regulatory disadvantage compared to BMW. Of course, they too could have developed a similar car to fit this new class of car regulation. But in reality BMW had at least a one to two year head start, as it was working with regulators to define this new category despite the other companies' opposition.

BMW was, as of a month or so ago, in the regulatory catbird seat to compete with Tesla in California. Now the California government took a chainsaw and cut down the tree on which BMW was sitting.

Why did they do it?

I don't know. I have reached out to the California Air Resources Board, which decides these things, but have not yet received any reply.

Did BMW do something to break the agreement with the government? Did the government decide to pull the rug from under BMW for no good reason?

In the end, if you want your BMW i3 with the range-extender in California -- and that's likely what most prospective BMW i3 customers wanted -- you're not going to get the white sticker. You're not going to get the $2,500 government rebate. And soon, when the 40,000 green stickers run out, you won't get the green sticker either.

Long story short: Tesla is laughing all the way to the bank about this very sad news for BMW.

At the time of publication, the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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