Tesla Motors just borrowed another half-billion. What was it the late great comic San Kinison used to say?
It never ends! Oh! Ohhhh!
Elon Musk’s electric car operation suffers from Lack of Profit. It is a problem for a business. Unless you have friends in government. Elon relies on these to fund his Iron Man fantasies, which encompass not only his electric cars – which are pretty and quick but preposterous as economic competition to internal combustion-powered cars – but also his very own privatized, for-his-profit NASA, SpaceX.
They make money in the same sense that the IRS has “customers.”
Even so, Elon must borrow. Again. According to the industry publication Automotive News, Deutsche Bank AG has extended Tesla a $1.2 billion credit line. Serious money.
Why can’t Elon raise money?
Where are the investors?
If what Elon’s selling – trying to sell – isn’t fool’s gold, he ought to have no trouble finding people (not government people) willing to back him, because there’s money in it for them. Hence investment. The fact that Elon can’t find such people (except for government people) says a lot about what he’s not selling.
The real Iron Man was Steve Jobs. He did not need “help” from friends in government. He had no trouble finding investors.
He had trouble shooing them away. People lined up (still do line up) to give him money.
iPhones aren’t cheap, but they sell without subsidies. The latest Macs get snapped up by people using their own money – instead of other people’s. This is because Apple products make economic sense, defined objectively as something which enough people are willing to freely buy at a price point sufficient to cover the costs of designing and making the item, plus a profit sufficient to make that item worth making.
By this market criteria, every single thing made by Tesla is a a loser – an economic lemon.
Cue fanboi outrage. It alters nothing.
Fanbois can talk up the Tesla’s looks, tout how quick it is. Compose haikus about them being “the future.” None of this dents the economic indictment against Tesla and Elon Musk himself. Take away the IV line to the taxpayers’ main vein, insist that the “patient” get off the gurney and stand on his own two feet… and we all know what will happen.
This includes fanbois.
Who, by the way, will get a jolt when the endlessly-almost-here Model 3 – Tesla’s first “affordable” electric car – finally becomes available maybe sometime later next year (it has already been delayed several times).
The Model 3’s “affordability” depends hugely on the $7,500 tax write-off that is available to people who “buy” (in air quotes to emphasize the abuse of language) electric cars. But the subsidy is limited to the first 200,000 marks (whoops, “buyers”). Once the 200,000 mark is reached, the company is no longer eligible and the buyer (no air quotes now) must pay full freight.
This means whatever the Model 3’s sticker price turns out to be, that’s what you’ll actually pay for the thing. Not discounted by $7,500.
Musk has stated that the Model X will sticker for “around” $35,000 “before” what are euphemistically called “incentives” (subsidies; i.e., the tax write-off). But most of the marks who’ve put down a $1,000 deposit on the maybe-it’ll-get-built Model 3 won’t be eligible for the “incentive.”
They will discover that they are paying a lot to “save.”
Even with the “incentive,” the car would be a market non-starter. Like solar roof panels (another Musk money pit). The idea sounds great. But the expense is titanic and in the marketplace, cost matters everywhere except when it comes to indulgences. And why, pray, should any person be forced to “help” subsidize another person’s indulgence?
That is the core of the problem with Elon Musk and Tesla.
He is a fabulously wealthy guy with grand ideas he thinks other people ought to pay for.
If he (if his engineers; Musk himself has no engineering bona fides, he’s a finance guy) could design and build an electric car that could be sold without subsidies – and at a profit – then he would.
But he can’t.
No one can.
Or at least, no one has.
Electric cars will only be “the future” if either most people somehow become much more affluent and so cost considerations no longer apply or the cost of electric cars comes way down, such that they can be viewed as other than an indulgence. As an economically sensible alternative to an internal combustion-powered car.
That day may come. But for now, it hasn’t.
And until it does come, carny barking crony capitalists like Elon Musk are only pushing off the day when it may come. By distorting the market. By pushing electric car sexiness and quickness …
By pushing indulgence rather than practicality and economic sense.
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The largest problem of these electric cars is they are SPY cars, and any “self driving” car will be owned by the manufacturer, government, or anyone who whims to own it through electronic means. With electric motors, you no longer have an ability to keep these things out from between you and where the wheels point.
They are slave cars.
The sick thing about subsidized crony capitalism, is that it kills competition and real capitalism by giving the crony capitalist a big price advantage and stifling competition. Not to even mention the moral implications…..
But you know one thing about the Tesla?
Is it ever fun to drive. I recently had the chance to take a 2 year old Tesla S for a drive and what a blast it was.
Seamless, silent, and ferocious acceleration and really nice driving qualities in a big 4 door sedan whose very low center of gravity makes it feel well balanced.
If I had Mitt Romney’s money I’d sure have one just for the fun of it. The thing’s an automotive Hyabussa.
Still, it can’t make it in the market on its own merits.
Hi Erik,
Sure! And so is a 911…
But most people would erupt in rage at the idea of being made to “help” rich people acquire 911s.
It slays me that there isn’t comparable outrage over Tesla.
Trouble is, if you drive it in a “fun” manner…it’s range greatly diminishes. So, pay $100K for a car that’s only fun if you’re just using it for short trips…and all you really have is a novelty. And when it’s time for a new battery, or they no longer support the software, or the endless computers, sensors and servos die, you have one very expensive flower pot to park in your driveway. Even if you can afford a $100K car, chances are you can’t afford THAT kind of $100K car; or at least aren’t stupid enough to want to.
Saint Elon. The wizard of clean energy emerald city. Yellow brick roads to serfdom. Follow follow folllllllllow the carbon credit king and the wonderful things he does for muh environment.
The herd has shifted. The battle for Washington was won. Now there’s a battle for America.
The Great Meme War of 2016
https://www.youtube.com/watch?v=R9B7EsenfFE
I’m about to start collecting Socialist Insecurity. Some may say that is immoral. I consider is just a return of some of what has been stolen from me over the past 50 years.
That’s why social security and other aspects of FDR’s policies that are so devious. Everyone wants what they put in back. I don’t fault you at all, I’ll likely do the same, if it exists then. I’ll have to. I am already six figures deep in “contributions”. 12% of salary adds up over almost three decades of employment. I simply recognize the deeper manipulation involved.
Hi Brent,
I long ago factored out SS “benefits” – though if they are available I will probably take them. For the same reasons you posted. But, key thing, I will not depend on them. I’ve arranged things so that I can and will survive on my own nickel(s). Chiefly by living below my means and by – to the extent possible – not paying insurance.
The fastest way to go broke – or never accrue wealth – is to pay for “coverage.”
I’m actually surprised it’s still around, didn’t plan on it.
Me too. But I will collect it shortly simply because the system was devised so you can’t avoid it unless you’re wealthy…..which leaves me out.
Their “laws” have been written by very devious people. I would have retired last year but Obamacare was going to charge me medicare based on when I made two grand a week. That two grand was hard fought too, requiring over 80 hrs. a week and much more at times, not easy when you’re retirement age. Never mind my gross pay had to cover expenses of living away from home that eat up a great deal of it. It’s all so crooked only the people who study how to work the system actually want it.
That is the pure evil genius behind socialist schemes, like Social Insecurity. You’re forced to participate (pay in), so why have any qualms about taking it back- although in many cases, people get back much more than they’ve paid in (but much less than if they had been free to take that money and invest it) and most don’t even realize that the benefits they receive are being paid by the people who are working (paying in) now.
It’s a conundrum, but considering that we live in a society where the vast majority of those paying into the system approve of suchc a system, and elect only those who will perpetuate that system; and that if we refused the stipend, we wouldn’t really be accomplishing anything, I guess not taking the benefits really wouldn’t achieve anything.
It’s not like we have a choice, we are forced to pay; we may as well as well “play” when it’s our turn,, because nothing’s going to change unless we somehow arrive at a point where people again start valuing liberty and sound economics, and ditch the SS system, which is not likely to ever happen. The only way we’re going to be rid of it, is when the whole monstrosity of an economic-political system crashes and dies.
We could use the same mentality to say “Should I drive on the roads that others were compelled to pay for?”- but hey, we’re slaves, so although it may go against everything we believe in, nobody asked us or sought our permission, so I guess it’s not the worst thing in the world to take a few of the crumbs massuh offers.
Trouble is: Where does it end? Such a system is truly the work of the Devil, and makes everyone want to perpetuate it so that “they can get theirs”.
Musk is a con artist like the others that are draining the taxpayers -so they can operate- pretending they are legit companies. Legit companies make profits and don’t screw the taxpayer like Rich Professional Sports Organizations and electric car crooks.
They pay their players millions of dollars but cant afford to build their own sport stadiums. Something wrong with that picture.
This electric car boondoggle is a SCAM upon the citizens and taxpayers. These “feel good” politicians are purchased with loads of money from lobbyists and others.
Let the Electric Auto Industry fend for its self. Same for Solar Power Industry, the Ethanol fiasco that resulted in raising food prices, and the Self- Driving Auto that is being shoved upon the driving population.
Self- Driving vehicles, the greatest dream of BOMBING Terrorists has come true. They will not have to drive their vehicles into airports or trucks into crowds. Just program an self- driving auto without any drivers and turn them into MISSILES on the innocent public.
Being an observer of Arizona Politics and their shenanigans, I see they managed they bribed Faraday Electric Auto to build there, even as it going belly up at its location in Nevada. And they invited lawbreaking Uber to operate in the state, without any laws to observe. This amount to great growth in AZ.. sorta like PayDay Loans business that the citizens voted out and the Governor put back into business, just under a different scheme of operation.
So now Uber is turned loose up on driving public of AZ. My observation of the AZ elected officials, you have to raise a lot of rocks to find anything close those the elected officials in the state from the top down.
If you have something illegal in another state, come to AZ with bags of monies and they will make it LEGAL. The state tried to regulated Illegal Aliens from Mexico and the Chamber of Commerce was the first to file multiple lawsuits against it. So, companies are used to not abiding by the laws in Arizona. No problems, the state does not have any real watch dogs to keep an eye on anything.
The citizens voted in a Minimum wage law and the friends of the elected officials are in court trying to kill it.
It is no wonder that the Photo Camera Industry is located in AZ. They write the laws on Red Light Cameras and Photos Camera regulations.
They did not like the way independents voted in past elections, so they do not permit independents to vote in primaries elections, anymore.
You are forced to declare of being a member of one of the two CROOKED Parties.
We need to STOP all this govt. and taxpayers subsidies for so call companies and sports teams, to operate, in ANY states, period.
They need to grow up and act like real companies, now.
Agree w/most of what you are saying, but what’s your problem w/Uber? Are they lawbreakers because they won’t kowtow to the crony taxi monopoly?
The issue with payday loan bans is that treats people as being too stupid to understand what they are getting into. Maybe they are, but the people voting for the bans are probably the same people going upside down into another eight year new car loan.
That $7500 thing….really gets smoke coming out of my ears. Go look at the current window sticker for a Ford Shelby Mustang and it lists a $1300 “gas guzzler tax”.
Only a pretentious, joy-less, soul-less little prick-sphincter would think that’s a good thing.
Hi Aljer,
Hey, are you registered here? I ask because your posts keep getting kicked over to the Moderation queue… trying to figure out why!
I checked… and upgraded you… let’s see whether that fixes it! 🙂
Well, thank you, but as Groucho once put it quite eloquently: I refuse to join any club that would have me as a member.
You still keep getting put in the Moderation queue! I have no idea why….
At this point, I am thankful for any government spending that does not involve killing people en mass abroad. I think of it this way, Telsa engineers have me over a barrel. They can work in the defense industry or Tesla. Sorry Mr Peters, I pick Tesla, and it will probably cost me less.
Tesla reinvents itself as a data warehouse. If only miles of data were dollars.
The Tesla Advantage: 1.3 Billion Miles of Data
https://www.bloomberg.com/news/articles/2016-12-20/the-tesla-advantage-1-3-billion-miles-of-data
If these engineers are going to do anything with government money, it ought to be for defense, in whatever capacity. At least it’s consitutional.
As for this Musk, the sooner we scrape this fraudulent turd off our national shoe the better off we will all be.
Hi Brother John,
The whole “defense” thing is a sick joke. If just one ballistic missile submarine were kept operational and on patrol, the entire rest of the “defense” budget could be eliminated. Or at least, 90-plus percent of it.Meanwhile, that one boat – which contains a dozen SLMBs, each with multiple warheads (IIRC) is sufficient “defense” to lay waste to most of Europe, Russia, China, etc. That one boat has more destructive power on board than the combined might of everything conventional used to defeat Japan and Germany in WWII. Surely deterrent… surely defense enough.
But, no.
“Defense” – that is, offense – requires 10,000-plus (literally, that’s the number) nuclear warheads and multiple carrier battle groups and air wings and hundreds of bases and tens of thousands of tanks and so on and so forth.
As far as Musk: He is the apotheosis of The American Businessman circa 2017. That is a plugged-in rent-seeker.
Musk is not fraudulent, the cars and solar roofs are real. He is speculating that they will be more useful than their cost in the future, which may not be true. As far as him getting control of fed dollars, people called senators and representatives are voting for it. That is how republics work. General welfare blah blah blah.
Good news Trump tweeted he is not on board with the F-35.
George,
Speculating isn’t the problem here; it’s that he’s speculating with our money, taken without our consent.
Ok George, where’s my half billion dollars to start a business that makes real products? I’ve got ideas that would only cost a small fraction of that. Good solid manufacturing employment behind them too. I’ll even put my factory in south suburban cook county if I get all the political support someone like Musk gets.
Oh wait, I haven’t made a billion to get into the right circles for that.
Frankly, I think if a company takes any level of government funding or help they should open source what they are doing. We all paid for it, after all.
Hi George,
They could also work in the real economy.
Hell, I do.
I chose to not be rich whore, peddling “conservative” pabulum – and yeah, it cost me. But although I am not rich, I’m surviving. And I possess something worth much more than money: My self respect.
I get up every morning and (in winter, as now) throw some logs on the fire and turn on the Mr. Coffee, then throw the bathroom switch on to brush my teefus and view my reflection in the mirror. The sight doesn’t make me gag. Whatever I write, it’s me. I am not a conduit, a literary vagina here to pleasure the member that inserts a dollar in my slot.
I value this.
I’m by no means perfect (ask my ex). But I do my best to not be part of the problem.
Unless you have no choice, you have a choice.
It’s up to us to choose the right one.
The consumerist reports the latest “autopilot update” comes with lots of restrictions
https://consumerist.com/2016/12/22/tesla-changes-autopilot-again-restricts-driving-to-posted-speed-limit-on-some-roads/
I’m afraid electric cars will be the future, but because people will become more affluent or because the cost will come down. They will be the future because Uncle will regulate ICE vehicles out of existence. The whole world will be like the former Soviet Union. The Proles will walk or ride bicycles, while the elite tool around in their electric Zils.
Hi Zathras,
Yes, I think that’s the intent… it’s up to us to not allow that to happen, though!
I am putting a small block 350 with a carb in a used truck I bought. Make your own choices. If it becomes illegal for me to drive this truck I am going to buy horses. Never submit to such slavery.
Hi Lysergic,
Amen!
Some newer engines can be shorn of all the crap, too – or at least, most of it.
Taxpayer bounty levied, all citizens entitled to a Tesla lug nut! (It never happens this way and don’t do this.)