Tesla CEO Says Gov't Loan Is 99% Sure and Deserved 652
N!NJA writes "Two major themes of our time — the desire to achieve energy independence and the furor over public bailouts — have collided in the drama surrounding swanky electric carmaker Tesla. Late last year, a New York Times column whipped Silicon Valley innovators and bailout-weary taxpayers into a frenzy. Valley professor and writer Randall Stross wrote that Tesla was hoping for government money to produce its cars, which only the very wealthy could afford. It wasn't exactly true, since the loan was intended to produce the $50,000 Model S sedan, not the $109,000 Roadster. Still, Stross called it a risky, waste of taxpayer money that would only benefit the wealthy and bailout VCs who'd sunk money into the money-losing company. Never mind, Tesla has developed two cars on less than $200 million — compared to the $1 billion General Motors spent developing the now-deceased EV1."
In other news... (Score:5, Insightful)
Tesla Business Plan (Score:5, Insightful)
(Yes, I know you get it. I'm replying to your comment to back you up, not to hassle you.)
Stross called it a risky, waste of taxpayer money that would only benefit the wealthy and bailout VCs who'd sunk money into the money-losing company.
Tesla's business plan has always been to work their way down to an affordable car. They can only accomplish this by building some expensive ones first, because they don't have an outlet for large numbers of cars nor income from other lines to pay for the sunk costs of development.
If anything, we need to eliminate all subsidies and allow the major automakers to fail. Then we carve them up into smaller automakers, pat them on the back, and set them loose. This keeps them in business and in theory encourages innovation. GM is simply a balkanized tool of the status quo and it's incapable of turning a corner. The same is true of all of the major American and Japanese automakers. But if we are going to continue handing out money to failing automotive business models, we should certainly give some to Tesla motors in the hope that they can not fail to execute their business plan and after the luxury model, bring us a relatively affordable family car with a useful range.
WE should end free trade. (Score:3, Insightful)
Problems of GM should be viewed in light of the failed public policies of the US government. The question is not that GM should have been allowed to go belly up, but, how did GM last so long to begin with, in the face of such governing incompetence on both sides of the aisle.
Front and center is this policy of free trade. The idea of American competition is a total sham. We have been hearing for 50 years that opening our markets to the world would improve our standard of living, and induce the world to do t
Re:WE should end free trade. (Score:5, Insightful)
We're miles better than before. It's inarguable. Pick any measure you want - real GDP per capita, etc - we are better off. My Google Fu is failing at the moment, but there are several economic studies that have shown the differences between countries that have free trade and those that don't. The group with free trade shows much higher growth over any period you look at than does the group without free trade. I wish I had a link at the moment, but there are peer reviewed journal articles with this data.
Please provide evidence to support this statement. The WTO is aware of 421 regional trade agreements, over 90% of which are free trade agreements. These include NAFTA, CAFTA, EU, EFTU, MERCOSUR, AFTA, COMESA, etc. On top of that, many countries have free trade agreements with countries outside of their regional area.
Protectionist policies are part of what has hurt the US automakers. They were protected for too long and they weren't forced to be competitive. If we're unable to make cars and be competitive, then we shouldn't do it - it's economically inefficient. Why pay more to do it ourselves than we could pay someone else to do it? That's just bad business. Protectionist policies are failures - protecting an industry causes higher prices and inferior quality. Competition improves quality and lowers prices.
Additionally, there is a strong ethical argument against protectionism. "Buy American" is essentially a racist statement. You're implying that the value of an American is higher than that of someone from another country by saying that it's better to protect industries in this country to protect the jobs. At some point, we've got to start calling out "Buy American" for the racist statement that it is.
Re:WE should end free trade. (Score:5, Insightful)
I guess that depends on what you mean by "Buy American." Honda and Toyota have manufacturing plants in America. Is it "buying American" when you purchase a car manufactured at one of these plants? I'd argue that it is. All other things being equal, I see nothing wrong with "Buy American." It isn't really that much different than the "Buy Local" movement that is popular across the country, especially here in Vermont.
Buying products that are made/grown in closer proximity to you has many advantages:
* Lower transportation costs & less pollution
* Keeps the money you're spending in the local economy
* Helps to secure employment for local people
* Encourages cohesion in the local community
Obviously, the scale of "local" depends on the situation, but I don't see why at least some of the benefits don't scale up to the national level. What is wrong with wanting to improve the economic situation in the neighborhood/town/city/state/country where you live? You do, after all, live there. You need to have a job. A steady income. Services like fresh water, sewer, police, hospitals, etc.
Re:WE should end free trade. (Score:4, Interesting)
You're from Vermont, have you read McKibben's book? I read it, and while I like certain aspects of it, I'm just not sure it's realistic.
Why do you want to limit economic improvement to certain people?
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I guess that depends on what you mean by "Buy American."
Buying products that are made/grown in closer proximity to you has many advantages
Well, I agree with buying local anywhere in the world is the best way to go. I think the nation state is a good as boundary as any but I can see smaller nations wanting to buddy up.
What is wrong with wanting to improve the economic situation in the neighborhood/town/city/state/country where you live?
Agreed. It's like, people think, hey, nothing will happen when they buy
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Additionally, there is a strong ethical argument against protectionism. "Buy American" is essentially a racist statement. You're implying that the value of an American is higher than that of someone from another country by saying that it's better to protect industries in this country to protect the jobs. At some point, we've got to start calling out "Buy American" for the racist statement that it is.
I couldn't agree more. Remember all those grandstanding congressmen grilling the auto makers but making sure to get their soundbites in about how they all drive American cars? If I were up there I'd be saying "I drive a Mitsubishi Eclipse because the cars you guys make all suck! Now get your asses in gear and make cars that people want to buy for a change!"
It reminds me of the talk about protecting 'American' jobs, all the anti-visa and anti-immigration groups calling for protectionism of American workers.
Re:WE should end free trade. (Score:4, Insightful)
The problem with those growth studies, is that it always seems that the "growth" is always concentrated to the upper end of the economic scales. I don't live their and don't care about their prosperity - and I suspect a growing number of other working Americans are starting to notice the same thing. So the "growth" proponents are really going to have to come up with something new to sell.
I do agree that traditional "trickle down" bailout programs that propped up these auto makers in the 80s have propped them up in a position that does not help them become competitive, and the proof is in the pudding - if these American car companies want me to buy American, they had better make a better car than I can get for the money from an American built Japanese car company.
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The problem is that US car companies *are* building cars many want to buy... regulations prevent them from selling them here...
There's a turbo diesel PT Crusier that get 65+ mpg... I'd buy one in a heartbeat... can't get one here...
If the US gov would move the sulfur emissions regulations to the fuel side (require sale of only sulfur free diesel) rather than the cars, we'd have more fuel efficient cars than we'd know what to do with ...
Sadly, we've had decades where the petro industry has been lining the po
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Re:WE should end free trade. (Score:4, Informative)
"Buy American" is essentially a racist statement.
Eh, last I checked, "American" isn't a race...
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Re:WE should end free trade. (Score:4, Interesting)
Front and center is this policy of free trade. The idea of American competition is a total sham. We have been hearing for 50 years that opening our markets to the world would improve our standard of living, and induce the world to do the same, and neither has happened. Instead, the world is more protectionist than ever, makes every excuse to avoid reciprocating imports.
Please mod this up.
Any "conservative" or "libertarian" promotic so-called "free trade" is a liar and a fraud. They simply DO NOT WANT FREE TRADE. What they want is to have trade barriers altered to favor THEIR PRODUCTS. Not the American economy as a whole. Not the taxpayer. But themselves and their campaign donors. The same "free traders" that decry subsidized health care don't say one word about the MASSIVE US agricultural and energy subsidies, because they're making money in those industries. They're making money in the insurance companies as well which is why they fight tooth and nail to cut costs there. Insurance, basically ALL insurance in ALL forms, is a fraudulently used to abuse consumers.
As I've said numerous times before the #1 problem in America, far beyond "terrorists", the "drug war", etc. is CORPORATE fraud. Corporate fraud is the cause of the financial crisis. Corporate fraud eats up about 50% of every American's paycheck. I believe the problem has gotten so bad that LLCs have to cease to exist for fraud claims. The only solution at this point is to hold officers and major shareholders personally and individually criminally responsible for corporate fraud. We need a dedicated federal agency staffed by hundreds of agents doing NOTHING by corporate fraud prosecutions. Such an agency would cost $0. It would more than pay for itself in fines.
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Re:Tesla Business Plan (Score:5, Interesting)
Batteries(95% efficient) * Electric Motor(95% efficient) = 90% efficient
ICE(20-25%) * Batteries(95% efficient) * Electric Motor(95% efficient) =
23% efficient
The tesla has a range of 220 miles on 53kwh of batteries.
The amount of energy in the batteries is equivalent to about 2 gallons of gas.
Electricity cost to fill the pack, about $4.
I agree that the Aptera is a more innovative design, the slippery shape is more aerodynamic and the front wheel drive train is more efficient at capturing regen brake energy more effectively. The Aptera will initially only be sold in California and I am not sure how a three wheeler would handle the snow so I probably wont be buying one soon.
But the Tesla pure electric drive train is more efficient overall and they have been building and delivering vehicles, but as you said 120k is too much for a vehicle. The model S is more tempting, but still very pricey.
Re:Tesla Business Plan (Score:5, Insightful)
Batteries(95% efficient) * Electric Motor(95% efficient) = 90% efficient
...
You forgot a a major part of the system. It doesn't start at the batteries. It starts and the power plant. The losses over just the transmission lines are estimated at 7.x%. The actual generation equipment isn't 100% efficient either.
It still is better then internal combustion by a whole bunch though and power plants are much more efficient then an ICEs and cleaner too...
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Ah, but if you are going to do that kind of calculation you then have to factor in the costs of exploration, drilling, refining, transporting, storing, and pumping fossil fuels. Plus the intangibles like the economic impact of gas stations to a local economy; etc. You also need to factor in the costs of locating, mining, and processing battery materials vs their real world life span. One could also include the cost of shipping, storing, and recycling the batteries.
Then you get into the maintenance costs.
Re:Tesla Business Plan (Score:5, Insightful)
Are you serious? "Offloading the environmental footprint to the electric generation station" is a *HUGE* step forward for automobiles.
And their vision is far more than a sports car. Its about using cash flow and experience gained from high end luxury cars to create mass market electric vehicles that normal people would want to drive. Not to knock Aptera, but Tesla is creating a new kind of car company. Aptera is creating an interesting device.
Re:Tesla Business Plan - worth it! (Score:3, Insightful)
This is just plain stupid. Look, Tesla wants to be "alternative" but in reality it's just a sportscar with an electrical motors and a shitload of batteries. That's their vision. What the hell is innovative about that? You use the similar amount of energy as any car, but now in electrical form.
The goal is to fuel with electricity, which is obtainable in many environmentally friendly, renewable or "endlessly-available" sources, as opposed to fueling a car with less environmentally, less renewable sources.
:-) :-) :-) :-) :-) to :-| :-) to :-(
:-( :-) to :-|
Tesla/Electric fuel sources:
windmills
hydroelectric
solar
geo-thermal
nuclear
combustion
GM/hybrid/Internal combustion energy sources:
petroleum - very
ethanol
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What? GTFO of here.
http://www.youtube.com/watch?v=VUhPaxvhJCI [youtube.com]
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Siiiigh, do we have to go through this every time ?
i)Even if that was all they did it would still be worth it to move emissions away from population centers.
ii)Power station turbines are more efficient than internal combustion engines, even when transmission losses are taken into account.
iii)Because power stations are stationary you can fit them with better filters, catalysts and scrubbers that are superior to wha
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Republicans are the ones alwasy being accused of bowing to big corporate interests, but both sides do it. They just cater to different industries for the most part, and the Dems do a better job of making it look like they are doing it for the people that work for the company instead of the company. However, I think the political side of things is less of a motivator than the damage such large compan
Re:Tesla Business Plan (Score:4, Interesting)
(I'm not sure that it actually is though. It moves the burning of fossil fuels to somewhere else, but doesn't eliminate it. I'm also curious as to what plans they have for recycling the batteries at the end of the vehicles life span, what is the potential for environmental contamination in the event of an accident or car fire, etc)
First off, when it comes to combusting fossil fuels, the internal combustion engine is one of the least efficient ways of doing it. Then toss that in with the whole drive train and you lower its efficiency even more. You're right that Tesla isn't eliminating fossil fuels but pollution control and efficiency are a lot easier to attain at a power plant than in a car. And if power generation shifts to cleaner technologies then these cars are allowing for cleaner driving. As for recycling, the batteries are recyclable and aren't anything foreign to the world (we've been using Lithium batteries for a while now). I would hope that Tesla would at least facilitate (if not run) the recycling of these batteries for their customers.
Re: GM Pension (Score:4, Interesting)
Buy and bailout GM just to protect the pensioner?
I know for a fact (being the grandson of a pensioner) that Goodrich has enough money in their pension fund that none of their current pensioners have a single worry were Goodrich/Michelin go bankrupt. It's already set aside. In fact, they sent out a letter to the pensioners saying that they put aside TOO MUCH and were being required by the IRS to take some back. (Capital-to-pensioner ratio was too high.)
Why did GM not put the money aside into an interest-bearing escrow account all along? It is tax-deductible, and we all know how much corporations like deductions. That should've been set aside long ago as a portion of each paycheck everyone's parents and grandparents earned.
I don't think that we should feel obligated to buy a GM car now because they didn't manage their pension money properly yesterday. It would be cheaper just to top off the pension fund and provide some new start-ups with low-interest loans to get themselves on their feet and managing their money more wisely.
1 step forward, 2 steps back (Score:5, Insightful)
The thing is, alternative energy DOES have a long way to go.
I was a big fan of the Tesla until Top Gear's review. It seemed like the perfect electric car: it can smoke most internal combustion cars off the line, AND it can run for more than 200 miles on a single charge. Plus, there are the benefits of less emissions due to economies of scale and a cheaper running cost. But Top Gear pointed out that once you deplete the battery, you have to charge it all night before you can use it again (I think the exact time was 14 hours).
So, awesome, I can go for a Sunday drive in a fun car and feel good about it. Except that I only have a few hours for this drive (if I'm driving cautiously), and once I'm done, I'm done for the day. So it's one step forward, but two steps back. The car doesn't adapt to us, we have to adapt to it. This isn't right, the next alternative fuel needs to fit our lifestyles or people are unlikely to change for it. That's why we need something that can be refueled quickly, which the Tesla certainly is not.
Re:1 step forward, 2 steps back (Score:5, Interesting)
Point is, this can change with a little work and/or commitment.
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Re:1 step forward, 2 steps back (Score:5, Informative)
I think the only bad impression I did get from it was the mileage on the battery. Sure, they were driving the car hard, but the life span didn't seem up to par.
Top Gear admitted that it didn't actually run out of charge. The entire "pushing it back" scene was staged.
They "estimated" that it would only last 55 miles sprinting at top speed... but you know what? A Bugatti Veyron will only go about 60 miles or so if you sprint *it* at top speed. Track driving ranges have nothing to do with normal city/highway driving ranges.
which subsequently overheated and then had some major subsystem failure....
The vehicle never heated; that was faked, too. The "system failure" was real, but way overplayed. In the process of thrashing it on the track, they blew one brake fuse (of several). It took a matter of minutes to swap out the fuse. At no point during the filming was Top Gear without a fully working Roadster.
Don't be surprised; they fake tons of things [google.com], and Clarkson is a huge hydrogen fanatic (he's admitted [autobloggreen.com] that he would have trashed the Roadster even if everything had been flawless because he sees hydrogen as being the future)
Don't trust everything you see on TV.
Re:1 step forward, 2 steps back (Score:5, Informative)
he's admitted that he would have trashed the Roadster even if everything had been flawless because he sees hydrogen as being the future
That is so fucking ignorant it's not even funny. Unless he's talking about hydrogen combustion which everyone agrees is a just a stepping stone to fuel cells and not the end goal, then hydrogen cars ARE electric cars. The fuel cell generates power, which gets stored in batteries and large capacitors, which get used in the same way as an all-electric car would use the power.
Do you know what the difference is? The difference is that everyone already has electricity available in their homes, but hydrogen requires a whole new infrastructure to be built. That and the added inefficiency of using electricity to produce the hydrogen that will be transported to the fueling stations only to be converted back into electricity in the car. I never understood why anyone would even consider hydrogen for fueling cars, much less prefer it.
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Well, the one advantage of hydrogen is refilling times. It is very straightforward to refill a hydrogen tank quickly and be off on your way (though some safety issues do exist).
Do you know how long it takes to refill, for example, the Fuel Cell Equinox (GM's hydrogen showpiece)? 25-30 minutes for a full tank. Phosphate and spinel batteries charge in 10-20 minutes, and titanate batteries in under 10 minutes from quick chargers. GM is looking at doing what Honda does, which is store the hydrogen in bulk at
Re:1 step forward, 2 steps back (Score:5, Insightful)
Did you not bother to read the link?
After reading Clarkson's review online, it's clear that the biggest problem the TG presenter has with the Roadster is that it's not powered by hydrogen. Clarkson suggests that even if the car were completely flawless, it would still be old-tech, since hydrogen is clearly the fuel of the future as far as he's concerned, and until then, apparently we should all be content with fossil fuels
From the original, re Clarkson:
In the fullness of time, I have no doubt that the Tesla can be honed and chiselled and developed to a point where the problems are gone. But time is one thing a car such as this does not have. Because while Tesla fiddles about with batteries, Honda and Ford are surging onwards with hydrogen cars, which don't need charging, can be fuelled normally and are completely green. The biggest problem, then, with the Tesla is not that it doesn't work. It's that even if it did, it would be driving down the wrong road.
Clarkson has repeatedly and publicly expressed his disdain for electrics and his love of hydrogen. This is just yet another example.
Re:1 step forward, 2 steps back (Score:4, Insightful)
So, awesome, I can go for a Sunday drive in a fun car and feel good about it. Except that I only have a few hours for this drive (if I'm driving cautiously), and once I'm done, I'm done for the day. So it's one step forward, but two steps back.
Maybe. Or maybe that means we should put more money into battery-swapping stations.
It doesn't seem to me that a problem like that should cause you to say, "Oh, whoops, I guess we can't use these cars because the battery runs out after driving for a few hours straight. Sinking any more money into this would be a waste." You run out of gasoline after driving for a few hours straight, and we developed a system where our country is littered with "gas stations" to help us refuel.
Re:1 step forward, 2 steps back (Score:5, Informative)
You do realize that Top Gear admits to having faked the episode, right? It's an entertainment show; quit taking it so seriously.
As for your particular example: No, it doesn't take 14 hours to charge. The *standard* Tesla charger takes about 3 hours to charge a fully dead battery, and that's only *if* you drove it about 240 miles that day on a drivecycle akin to the EPA combined numbers / 120-200 if you raced everywhere / 50-100 if you were sprinting on a track. How often do you drive 240 miles a day, or race 120-200 miles? Even if you only charge it on a standard garage NEMA 5-15 (they're usually on a 20A breaker, so 18A is a safe draw, and let's assume 117V): Wall to wheels on the Roadster is about 250Wh/mi, combined. The average person drives about 35 miles a day. 35mi*25kW/mi=8750Wh=8750VAh. 8750VAh / 117V / 18A = 4.15h. So even if you, for some reason, *don't* have the standard charger installed, you can easily handle your daily drive and then some just on an ordinary wall socket. And a dryer socket has 3 times the power as a garage socket, and a range or RV socket 5 times the power.
That's why we need something that can be refueled quickly, which the Tesla certainly is not
Tesla is working on 45 minute charging stations for the Roadster and Model S. Of course, that limitation is due to their particular, unusual choice of batteries. Most other li-ion variants being considered for automotive applications can charge far faster. The titanates, for example, can charge in 5 to 10 minutes. Oh, and Tesla is planning to offer pack swapping for the Model S.
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And my diesel can 'charge' in 1-2 minutes, even on the move
That's fascinating! So how does that work? Is there a refueling aircraft that approaches from at front, dangling a gas pump on a boom arm, and you maneuver the car to get the fill? The rest of us have to slow down, take an exit, drive to the gas station, pull up to a pump, stop the car, get out, take the gas cap off, hook up the pump, fill, remove the pump, pay, put the gas cap back on, get back in the car, start it back up, drive out of the stat
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So the range/mileage standard for diesels now is "it's not unheard of"? Meanwhile, the standard for electrics seems to be "what happens if you race it on a track as fast as you can".
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The problem is the batteries ... but if you wait until super batteries appear before even starting to develop a car then you'll never make a car. It's chicken and egg.
The first car was obviously going to be expensive to buy so it had to be something flashy (if it was dull/mundane the rich people would ignore it). It was always very high-risk.
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You have to buy 2 according to Top Gear having one on charge. Why not carry that idea further and have an easy change battery station where all of the gas stations are and it will work.
That's the real tough nut to crack, infrastructure, infrastructure, infrastructure.
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The government shouldn't pick winners and losers regardless of what the perception of the technology is. No government loans for Tesla. No government loans for GM. The Public Private Partnerships smack of fascism.
Not to mention... (Score:2, Funny)
Not to mention, Tesla makes cars that are fugly like most of the current offerings out there today.
not to mention (Score:2)
the fact that Tesla probably benefited greatly from that one billion dollar plus that GM spent.
Sorry, but the snide comment at the end of submission is just ignorant. First, if you looked at what the EV1 accomplished when it did it was nothing short of a great stride in electric cars. Coming to the numbers GM is at is something that Tesla hasn't gotten to and as such makes them immune to spare parts and related laws that GM is beholden too. So not only does GM have to gen up the tech they have to support
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Oil is going to run out folks. What are we going to do? Make a choice. Doesn't Honda make a hydrogen powered fuel cell to electric already for sale in California?
The way I see it is that we have to build new infrastructure if the batteries can't be made to work reasonably well. The first and only way to do it is to use something that is already proven. Hydrogen is already proven but probably made from fossil fuels now. Maybe embedding induction in the highways for electric transport on the interstates and b
Re:Not to mention... (Score:5, Insightful)
Uhh, the Roadster is built on a Lotus Elise body and frame. If you are looking at a $50+k road hugging high performance vehicle full of win and awesome, the Lotus Esprit screams it at 8000 RPMs. It is a sexy looking beast that will bruise your kidneys with it's exceptionally stiff and race worthy suspension. To call it an ugly car is purely delusional. It is functional. Exceptionally so. To the extent that the pureness of it's function becomes its beauty.
I'm pretty sure that of the entire market of vehicles on the market today, only a tiny portion of them can be viewed as at all resembling the vehicles from Lotus.
And the new sedan is much more in line with upper market full sized sedan styling. If you don't like it either, wait another 5 years, Tesla will either be unveiling more lines with more traditional appearances, or they will get bought out by a larger manufacturer that will rebuild the modern sedan using their technology.
-Rick
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I think you mis-read me. I think the Tesla looks
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The greatest thing about servicing a Tesla... There's barely any!
No oil to change. No spark plugs. No air filter. No oxygen sensors. No timing belts.
Sure, you still have to get the alignment checked, break pads replaced, and batteries recycled. But you have a couple of solid state plug and pull components, a 1-speed manual tranny, and a big honking AC motor. There's not a whole lot in there for the drive train that can break.
Right now my commute is almost all interstate speed, so a Turbo Diesel is my best b
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That is, of course, completely false. The Roadster is as much a conversion car as Nancy Pelosi is an evangelical. The percent of parts the Roadster shares with the Elise, by count or by mass, is in the single digits. It's the same basic layout and styling, and the body is built in the same factory, but it's a completely different car. It has to be, not only to extend performance, but also to deal with the radically different weight and volume distribution. And if anything, developing the battery pack i
Asymptotically approaching free (Score:2)
It's a loan not a bailout. (Score:5, Informative)
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It's a LOAN, not a bailout. You have to pay back loans.
The government is "giving" them the difference between the market interest rate, and the one the government would give them. If the market rate is 10%, and the government gives them the loan at 4%, the government is giving them the 6% difference as a handout. That's the equivalent of writing Tesla a check. It's a bailout.
Still not a bailout. (Score:2)
The US Government sets policies through money -- normally, in the form of tax incentives; if you do (x), we won't take the money back from you for doing it.
So yes, they're giving Tesla money -- but it's much closer to the current practices of tax law, but much less open-ended.
The government could've put out a grant with specifications to develop the cars for fleet vehicles, and then allowed them to sell it to the public (more like the original Hummer), or they could've used earmarks to find a way to fund th
Re:It's a loan not a bailout. (Score:5, Informative)
You're ultimately correct that the loan is not a bailout for Tesla, but I wanted to add a few clarifying points (which make Tesla look even better):
Much of the bailout for the Big Three was also in the form of loans. Where Tesla differs, however, is that Tesla actually has a chance of paying it back, while it's pure fantasy to believe GM and Chrysler could do the same. The former's bonds are currently yielding 220% [marketwatch.com] or thereabouts, meaning investors place a HUGE risk discount on loaning to GM. In contrast, Tesla's biggest "problem" is keeping up with demand.
Moreover, whatever the pretense of the "loans", including the one allegedly to help "retool" for more energy efficient cars, the fact of the matter is that the money for the Big Three is really going to pay off legacy costs that they were too stupid and short-sighted to plan for, *not* to improving technology, and especially not when you consider how close to collapse they are.
Now, in fairness, I don't think the government should be making these loans at all. (To the extent that the environment is a problem, that should be addressed by pricing environmental costs into fossil fuels, and then let the market do whatever's efficient given that price premium.) However, *if* it's going to make these loans, they should go to companies that have a realistic chance of accomplishing the stated goals of the loans. And so far, Tesla has been far more efficient at it, and has no legacy costs to pay off.
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It's a LOAN, not a bailout. You have to pay back loans. College students get them all the time, but you don't see people complaining about them.
If a corporation gets a loan, when it goes bankrupt the firm's remaining assets, if any, will be divided among its lenders, and they will often see only a small part of their total principal repaid.
On the other hand, guaranteed students loans survive personal bankruptcy under current law....
It is a bailout because if all they needed was a loan, and they had a real c
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Cheap college loans are the reason college prices have exploded over the years, as well as a large part of why college educations have become more and more worthless in practice.
Everything government touches it screws up. Remember this.
-Jeff
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It's a LOAN, not a bailout. You have to pay back loans. College students get them all the time, but you don't see people complaining about them.
Unless the corporation goes bankrupt. Nah, that'd never happen.
The end of a meme (Score:3, Funny)
Looks like whoever figured it out (sorry, I forget your handle) was right! They finally figured out the "???" step:
1. Have environmentally friendly idea
2. Realise it's too expensive and the market too small to keep you afloat
3. Get government hand-out
4. Profit!
Ah, very affordable... (Score:2, Insightful)
Yep, no longer do you have to be "very wealthy" to afford a Tesla automobile. They're charitably reaching out to the under-served "rather wealthy" with their $50,000 Model S. Why, that's only about 5 years' rent for me -- a perfect starter car for the less-fortunate members of your country club.
The Pope? How many divisions has he got? (Score:2)
Capitalism would work if you let it. (Score:5, Insightful)
Everyone complains about how capitalism is the downfall of our society and look at all the millions the CEOs are making, and all the money the Automakers are getting. Guess what folks. THIS ISN'T CAPITALISM.
Capitalism would let ALL of these companies fail. If you can't make a product that people want or need at an affordable price, then it's a product that should NOT BE MADE. If you are stupid enough to give a $300k loan to someone who makes $15/hour you should not be bailed out. If the goverment "TELLS YOU TO DO IT" then sorry, maybe you got the short end of the stick, but it's still no longer capitalism.
Re:Capitalism would work if you let it. (Score:5, Insightful)
Their replacements would do the same thing over and over ad-infinitum, so what are you really advocating? I've worked in industry long enough to know that people don't change unless their forced to.
Even if every one of these companies did crash and burn, the executives still walk away filthy rich with the middle and lower tiers completely fucked. I fail to see how this encourages good business practices for those sitting in these positions of power.
PS: Capitalism may be an ideal that people aspire to, but I can't think of anywhere more than tiny island nations (embezzlement) that practice laissez faire capitalism. If anything, its been propped up by cold war paranoia as the bastion of human accomplishment. Too bad there wasn't a cheesy 70's exaggeration movie to exemplify the possible problems. Oh wait, there's rollerball...
Re: (Score:2)
Re:Capitalism would work if you let it. (Score:5, Insightful)
Oh wait, that's what got us in this mess. Capitalism has a lot of wonderful qualities. But it needs to be regulated. Not too much, not too little...but simply screaming capitalism and how it is the solution to everything is naive at best...complete and utterly stupid given the current situation at worst.
Re:Capitalism would work if you let it. (Score:5, Insightful)
Um, no.
Capitalism is requiring 20% down and good credit and mortgage insurance to buy a home because the lending agency assumes the risk and has its head on the block. Government interference is setting up a couple of tax-supported agencies to facilitate "universal home ownership" (see "Community Reinvestment Act") and forcing banks to issue more and more sub-prime loans. Government interference is being warned that their mandated programs are going to blow up and Democrats saying everything is just fine [youtube.com].
Capitalism did NOT get us into this mess. Government fiddling in the economy did.
Please Don't Bring Up the CRA Again (Score:5, Informative)
Someone needs to write a bot to post a response every time someone blames the financial crisis on the CRA or in some other way largely on the GSE's.
"Federal Reserve Board data shows that:
* More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.
* Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.
* Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics."
- http://www.mcclatchydc.com/251/story/53802.html [mcclatchydc.com]
Here's a few other links:
http://www.ptmortgage.com/blog/2008/10/01/pointing-fingers-was-it-cra-and-minority-lending-that-caused-the-mortgage-mess/ [ptmortgage.com]
http://debatebothsides.com/showthread.php?t=73500 [debatebothsides.com]
http://www.prospect.org/cs/articles?article=did_liberals_cause_the_subprime_crisis [prospect.org]
http://www.frbsf.org/news/speeches/2008/0331.html [frbsf.org]
There is also a summary at Wikipedia [wikipedia.org].
Re:Capitalism would work if you let it. (Score:4, Informative)
Right. And would you like to provide an example of a purely capitalist society that has survived without subsidies and regulations?
Like it or not, you have to have rules to keep greed in check. This basic principle has been understood since people have been able to communicate. You have to have government spending to soften the natural cycles of the market, or else you end up in a boom and bust period that will end in catastrophe. You have to socialize or heavily regulate infrastructure or you will end up with companies that wield too much power, or costs that start denying a majority of citizens basic needs, which leads to revolutions or totalitarian dictatorships.
No amount of shouting will fix this reality. And if you want some more information, READ the Wealth of Nations. You'll discover that he supported regulation, taxing the wealthy, tariffs, protectionism, and laws against high interest rates. I know this would conflict with your ideology, but that's the problem with ideology. It's based on anecdotal evidence and similar nonsense.
VC bailout (Score:2)
And that's the story, folks.
one key difference (Score:2)
The gov't shouldn't loan money to start-ups unless it gets a share of the company... just like any other VC.
Real Economic Recovery? (Score:5, Insightful)
If people want a real economic recovery, then the government should reduce the risk of investing in new businesses, which create and sustain economic growth.
Of course all the progressives will say that "favors the rich" etc and so on to any suggestion that makes businesses succeed. Which means that success is punished, and failure is rewarded, as it is currently in this country.
Here is my plan.
1) Capital Gains taxes on long term investments will be 0%. Long term investment = 5 years or longer. No taxes on dividends on any investment property (real or stock or otherwise) held over 5 years.
2) Simplfy tax codes to a flat and progressive personal income tax of 10 and 20%, with a generous personal exemption, say first 15,000 of income. However, everyone pays a minimum tax $100(or whatever). Everyone has to send a tax into the government. The reason is people who don't pay any taxes don't care what it is spent on; "it isn't my money".
3) Lawsuit reform. People can sue for real damages (pain suffering etc) still, but limits will be placed so that it no longer a "get rich quick" scheme. Additionally, punitive damages do not go to the vicim, but rather to the state (victims fund), and there is a Lawyer cap fee of 5% on those.
4) Patent Reform which includes peer review process for patent applications. Reforms would require not only abstract but a working (fully funtional) form of the invention. Software, mathmatical and other such "process" applications are void.
Breaking the stranglehold of government interference into earning a livelyhood is paramount to fixing the systemic problems we have now.
However, I'm sure that there is someone somewhere that would protest these very simple and sure solutions because it is "unfair" to someone somewhere. Well guess what? NOT having these rules are unfair to those that want the government to get out of the way so we can actually get stuff done.
There is something wrong when the government makes more on everything than the businesses providing the services and products being taxed (NewYork I'm looking at you!!!).
Four very simple things to do that would free up businesses to make products and services without having to look over their shoulder every two seconds to see some government or lawyer coming at them for something.
Re: (Score:2)
If people want a real economic recovery, then the government should reduce the risk of investing in new businesses, which create and sustain economic growth.
Now if only we can get the GOP and the Democrats to buy into this....
Anti-Politics (Score:5, Insightful)
I agree with some ideas that you have, but you seem to suffer from anti-governmental propaganda.
No one seems to understand that this huge bust we're in is fully due to a relaxation of government regulation. If there was a simple rule that said companies had to provide transparency to these credit default swaps, or face legal consequences for lying about it, it could have been avoided. If the rules separating banks, insurance companies, and investment banks hadn't been repealed, this would be a much smaller problem. If mortgages still had to be held by the originating bank, there would be no problem.
But this isn't surprising, it's based on simple market principle. Capital investments flooded into financial markets because there are no rules against high interest rates, and the return for building a factory is nothing compared to that of selling a mortgage to an unqualified lender, and then selling that debt to someone else. No one is building anything real because they are addicted to 5-10% yearly returns after the first year they invested. World financial markets might as well be a trillion dollar casino.
A lack of a accountability is the real problem. Accountability only comes into play when there are easy to understand rules, and consistent punishment for breaking them. So, I agree with you on the simplification of tax code, and patent reform.
As for a lack of Capital gains taxes, I'm not so sure. I'd get on board with a carrot and stick program (must exist entirely in the US, must have a certain amount of company benefits, etc), but I doubt it could be written without any loopholes.
Lawyer reform - this one is a bit trickier. I think the "loser pays" option is a good idea, with one exception: a person can apply for exemption to this rule by a jury, with the provision that any punitive damages will not go to the prosecution. This would allow justice to be served to larger corporations who have legal fees that could drown a small country.
But, as one of those "progressives" I don't think removing taxes works, because we've tried that already. How about removing incentives for ripping people off, and implementing tested and successful financial regulations that create a better atmosphere for long term investment? Take a look at the Canadian banking system. Proof that regulations work, and the market isn't always right.
Fleet of presidential helicopters, but not cars? (Score:2)
Re: (Score:2)
Why is it that when there's funding for a new fleet of presidential cars with increased fuel efficiency from Tesla---mind you, the Secret Service has been getting a new fleet of cars every year already, weirdly---on the basis that buying from them will ease mass production costs, the Republicans call it "massive wasteful earmark pork barrel spending", but when funding fo
Difference? (Score:2)
[...]waste of taxpayer money that would only benefit the wealthy and bailout VCs who'd sunk money into the money-losing company.[...]
And that different from the Wall Street bailout exactly how?
Oh, if we help out Tesla we might actually get an innovative product to buy in the end, whereas with Wall Street we just get empty promises of the whole economy not collapsing as long as we prop them up.
Right.
Re: (Score:3, Insightful)
Oh, if we help out Tesla we might actually get an innovative product to buy in the end
What's so innovative about a $50,000 electric car? The Volt seems far more useful in the real world and that's looking at a price around $40,000 even with GM's enormous benefits costs folded into the costs.
Real Loosers (Score:2)
And the real losers in this bailout (besides tax payers) are all the other companies that are managing to make affordable electric/hybrid vehicles today without this subsidy. Now these companies who focused on practical compromises rather than flash are at a financial disadvantage to Tesla. Way to go Congress.
Tesla CFO Agrees (Score:2)
Tesla's CFO [imnotboredanymore.com] agrees
Great (Score:3, Insightful)
Re:Rich peoples' toys (Score:4, Insightful)
No, not really. Not for a cutting edge...early adopter technology no. I mean, you see lots of Joe sixpacks getting LCD HDTV's today, which a few years ago, were much too $$$ for them, and only for the 'rich'.
You gotta start somewhere man...no, not everyone can afford the first things out the door. It takes time, those early adopters, that can afford them...pave the way for Joe and Sall Sixpack later down the road.
Geez, for some reason....there seems to be an almost inherit distaste for anyone with any type of wealth in this country these days. You almost seem to feel some level of vitriol anytime someone mentions people who make over $100K/yr and can afford something slightly 'nicer' than the people living in the projects.
Are we at the beginning of a race to the bottom...where no one can have an advantage no matter how hard they try?
Re: (Score:3, Funny)
Geez, for some reason....there seems to be an almost inherit distaste for anyone with any type of wealth in this country these days. You almost seem to feel some level of vitriol anytime someone mentions people who make over $100K/yr and can afford something slightly 'nicer' than the people living in the projects.
Are we at the beginning of a race to the bottom...where no one can have an advantage no matter how hard they try?
Nah, that's just us folks on slashdot. Those really rich folks have their own privat
Re: (Score:2)
Have the egalitarians won? I don't think so, there's just a lot of bad blood considering the current economic climate.
Re:Rich peoples' toys (Score:5, Insightful)
Geez, for some reason....there seems to be an almost inherit distaste for anyone with any type of wealth in this country these days. You almost seem to feel some level of vitriol anytime someone mentions people who make over $100K/yr and can afford something slightly 'nicer' than the people living in the projects.
The problem started when some people stopped believing that hard work, dedication, and pride in one's work are the way to get ahead in life. In other words, you earned your riches. Now what seems to be important is that you make as much money as quickly as possible with no regard to ethics, morals, or who you screw over.
I believe this is the reason people are so up in arms and rightfully so.
Re: (Score:3)
Elise: The Roadster shares fewer parts with the Elise than your average Lamborghini shares with your average Audi.
ACP: Tesla licenses the patents on the ACP drivetrain (AC-150), but they've extensively modified it in the process of creating even their first version, let alone Powertrain 1.5. Race an E-Box against a Roadster if you doubt it and think they're the same thing.
Li-ion 18650s: Tesla didn't invent the batteries, of course, but virtually no EV manufacturers do, either. They did, however, do some p
Re:Rich peoples' toys (Score:5, Insightful)
So... in your view, products should never be researched and manufactured until your average bear can afford them?
That would be really upsetting news to people who made the first... oh, computers... televisions... CD players... PMPs... DSLRs... video cameras... multichannel stereos... general coverage receivers... GPS units... satellite television receivers...
You know. Things that come under the heading of "stuff that we've never had before because it requires high technology."
So I have a question. If these things aren't initially developed for people with deeper pockets, then where is the money to develop them supposed to come from? Over to you.
Re: (Score:3, Insightful)
A small nitpick here, but these cars aren't targeted at the very wealthy. Rather, they're targeted at hyper-consumers. In the majority of cases the two are not synonymous. The same could be applied to your comment about rich people. Nobody gets rich writing checks.
Re: (Score:3, Interesting)
Executive summary: Oh. My. God.
Items missing: Three point harness. Leg restraints. Sufficient handholds for passenger. AI software to maintain directional control during GLOC. Erica Lane's voice saying "pull up, pull up."
Re: (Score:3, Informative)
Re: (Score:3, Insightful)
Sorry, the charger issue is fixed by trickle-charging not just your car overnight, but also a high-current, high-capacity battery pack in the garage (li-poly? NiMH? Lithium-iron-phosphate? Lithium-magnesium phosphate? Silver-zinc? Lead-acid? Anything but lithium-cobalt, basically) that can deliver the thick, chewy amps needed to fast-charge the car battery.
So once you add that to the cost, this '$50,000 car' will be an even worse deal than it currently appears.
Re: (Score:2)
battery swapping is the key.
it can work for scooters as well as big cars too.
what is needed is INVESTMENT (and belief) in a service station like swap setup where you pull in, your old batt is removed and a new charged one is installed. it happens at supermarkets for propane for home barbecues. it CAN happen if american wanted to INVEST in ourselves.
its oil free. it IS an investment in ourselves. and it would be a way to defer the 'slow charging problem'.
will it happen? no. I'm soured by the greed of t
Re:$50k *after* subsidies (Score:4, Interesting)
With government monies, does that mean we will get some openness into their car's technology or other aspects such as cost of goods sold, cost of manufacturing and other details in the breakdown? Is it possible that the car actually costs nearly $50k? What about other factors of production that could later lead to lower-cost production cars? If they sell the first models for higher prices, doesn't that then allow them to build larger facilities and cheaper cars by volume? Furthermore, since the parts used in creating the cars will likely be sourced from outside the company, there will likely be parts that could be used by other makers of the same or similar technologies that will compete with Tesla and therefore also serve to drive costs down.
I think the beginnings of new things are ALWAYS ridiculously high priced. Does anyone recall the first microwave ovens? Not only were they crappy, but they were QUITE expensive.
I say let the electric car get made and see where things go. If we never try, it will never happen.
Re: (Score:3, Insightful)
"Electric cars just can't charge fast enough to be as practical as regular cars, due to limitations of the grid, and this has nothing to do with Tesla's engineering."
Why do you need fast charging for local trips? If most or all of your trips are local, who cares?
Most people like unlimited range (with quick fueling) for its potential rather than actual need-hence cars like the Volt.
Re:$50,000? Affordable (Score:5, Informative)
I'm sorry, but a $50,000 car is STILL just for the wealthy.
While I agree that only the wealthy can afford a Model S, Tesla is the only company that has demonstrated a viable business plan for producing electric cars. As they continue to produce them, they expect the price to come down.
they would still need a different vehicle for taking the kids to soccer games, camping, etc. where more passenger and cargo space are needed.
Actually, they wouldn't. The Model S seats 7, believe it or not. The electric drive train provides more space for storage. There is room for cargo under the hood (bonnet) because that space isn't needed for an engine.
Re: (Score:2)
Tesla is the only company that has demonstrated a viable business plan for producing electric cars.
If they had a viable business plan, they wouldn't be demanding that the taxpayer bail them out, would they?
Re:$50,000? Affordable (Score:5, Informative)
They're not asking to be bailed out. If you didn't count the money they're spending on developing the Model S, Telsa would be profitable today -- and they're still scaling up Roadster production. They're asking for loans to speed up the creation of *new models* that are more affordable to a mass market. They don't need any sort of subsidy to keep on doing what they're already doing in making Roadsters.
re: Tesla and loans (Score:3, Informative)
Fine, but my issue with this is: It's NOT government's job to issue business loans!
We've gotten into that mentality with all the "exceptions" created like Fannie Mae and Sallie Mae, but look where those have gotten us? Skyrocketing costs for college tuition and the housing crisis!
If Tesla Motors wants a loan, they should pursue normal channels of venture capital or a bank loan. If the current economy makes those too difficult? I'm sorry about that -- but that's no excuse for trying to bypass the current
Re: (Score:2)
If they had a viable business plan, they wouldn't be demanding that the taxpayer bail them out, would they?
In this economic climate, it's difficult to say. So far, we have bailed out companies that appear less viable [wikipedia.org]. It seems like Tesla is guilty of being a small upstart in difficult times, not of having a poor business plan.
Re: (Score:2)
Read the thing again...they're asking for a loan, to be repaid...not a bailout.
Re: (Score:2, Insightful)
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What a distortion. I have to give Tesla kudos, though, for managing to give people the impression that there's only a $10k price difference between the two without outright lying ;)
First off, the Volt is not "going to be $40k". GM has repeatedly stated that they don't know how much it's going to cost. The price estimates have ranged from $25k to $45k. Most recently, they've generally ranged in the $30-40k range, more often toward the upper end. These numbers are pre-tax credit. The tax credit is $7500