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This is based on completely the wrong premise, Tesla is an unsubsidized car company. Even if the Solar City deal goes through and the value goes to $0 within a

by loourr 10y ago

This is based on completely the wrong premise, Tesla is an unsubsidized car company. Even if the Solar City deal goes through and the value goes to $0 within a year Tesla will still be a great thriving company. Not only is Tesla a shinning example of American manufacturing (a main Trump tenant), they create cars that are better and more performant then competing gasoline cars, they do it at much higher margins. Tesla is hopping to produce about 500k cars within 2 years while the average automobile manufacture produces about 10MM cars per year. And they plan to do it at a 20-30% margin. Even if gas prices go down by 75% they would then only match the price of fueling a Tesla, which in itself would be an incredible feat given how subsidized oil already is.

dcosson 10y ago
> Not only is Tesla a shinning example of American manufacturing (a main Trump tenant) Except that they use a ton of automation. I'm very curious how this will play out under Trump. Because even if he does all the things he's been talking about (pulling out of trade deals and raising tariffs) and even if it has the intended short-term effect of bringing more manufacturing back to America, there will be a lot of automation and it probably won't look very much like it did in the pre-globalization good-old days that his base wants to revert to. What then? They'll need somewhere other than trade deals to point the blame.
- loourr 10y ago
  That's a good point though they still employ a lot of people. It'll be interesting when people start trying to deal with the job loss from automation. I'm not sure how you can practically restrict the use of software and robots.
botty_throwaway 10y ago
Sure, oil is subsidized. But it's disingenuous to claim Tesla doesn't play the regulation arbitrage game either. Not only is demand for Tesla's cars _partially_ sustained through consumer tax rebates, but Tesla's _profitability_ has historically relied on selling ZEV credits. Both of these factors may be cut short by the changing political tides now that the [federal] executive, legislative, and (soon) judicial branches will be majority led by a party that has a rough consensus on switching priorities from the past decade or so. I'm not trying to antagonize against Tesla specifically, nor prop up the virtues of a truly ecologically-damaging industry that plays by a similar rulebook, but anytime a company's business model relies on a certain political climate rather than _solely_ on efficiency gains through technological innovation, the door swings both ways given a long enough time scale. Cue discussion about how innovative R&D is not possible without initial government investment, especially against already subsidized industries that don't have to factor in tremendous externalities... but that's a more politically subjective debate compared to just stating how I don't agree with the claim of Tesla being 'unsubsidized.'
- loourr 10y ago
  Tax credits will be all exhausted by the time they release the model 3 since it applies for only so many vehicles per manufacturer. Also the ZEV credits are being sold for less then $0.50 on the dollar if they can find a buyer at all since they don't produce polluting cars themselves (per Teslas latest earnings call) and contribute negligibly to their bottom line. Not to say that Subsidies haven't helped to get Tesla to where they are, only to say they won't be necessary moving forward.

by loourr 10y ago

dcosson 10y ago

> Not only is Tesla a shinning example of American manufacturing (a main Trump tenant) Except that they use a ton of automation. I'm very curious how this will play out under Trump. Because even if he does all the things he's been talking about (pulling out of trade deals and raising tariffs) and even if it has the intended short-term effect of bringing more manufacturing back to America, there will be a lot of automation and it probably won't look very much like it did in the pre-globalization good-old days that his base wants to revert to. What then? They'll need somewhere other than trade deals to point the blame.

loourr 10y ago
That's a good point though they still employ a lot of people. It'll be interesting when people start trying to deal with the job loss from automation. I'm not sure how you can practically restrict the use of software and robots.

botty_throwaway 10y ago

Sure, oil is subsidized. But it's disingenuous to claim Tesla doesn't play the regulation arbitrage game either. Not only is demand for Tesla's cars _partially_ sustained through consumer tax rebates, but Tesla's _profitability_ has historically relied on selling ZEV credits. Both of these factors may be cut short by the changing political tides now that the [federal] executive, legislative, and (soon) judicial branches will be majority led by a party that has a rough consensus on switching priorities from the past decade or so. I'm not trying to antagonize against Tesla specifically, nor prop up the virtues of a truly ecologically-damaging industry that plays by a similar rulebook, but anytime a company's business model relies on a certain political climate rather than _solely_ on efficiency gains through technological innovation, the door swings both ways given a long enough time scale. Cue discussion about how innovative R&D is not possible without initial government investment, especially against already subsidized industries that don't have to factor in tremendous externalities... but that's a more politically subjective debate compared to just stating how I don't agree with the claim of Tesla being 'unsubsidized.'

loourr 10y ago
Tax credits will be all exhausted by the time they release the model 3 since it applies for only so many vehicles per manufacturer. Also the ZEV credits are being sold for less then $0.50 on the dollar if they can find a buyer at all since they don't produce polluting cars themselves (per Teslas latest earnings call) and contribute negligibly to their bottom line. Not to say that Subsidies haven't helped to get Tesla to where they are, only to say they won't be necessary moving forward.