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Tesla's primary method of financing is through debt and equity, not through any government subsidy. Yes they get ZEV credits, but the revenue from those pales

Tesla's primary method of financing is through debt and equity, not through any government subsidy. Yes they get ZEV credits, but the revenue from those pales in comparison to their sales, loans, and stock offerings. Not to mention that most of the traditional car manufacturers in America received huge government bailouts to stay afloat in 2008, so even if you slight Tesla for receiving a loan (which they repaid early with interest) they are still on equal footing with other manufacturers.

jjeaff 9y ago
I think it would be rather large if you count the electric subsidies that states and feds pay for Tesla cars and solar panels. Tesla themselves generally provides their price comparison or total cost of ownership figures including the government subsidies.
- mdorazio 9y ago
  Was going to say exactly this. Without the $7500 tax credit, the Model 3 immediately shoots out of reach for a large number of people who want to buy one. Same for solar roofs - without the tax credits, it takes way longer to pay for panels than most people are willing to wait. All the Elon companies depend heavily on government subsidies, whether corporate or consumer, for their success.
danso 9y ago
Yes, you're right, it is unfair to not consider the many subsidies that entrenched companies (automotive or otherwise) have received and currently receive. If the LAT were to count up the ones for GM using the same standard they did for Tesla, it may very well end up being a similar magnitude of subsidy. So I suppose the main thing GM and such companies have going for them is that they have a track record of being profitable and they would likely have a stronger chance of remaining profitable sans subsidies than Tesla. But I realize that argument is basically begging the question, if not an outright tautology (Wealthy companies are wealthy). Furthermore, it's not at all destined that if Tesla got into a failing situation that U.S. politicians would feel an obligation to keep pumping them up, or to bail them out, especially in an Trump administration. And Tesla can hardly be blamed for taking advantage of publicized subsidies, it's no less sneaky than the way entrenched companies have taken advantage of those subsidies for decades, nevermind tax loopholes and shelters. So I'll weaken my argument to this: Tesla's inability to make money is not, as the OP suggests, a non-issue for Americans. Tesla may be no different than any company in using tax credits and subsidies, but the fact remains that if Tesla fails -- a much more likely situation in terms of the near future than it is with most of the other car companies -- those tax credits/subsidies will have been greatly wasted. Because think about it: if Musk could effectively deliver on his technology ambitions -- I don't mean prototypes, but implementation and successful production -- in what likely economic scenario would a good-acting Tesla continue to be bleeding money? In other words, at some point -- not this year, maybe not in the next 5 years, but also not never -- the lack of profit might be a signal that there is something fundamentally wrong with Tesla, either in its goals or in its internal workings. And claiming to have or actually having grand, life-improving ambitions means jack shit. Would the OP have written this kind of piece of Theranos?
- mehrdada 9y ago
  > those tax credits/subsidies will have been greatly wasted No, for every ZEV credit or tax credit to the consumer, they sold a non-polluting electric car to the market. Even if the company disappears today, the cars will remain on the road.
  - taobility 9y ago
    even the battery doesn't work?

jjeaff 9y ago

I think it would be rather large if you count the electric subsidies that states and feds pay for Tesla cars and solar panels. Tesla themselves generally provides their price comparison or total cost of ownership figures including the government subsidies.

mdorazio 9y ago
Was going to say exactly this. Without the $7500 tax credit, the Model 3 immediately shoots out of reach for a large number of people who want to buy one. Same for solar roofs - without the tax credits, it takes way longer to pay for panels than most people are willing to wait. All the Elon companies depend heavily on government subsidies, whether corporate or consumer, for their success.

danso 9y ago

Yes, you're right, it is unfair to not consider the many subsidies that entrenched companies (automotive or otherwise) have received and currently receive. If the LAT were to count up the ones for GM using the same standard they did for Tesla, it may very well end up being a similar magnitude of subsidy. So I suppose the main thing GM and such companies have going for them is that they have a track record of being profitable and they would likely have a stronger chance of remaining profitable sans subsidies than Tesla. But I realize that argument is basically begging the question, if not an outright tautology (Wealthy companies are wealthy). Furthermore, it's not at all destined that if Tesla got into a failing situation that U.S. politicians would feel an obligation to keep pumping them up, or to bail them out, especially in an Trump administration. And Tesla can hardly be blamed for taking advantage of publicized subsidies, it's no less sneaky than the way entrenched companies have taken advantage of those subsidies for decades, nevermind tax loopholes and shelters. So I'll weaken my argument to this: Tesla's inability to make money is not, as the OP suggests, a non-issue for Americans. Tesla may be no different than any company in using tax credits and subsidies, but the fact remains that if Tesla fails -- a much more likely situation in terms of the near future than it is with most of the other car companies -- those tax credits/subsidies will have been greatly wasted. Because think about it: if Musk could effectively deliver on his technology ambitions -- I don't mean prototypes, but implementation and successful production -- in what likely economic scenario would a good-acting Tesla continue to be bleeding money? In other words, at some point -- not this year, maybe not in the next 5 years, but also not never -- the lack of profit might be a signal that there is something fundamentally wrong with Tesla, either in its goals or in its internal workings. And claiming to have or actually having grand, life-improving ambitions means jack shit. Would the OP have written this kind of piece of Theranos?

mehrdada 9y ago
> those tax credits/subsidies will have been greatly wasted No, for every ZEV credit or tax credit to the consumer, they sold a non-polluting electric car to the market. Even if the company disappears today, the cars will remain on the road.
- taobility 9y ago
  even the battery doesn't work?