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GM and Fiat Chrysler Unmasked as Tesla’s Source of Cash
- est31 7y agoNot the first time an established car manufacturer prevents Tesla from dying. Ten years ago, in 2009, Daimler Benz invested about 50 million USD into Tesla for a 9% stake. This saved them. Not my words, but Elon's: https://www2.greencarreports.com/news/1074375_elon-musk-daimler-saved-tesla-doe-loans-a-bad-idea https://www2.greencarreports.com/news/1074375_elon-musk-daim...
- TomMarius 7y agoDaimler-Benz itself was created to prevent imminent death of two automobile makers
- fredgrott 7y agodid not prevent death,,US took over retirement plans of two automakers..that is death right there no matter what the remains become as it means you have more retirees than workers..ie firm decline
- adolph 7y agoThe poster was referring to a different time: Because of the post World War One German economic crisis, DMG merged in 1926 with Benz & Cie., becoming Daimler-Benz and adopting Mercedes-Benz as its automobile trademark. https://en.wikipedia.org/wiki/Daimler_Motoren_Gesellschaft https://en.wikipedia.org/wiki/Daimler_Motoren_Gesellschaft
- TomMarius 7y agoIndeed I was
- Sacho 7y ago> They also represent the first acknowledgments from carmakers that they’re turning to Tesla for help to comply with intensifying U.S. environmental regulations. I don't know how you manage to spin the article the opposite way. If anything is bailing out Tesla, it's the US govt providing the credits, not car manufacturers.
- nathan_long 7y agoEstablished car makers have established themselves so well by not paying for the health and environmental damage their products cause. We have all subsidized them by paying to deal with their mess (in cash and in consequences). To frame this as if GM has paid own its way and made its fortune without help, and now is benevolently helping Tesla, is misleading.
- wongarsu 7y ago> they reached agreements to buy federal greenhouse gas credits from Tesla. In other words it's not much of a statement about Tesla, it's just a credit system working as intended. Tesla has credits left over because they don't sell ICE cars, GM predicts that if the next president is Democrat they might need more credits so they buy now while they are cheap.
- thenaturalist 7y agoGiven that Tesla can supply those credits owing to its role as the first car producer to massively push EV over ICE technology and hence not produce common costs (CO2 emissions), this is a statement about Tesla and its position in the car industry in my book. It's not a technological breakthrough, but in a world where common costs will be more factored into the balance sheets of those who create them, the fact that Tesla can be on the sell side of this and the trend to further quantify those costs might position them well.
- yostrovs 7y agoIt's not a technological achievement. It's a political one, as the middle class gets to subsidize the autopilot of the upper class, while the upper class gets to feel smug as though it's saving the world.
- codedokode 7y agoOr you can look from the other side: people who buy cars that pollute air pay for the development of better cars.
- benj111 7y agoThe whole point is it's not a subsidy, it's properly assigning costs. Up until now ICE manufacturers and users havent being paying for the full costs of that technology, everyone has been subsidising them, this is designed to cancel that subsidy out.
- 7y ago
- matjazdrolc 7y agoWasn't this reported two months ago? https://www.theverge.com/2019/4/8/18300393/tesla-fiat-chrysler-credits-european-union-emissions-fines https://www.theverge.com/2019/4/8/18300393/tesla-fiat-chrysl...
- sanxiyn 7y agoThat was EU credit, this is US credit.
- _pmf_ 7y agoProbably gets them some leverage for cheap takeover when Tesla collapses.
- Theodores 7y agoSomething is not working with this carbon credit market, the article says demand for electric cars is not there so the auto makers can't generate their own credits. Yet people who are into EV cars view the big three as well as the German marques as not even trying. I bet that selling the credits was never in the Tesla business plan. But it is now!
- tyfon 7y agoIt sounds like the cost of the credits is not high enough to make a real dent. Another effective way of doing this is adding the cost of pollution into the price of the car as tax making ICE expensive and electric cheap. That is done here and the demand is very high. ICEs generally have > 100% tax.
- fit2rule 7y ago>the article says demand for electric cars is not there I'd see it more as, the demand for electric utility vehicles and industrial transportation systems (truck, etc.) is so great that the demand for personal EV transportation cannot supplant the economies of maintaining an ICE production line. But, as the article explains this may change in the close to near future, and indeed the technology to supplant the former segments of transportation is definitely on the horizon. Take this with a grain of salt, but I happen to know that automobile clubs around the world expect that within 5 years, the automotive industry will be radically different to what it is today - they, too, are hedging their bets, and investing in social-sharing technology for the clubs to be promoting when the tech, and consumer expectations around personal transportation, inevitably changes.
- 7y ago
- carlsborg 7y ago~$200M/year, and it isn't a strategic cash infusion, they have to. "Tesla has generated almost $2 billion in revenue from selling regulatory credits since 2010" "If [other car-] manufacturers don’t sell enough non-polluting vehicles, they have to purchase credits from competitors like Tesla to make up the difference." How much is that relatively? TLSA 2018 revenue: $21B net income: -$1B
- lazyjones 7y ago> ~$200M/year, and it isn't a strategic cash infusion, they have to. $420m last year and rising steadily.
- marvin 7y agoTesla has received more in regulatory credit revenue alone, than their entire market cap at the time of the IPO. Of course the company has grown massively since then, both in market cap and revenue, but it's worth stating just to put this into perspective.
- vectorEQ 7y agobeing able to buy yourself out of regulations... priceless.
- TeMPOraL 7y agoThat's the system working as intended - it forces companies to internalize the costs that previously were externalized.
- Double_a_92 7y agoThat's the point of that regulation. Either you do get your things straight, or you are forced to support companies that already do.
- wil421 7y agoEnvironmental Credits seem more like a scheme than anything else. It sounds like politicians giving lip service to the people while keeping lobbyists happy. Regardless, it’s nice to see GM and FCA are benefiting Tesla is some ways. It would be really interested to see a powered by Tesla GM/FCA car. Tesla provides engines and battery and the other carmaker makes a car around it. A partnership with a huge car company could help Tesla with production issues and provide a cash boost.
- robert_foss 7y agoIt is a scheme, that internalizes what otherwise would have been an external cost (environmental impact) for GM & Fiat (and the other manufacturers). This should provide them at least some incentive to improve their environmental impact.
- jumbopapa 7y agoI would say that cap and trade is a fairly popular solution to curbing externalities in the field of economics.
- adrianN 7y agoIf the caps would be reduced by meaningful amounts every year so that we reach carbon neutrality in fifteen years or so that would be true. But nobody is doing that.
- mac01021 7y agoCap & Trade is weird. How are the caps set, based on what? And the system doesn't even reimburse the people who bear the externalized cost. If you want to address an externality, just address it directly by fee & dividend.
- Double_a_92 7y agoA scheme that is working as intended. Producers of pollution are supporting (or almost forced to support)greener competitors.
- zaroth 7y ago> GM’s credit purchases illustrate how challenging the U.S. fuel efficiency requirements are getting, even for automakers that are adding more zero-emission vehicles to their lineup. Hardly. It mostly illustrates how many trucks and SUVs they sell.
- village-idiot 7y agoIt’s not hard to make those fuel efficient, it’s hard to make them fuel efficient cheaply all while maintaining the performance that customers expect.
- 8draco8 7y agoIt's hard to convince customers that they don't need huge SUV or pickup truck to drive solo to work in the office. On top of that there is clear, design trend especially in pickup truck world to have biggest, most vertical grill that is possible. Moving such wall trough the air at highway speed is far from efficient. No matter how badly Fiat wants to sell cars like small and efficient Fiat 500, Tipo, Alfa Romeo Giulia etc. that can be sleek and good for environment, in USA they will mostly sell huge RAMs, Jeeps and muscle cars.
- Spooky23 7y agoWhen you sell a work truck for $25k and as much as $60k for a fully equipped fancypants truck, you aren't going to be very motivated to convince anyone of anything other than buying more fancy trucks.
- ajmarsh 7y agoSome of these trucks are being driven solo by people who live on an onion farm just FYI. Also, my truck gets better mileage than a Giulia. I live in the midwest and sure there are guys who don't need a truck but most of us do.
- 8draco8 7y agoThat's why I specifically said about office job. If you need your truck for work, haulin onions or for your hobby like mountain bike etc. then that's great, this is the actual truck for you but there is huge amount of people that are using them to get groceries at most. Another thing is, why you need to buy that, huge RAM, wouldn't just a normal height car like australian style pickups aka UTEs (kind of modern El Camino) be sufficient to get your onions/mountain bike to your destination? I don't know the truck you are driving but base model of F150 have a highway fuel consumption of 26 US mpg, base Gulia have 39 US mpg, that's a bit of a difference.
- jonplackett 7y agoSo does this mean all those zero emission Tesla’s are actually generating lots of emissions but just via another manufacturer?
- rcMgD2BwE72F 7y agoNo.
- dwrowe 7y agoI’d assume it’s an “offset” right? So not making things “better” - just not as “bad”
- adventured 7y agoIt's making things better by directly funding the killing of the ICE vehicle industry. That money is coming out of the pockets of the ICE automakers and being injected into Tesla, which is actively trying to replace the ICE approach. It's helping to enable the build-up of EVs and replacement of the ICE auto industry. It has a rather considerable roll-on effect when you consider the sprawling consequences, such as helping to fund Tesla's ability to build a global charging network which can then enable it to more easily appeal to consumers to sell more EVs and on it goes in dozens of other ways.
- dwrowe 7y agoMaybe, I haven't reviewed the numbers in detail - but the need for GM/others to purchase the credits at the rate they do, enables them to continue pushing the ICE autos - possibly increasing the overall market supply, which in turn is just as bad / worse? Something to watch, for sure.
- gwbas1c 7y agoNo, it means that the polluters end up subsidizing development of cleaner vehicles. Otherwise, Teslas would be more expensive.
- DeonPenny 7y ago
- phyzome 7y agoBloomberg revealing another Big Secret without citing sources? Why should I believe them?
- jake_the_third 7y agoI also have difficulty believing anything bloomberg puts out after what had happened. With all the independent investigations and the lack evidence found, I'm baffled that they still haven't admitted their mistake and issued a redaction.
- gamblor956 7y agoWhat would they issue a retraction for? Their Huawei article has been borne out by subsequent developments.
- mikestew 7y agoSuperMicro, not Huawei. A story for which I've not seen one single shred of not-flacid evidence.
- kombucha11 7y agoI'm unaware of this scandal care to elaborate?
- phyzome 7y agoBloomberg unleashed this bombshell of a story about a supply chain attack on Supermicro, which supplies servers to some big-name companies. Except... literally everyone else says it didn't happen, and didn't make sense in the first place. https://hackaday.com/2019/05/14/what-happened-with-supermicro/ https://hackaday.com/2019/05/14/what-happened-with-supermicr... Bloomberg doubled down, but still didn't actually provide any evidence, and there the matter has lain.
- exabrial 7y agoTesla sells invisible objects. Elon Musk is truly brilliant.
- matt4077 7y agoI'm continually baffled by wide-spread inability of the software(!)/tech crowd here and elsewhere to grasp the idea of non-physical concepts having meaning.