4 ms·
The image here of all the states falling over themselves to impress the popular kid seems straight out middle school, and I don't see much for the supporters of
by cmsmith 12y ago
The image here of all the states falling over themselves to impress the popular kid seems straight out middle school, and I don't see much for the supporters of Tesla or the state to be proud of. The fact is that if all of these states had just told Tesla to screw off and not offered anything, the factory would be built in the most economically efficient spot in the US, boost the national economy, and provide jobs. And if Nevada didn't win this factory, it would win the next one - without paying $1.4B to do it.
Instead, Tesla used their outsize market influence to shake down the state for as much cash as possible. In the absence of these payoffs, states would have to compete on 'business-friendliness' by changing their tax structure or building permit process - improvements which would be good for all businesses. Instead we have one set of rules for those at the top of the pyramid and one set for everyone else.
- raldi 12y agoMore likely, they would end up buying from a Chinese supplier, and the US would miss out on all that business. And two decades from now, China would be the center of the electric car world, instead of the western US. And perhaps the extra expense and inefficiency of overseas manufacturing would've stopped the electric car industry from getting off the ground at all.
- georgeoliver 12y agoDo you have an idea of the economics of US vs. foreign production for a factory like this? I've been searching around a bit this morning but the articles don't discuss that.
- kenrikm 12y agoNot shipping heavy batteries halfway around the world should help. But labor costs will be significantly higher in the US. Not sure if it'll come out to a wash or not.
- raldi 12y agoIndeed -- if the batteries were being made in China, perhaps they'd start manufacturing the cars there too.
- cmsmith 12y agoMusk has said that the incentives add up to 5% of the short term investments and 1% of the long term costs of actually running the factory. I could see relocating the factory from Texas to Nevada for that kind of savings, but moving it to China seems harder to imagine.
- jacquesm 12y agoIn that case the savings would probably be substantially larger. Of course then he'd have to deal with import tariffs.
- waterlesscloud 12y agoOr maybe the factory just wouldn't have been an economically viable project and wouldn't have happened at all.
- eli_gottlieb 12y agoWell then it shouldn't have happened at all.
- grecy 12y agoThere are some projects that are not economically viable, but they absolutely need to be happening. The Apollo missions, public healthcare (in developed countries != USA), the entire US Interstate system, etc. etc. etc. Making money is not the only reason to do something.
- eli_gottlieb 12y agoSure. And those worthy projects are undertaken at public expense by the state, with public ownership. They are not to be undertaken by pouring public money into private coffers as arbitrary subsidies.
- lotsofmangos 12y agoYou'll be in favour of shutting down the army then? Short of pillage, they are never going to break even.
- eli_gottlieb 12y agoSee other comment. In short: public projects should be public, and subsidizing a private business is not a public project.
- lotsofmangos 12y agoOk, I get you. To correct the previous metaphor, so from that position subsidizing the army is ok, however the army should develop all of its weapons in-house apart from what it can buy on the open market without offering any subsidies. Yes?
- cjf4 12y agoSounds pretty similar to what the NFL does anytime one of their stadiums turns 15. Some have argued their should be some sort of law barring states from doing this, due to the zero sum nature at the national level. I just don't see how you could write a law without all sorts of undesirable side effects.
- danbruc 12y agoJust don't allow exceptions and treat everybody the same when it comes to taxation.
- fidotron 12y agoThe EU does have prohibitions on most aspects of state support of private enterprises, with a couple of notable exceptions, particularly the "cultural test". This has led to migration out of the EU for sectors which have tax breaks elsewhere (most visibly in techland this is videogames to Canada). Having lived on both sides of this I've concluded the EU model is the right one. The one real exception becomes when an aggressive external party tries to use state backed product dumping to displace all other existing market participants before jacking the price back up again. In those cases you will need punitive tariffs on imports, but that should be the exception and not the rule.
- blumkvist 12y agoThis is nonsense. Agriculture is heavily subsidized in the EU. Companies in the EU can apply for grants and funding to improve competitiveness, stimulate R&D. The EU also has programs which lets local governments allocate the money in what they deem "key sectors in the local economy". Member states also recieve funding for community and area development. Example of that is free (or subsidized) insulation.