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Everyone wants a bailout—how about Tesla?December 2, 2008Do you favor a bailout for the Big Three auto makers? How about for a little fourth? That would be Tesla Motors, which has asked for $400 million of a $25 billion loan package—the Advanced Technology Vehicle Manufacturing Incentive Program (ATVM)—for the auto industry that Congress approved in 2007. Should Tesla get the loan? In “Only the Rich Can Afford It. Should Taxpayers Back It?” Randall Stross writing in the New York Times says no way. Alluding to the “2008 Bailout of Very, Very High-Net-Worth Individuals Who Invested in Tesla Motors Act,” Stross asks, “Can you conceive any way that federal dollars could be put at greater risk—and for no equity in return, keep in mind—to benefit fewer people?” And not only would a Tesla bailout benefit exclusively rich investors and auto purchasers, Tesla can’t cut the mustard technologically, Stross contends. He acknowledges that battery development benefits from a weak Moore’s law that increases their capacity eight percent annually, but he contends that “eight percent, compounded, would bring too few benefits, too late to Tesla: it would take nine years to halve the price of its battery pack.” Not so fast, responds Jason McCabe Calacanis, the founder and CEO of Mahalo.com, writing in the Huffington Post. “Yes Randy,” he says, addressing Stross, “the first version of technology tends to be expensive. Personal computers used to cost $5000, flat-panel TVs were $10,000 and--gasp--the first decade's worth of solar panels were not worth the price. You're a *technology* journalist at the New York Times. You understand all too well that expensive technology becomes commodity technology within 10 to 20 years of its inception.” As for battery technology, Calacanas writes, “If Tesla cuts the cost of the battery pack in half over the next nine years, they will have two choices: take about $20,000 off the price of the car or double the range to 500 miles.” In his conclusion, Calacanis has this to say to Stross: “You should be proud of Tesla and support them, as well, because if Tesla gets the *loan* (a loan, not a gift), you just might be driving an electric car built in the United States by American workers. That consumer purchase is a vote which, once cast, will help us shift our interactions with the Middle East back to condemning them for violating basic human rights instead of our dual-headed approach of insincere appeasement and inappropriate force. That approach hasn't been working out to well, has it?” My take: Tesla Motors is as deserving, or more deserving, of ATVM funds as the Big Three. Tesla VP of business development Diarmuid OConnell makes a convincing case here. But Tesla Motors is simply not to big to fail. I hope the company can raise the money it needs from private sources. What do you think? Posted by Rick Nelson on December 2, 2008 | Comments (18) Industries: Automotive, Aerospace, and Defense Test
December 2, 2008
In response to: Everyone wants a bailout—how about Tesla? vtdoubleE commented: give'em the loan! more innovation has come out of this tiny company in the past couple of years than all of the big 3. I'd buy an affordable electric car in a second even if it had a 250 mile range. That's enough range to drive to 90% of the places I go, come back, and plug the car in at night.
December 2, 2008
In response to: Everyone wants a bailout—how about Tesla? Pator commented: Who needs a sports car that can go 100 mph in 8 seconds. Not this country. Putting 500 batteries in series is no technological feat.
December 2, 2008
In response to: Everyone wants a bailout—how about Tesla? nojuice commented: Tesla does not stand a chance. The auto industry demands scale and size -- two attributes completely missing from Tesla. I agree with the NY writer. This would be throwing money down the drain.
December 2, 2008
In response to: Everyone wants a bailout—how about Tesla? Bob commented: No one should get the loan - This is supposed to be a free market. However, if available to the other "Big Three" they should be available to ALL US auto manufacturers.
December 2, 2008
In response to: Everyone wants a bailout—how about Tesla? Rob commented: Give Tesla the loan so they can buy GMs production capacity at the chapter 11 auction. That will give them production capacity to get economies of scale
December 2, 2008
In response to: Everyone wants a bailout—how about Tesla? Chris V commented: Agree with Rob... the Big 3's assets can be recycled by Tesla with a government cash infusion... providing the fresh start the US auto industry is so sorely lacking.
December 3, 2008
In response to: Everyone wants a bailout—how about Tesla? Lonnie commented: Give Tesla the loan infusion. The big three have been watching Tesla and Tesla is very, very viable. As an engineer the work they have done in the short time has proven the technology and it will only get better and LOWER IN COST in time. That has already been proven with all new technologies that have been mentioned in the above article. If not for the governments funding of NASA, we would never have reached the moon and our life style today would not be what it is without that feats accomplishment. I see Tesla as a new NASA taking us to the new frontier in energy indepence as one very conceivable alternative. They truly are an automobile manufacturer and innovator. I just wish they would continue to innovate and get an affordable, stylish, family car for the masses out as soon as possible. The roadster is nice, but we need the reality of the masses needs.
December 3, 2008
In response to: Everyone wants a bailout—how about Tesla? CrunchMaster commented: Money taken from U.S. citizens by force and distributed to private companies that are not managed properly and that cannot compete in the marketplace is a recipe for disaster. We are witnessing the beginning of the second Depression brought on by Federal government intervention in the free market, just like 1929. The parallel is almost too close, a child can see it. As for Tesla, same logic applies. Wasted money that will doom our children to $30 loaves of bread, unobtainable energy resources, and a sub-standard living condition. What a bummer.
December 3, 2008
In response to: Everyone wants a bailout—how about Tesla? CrunchMaster commented: Money taken from U.S. citizens by force and distributed to private companies that are not managed properly and that cannot compete in the marketplace is a recipe for disaster. We are witnessing the beginning of the second Depression brought on by Federal government intervention in the free market, just like 1929. The parallel is almost too close, a child can see it. As for Tesla, same logic applies. Wasted money that will doom our children to $30 loaves of bread, unobtainable energy resources, and a sub-standard living condition. What a bummer.
December 3, 2008
In response to: Everyone wants a bailout—how about Tesla? LJ commented: Loan them the money if they'll develop a more affordable (about $30k) vehicle within 2 years or demand repayment. Tesla Motors I believe would do well with the financial boost as opposed to the other three who would line their wallets. As I recall from my earlier research Tesla had proposed an affordable vehicle following the roadster. Tesla Motors has put their money where their mouth is and has proven what the "
December 3, 2008
In response to: Everyone wants a bailout—how about Tesla? LJ commented: Loan them the money if they'll develop a more affordable (about $30k) vehicle within 2 years or demand repayment. Tesla Motors I believe would do well with the financial boost as opposed to the other three who would line their wallets. As I recall from my earlier research Tesla had proposed an affordable vehicle following the roadster. Tesla Motors has put their money where their mouth is and has proven what the "
December 3, 2008
In response to: Everyone wants a bailout—how about Tesla? toocooLEDs commented: While I would personally rather see any auto industry bailout money go to Tesla before GM, I just wanted to point out, in the interest of full disclosure, that Mahalo is funded by the same benefactor as Tesla Motors - talk about "conflict of interest".
December 4, 2008
In response to: Everyone wants a bailout—how about Tesla? Danny in CA commented: Flawed as they are, at least Tesla is built around innovation. Also, Tesla hasn't gone to the well in the same way that the big 3 have. At least, those of us who remember the 70s, the 80s, the 90s, might say that. Finally, Tesla hasn't fought against every government push to make the industry greener. That push would, ironically, helped the big 3. So, Tesla deserves it more than the big 3 do.
December 4, 2008
In response to: Everyone wants a bailout—how about Tesla? tonytiger commented: Tesla should be able to obtain a half billion $$ from the 25 billion set aside for energy and technology fund.
December 4, 2008
In response to: Everyone wants a bailout—how about Tesla? BoJo commented: I think I should get a bailout before Tesla does....I checked with my wife and she agrees. And I only want $10M.
December 7, 2008
In response to: Everyone wants a bailout—how about Tesla? Alexander Bell commented: Rick,
December 8, 2008
In response to: Everyone wants a bailout—how about Tesla? RichSanJose commented: NO WAY, Tesla is a car strictly targeted to those that can afford to buy gas at any price, the very rich. If they were selling affordable elec. cars to the masses and not a sports car in line with the expensive sports cars such as those from Ferrari and Lamborghini, then yes. There is no way that anyone can afford these cars other than the rich. Let the investors that care put more into the company. Also, should they fail, the impact to job market would be nothing compared to the Big Three. If they need more R&D funding, it should come from investors and NOT our tax money. Again, if the end product was something the Big Three seem to be failing at, such as a people mover… say a VAN that can move a family 200+ miles on electricity, hydrogen, etc. and was cost competitive with the now available vans and sedans, then by all means. But it seems the goal here is to sell fast electric cars to the rich and famous…. Heck, you have to put something like a $5K deposit down just to test drive the thing.
December 29, 2008
In response to: Everyone wants a bailout—how about Tesla? Jim Wolfe commented: Thinking back a few decades (and showing my age, grand as it may be), I don't seem to recall the carriage makers and horse breeders running to the government of the day for a bailout when the 'horseless buggies' started appearing. Thousands of manufacturers sprouted (and that's NOT an exaggeration), almost as many failed. Who remembers the Duryea today, or who Henry Leland was?
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