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Nonsense article on Elon Musk subsidies

Discussion in 'News' started by Manuel, May 30, 2015.

  1. Manuel

    Manuel Member

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  2. Manuel

    Manuel Member

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    The whole article is misleading and the writer doesn't seems to understand why subsidies exist, that Tesla is not the only company to get it, that ZEV credits and 7.500 incentives applies to every EV, that Tesla was saved by Daimler investement and not Government, that fossil fuel are subsidised by 10 million a minutes worldwide, etc.....

    But probably the most wrong statement is that the Rodster price was $89.000, Model S $100.000 and Model III $35.000 "after" incentives.

    Someone has to stop all this disinformation about Tesla!
     
  3. Cosmacelf

    Cosmacelf Active Member

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    The best retort on subsidies I've heard is that most taxpayers get a similar tax break, but no one bats an eye about that: the mortgage interest deduction.
     
  4. mdevp

    mdevp Member

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    He also says that all of the gov't contracts with Spacex are subsidies.
     
  5. Manuel

    Manuel Member

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  6. nwdiver

    nwdiver Active Member

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    #7 nwdiver, May 31, 2015
    Last edited: May 31, 2015
    People also gloss over the ENORMOUS subsidy the oil industry gets....

    These things ain't cheap;
    136078.jpg

    'We need a military presence to protect our supply of sunlight' - Said no one...... EVER.
     
  7. mspisars

    mspisars Member

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  8. AudubonB

    AudubonB Mild-mannered Moderator Lord Vetinari*

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    That the carriers are nuclear-powered means essentially nothing with respect to the bottom-line cost of maintaining the U.S. Fifth Fleet, and the overall cost of protecting the oil flow goes far, far beyond just the cost of the 5th.
     
  9. Doug_G

    Doug_G Lead Moderator

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    None of the aircraft they carry are, nor are the support vessels. But the point he was making was the cost in protecting oil supplies, not the military use of fuel (which is huge).
     
  10. nwdiver

    nwdiver Active Member

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    Yeah.... we protect our supply of oil FAR FAR more to support supply for DOMESTIC purposes... specifically keeping it cheap. We've got more than enough domestic supply to keep our military moving... that's not the concern.

    I've spent >1000 hours operating the steam plant on one of them carriers... in a ~120F engine room; I'm well aware that they're nuclear... and why I was in the gulf for >6 months... to support our addiction to oil.
     
  11. smac

    smac Active Member

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    The single biggest industry to benefit from government largesse is the financial services one.

    And being frank about it, this has indirectly this has also gone into the likes of Tesla too.

    Often glossed over is "Tesla's paying back of the US Govt. loans" actually came by issuance of convertible bonds, back into a market awash with QE money with nowhere to go in the real economy.

    It's the way of the world right now and I suspect few that have made serious money since 2008 can't at least in some part trace this back to government spending or market intervention. Quiet how long this can continue without real productivity/efficiency gains, only time will tell.
     
  12. Grendal

    Grendal Active Member

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    The best argument when it comes to the protection of our oil interests is Iraq War I. How else do you explain that war other than oil interests? That one war was a massive $1 trillion subsidy of oil and gasoline. In no way was the cost shown at the pumps.
     
  13. AudubonB

    AudubonB Mild-mannered Moderator Lord Vetinari*

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    Do I misremember, or did the convertible issuance occur some 6-8 weeks AFTER the loan payback? I'll concede that I can't recall the specific timing.
     
  14. brucet999

    brucet999 Active Member

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    Here's my email to the Times, which BTW used to be a first class newspaper.

    Re: Subsidy King, by Jerry Hirsch, Business section May 31

    I get that Hirsch evidently harbors antipathy toward Elon Musk, but in writing his piece, he at least owes the reader the duty of accuracy and a semblance of balance. To wit:


    Hirsch states that Musk, in a 2008 blog, planned a sedan to sell at "about half the price of the $89,000 Roadster", but instead the Model S "typically sells for $100,000". That sounded wrong to me, so I looked it up (maybe Jerry should have as well) and found that the bare-bones original 2008 Tesla Roadster sold for $98,500 (Road & Track March 2008) and improved 2011 Roadsters ranged from $109,000 to $128,000. The 5 passenger Model S sedan, finally released in 2012, was offered in 4 driveline versions with base prices of $57,400, $67.400, $77,400 and $92,400, topping out at about $112,000, without government incentives.


    Hirsch asserts that Tesla's planned lower price sedan is expected to sell for $35,000 to $40,000 after subsidies. I looked that up too, and the $35k to $40k price target is before subsidies, not after.


    In Hirsch's discussion of the Federal tax credit to buyers of Tesla Model S, he sees fit to tell us (presumably to incite class envy in his readers) that Tesla owners have an average household income of around $320,000. I suspect that the mean income level of Tesla buyers would be about half that, given that a few immensely wealthy buyers would bring the average way up with little effect on the mean. Another study found that the mean income of Tesla buyers is roughly the same as that of buyers of the $43,000 Nissan Leaf.


    The statement that Tesla Motors lost $245 million on $3.2 Billion in 2014 should have been balanced with recognition that all start-ups lose money at first, especially in the automotive industry. Clearly Tesla's losses are in large part due to the huge capital expenses required to expand its free charging network, to design and test two entirely new vehicles, to launch the PowerWall home and business battery system and to begin building a giant battery factory. Tesla actually booked an operating profit in 2014 on auto manufacturing activities and they have orders with $5,000 deposits for 20,000 Model X SUVs, which when delivered will generate about $2 billion of additional revenue. If their profit margin were just 10%, that would add $200 million to the bottom line in 2016.


    Hirsch counts among Tesla's government assistance a $45 million Dept of Energy loan, but does not see fit to mention that the loan was repaid in full within a year or two, something that cannot be said of many other companies, including General Motors.


    I am baffled as to why Hirsch harps on Space-X receiving government money. Who else is going to pay to launch satellites and space station cargoes? Mostly government, and to the extent that they contract with Space-X (and its domestic competitor), they are keeping millions of dollars at home that would otherwise go to Russia or France. How, exactly, is that a subsidy?


    As to the basic premise of the piece, I guess Hirsch is upset that when government offers incentives to encourage use of clean energy, People like Musk use those incentives to build (SolarCity) or enhance (Tesla) their businesses. Why he lumps in Space-X, which is not subsidized and has demonstrated that a private firm can do what only government (NASA) used to do, and can do it faster and at less cost, completely escapes me.


    Bruce Thompson
    Huntington Beach
    (Fan of clean energy but not a Tesla owner nor stockholder nor Solar City customer)
     
  15. StephenM

    StephenM Active Member

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  16. slcasner

    slcasner Member

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    The terms "average" and "mean" refer to the same statistic. Perhaps you meant "median" instead?
     
  17. smac

    smac Active Member

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    I can't find the exact timings. I believe the first issuance was around 15 May 2013 and federal loan payback was 22 May 2013, either way the first tranche of convertibles was always destined to pay back US Govt.

    http://files.shareholder.com/downloads/ABEA-4CW8X0/2475940123x0xS1193125-13-222426/1318605/1193125-13-222426.pdf
    Ultimately they ended up with notes bearing a lower interest rate than the government loan, and it was more an exercise in refinancing (and to an extent political distancing). My assertion is this would have been very difficult if the markets weren't subject to constant rounds of QE and other governmental monetary stimuli.
     
  18. AB4EJ

    AB4EJ Member

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    This is very well thought out and written. One nit: I'm not sure how I would pay $43,000 for a Nissan Leaf. Current pricing for the top of the line Leaf SL before tax rebate is $35,970. I think I paid $29k for mine (before tax rebate).
     
  19. dsm363

    dsm363 Roadster + Sig Model S

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    Great e-mail. One small typo if you haven't sent it yet. Should be $465 million Dept of Energy loan
     

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