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Should Taxpayers Back Cars Only the Rich Can Afford?

Soulskill posted more than 5 years ago | from the five-million-dollars-per-car dept.

Transportation 752

theodp writes "The NY Times questions the $400M in low-interest federal loans requested by Tesla Motors as part of the $25B loan package for the auto industry passed by Congress last year. 'The program is intended to encourage automakers to improve fuel efficiency, but should it be used for a purpose like this, as the 2008 Bailout of Very, Very High-Net-Worth Individuals Who Invested in Tesla Motors Act?' Tesla says it is assembling about 15 cars a week and has delivered about 80 of its $109,000 base-price Roadsters to date, many of which have gone to the Valley's billionaires and centimillionaires who are Tesla investors as well as early customers. We discussed the company's financial difficulties last month."

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Taxpayers shouldn't be bailing out any of these (5, Insightful)

Anonymous Coward | more than 5 years ago | (#25934169)

Let the market decide, not a group of politicians paid off by lobbyists from the money they're lobbying to get.

Re:Taxpayers shouldn't be bailing out any of these (2, Insightful)

Wandering Wombat (531833) | more than 5 years ago | (#25934475)

What do you think this is, a capitalist free-market nation? America is a socialist country, otherwise it wouldn't be redistributing fantastic gobs of wealth like this, to the truly needy car companies.

Re:Taxpayers shouldn't be bailing out any of these (2, Insightful)

LunarCrisis (966179) | more than 5 years ago | (#25934623)

That's not socialism, it's just greed.

Re:Taxpayers shouldn't be bailing out any of these (0)

Anonymous Coward | more than 5 years ago | (#25934493)

there are 3 problems facing for the big three: poor management, unions, and federal regulations. The democratic congress and president (elect) are in bed with the unions. The best thing the big three could do is go bankrupt.

no (1)

BobZee1 (1065450) | more than 5 years ago | (#25934175)

unless there are stipulations placed on the money - tesla is forced to produce a car that is sub $25,000...

Re:no (1)

Shikaku (1129753) | more than 5 years ago | (#25934177)

How about fucking 100+ MPG

Re:no (1)

BobZee1 (1065450) | more than 5 years ago | (#25934201)

i agree 100%. sounds like a perfectly reasonable requirement. seriously.

Re:no (5, Funny)

Yvan256 (722131) | more than 5 years ago | (#25934219)

I don't know how it works in the USA, but here in Canada we don't measure electricity in gallons.

Re:no (5, Funny)

An Onerous Coward (222037) | more than 5 years ago | (#25934495)

It's the energy you can get from as many 9v batteries as you can fit in a gallon milk jug. It's about 4% smaller than the imperial electrogallon, which uses a gallon-sized pail. You may remember the story a few years back when an MIT mathematician proved that an ideal battery configuration would hold two additional batteries, without stretching the jug, and we all had to recalculate our electricity bills.

But we stick with it, because we true Americans (as opposed to people in New York, California, and -- in a shocking turn of events -- Indiana) know that the metric system is the first step down the path to socialism.

Re:no (1)

LordRPI (583454) | more than 5 years ago | (#25934273)

How 'bout a fucking 100+ MPG on a car costing $106,000? With the number of people that can actually afford that car, nevertheless use a sporty roadster as their main car, saves about as much fuel as a few rap stars giving up their Hummers every other weekend.

Great way to get publicity by making a super-expensive supercar, but until Tesla can produce a car for the masses (~25K) its not going to be able to make a dent in emissions or auto sales. Green niche car.

Re:no (4, Insightful)

TooMuchToDo (882796) | more than 5 years ago | (#25934393)

You're a god damn twit. How do you think Tesla is paying for the R&D needed to make cars for average folks? Through selling cars that are marketed to people who don't care about paying $109K for a car.

Re:no (3, Insightful)

hedwards (940851) | more than 5 years ago | (#25934477)

That was my initial reaction. These things do have a way of coming down in price as more cars are designed and produced. In the long term the sports cars and race cars have a tendency to serve as a test bed for features that ultimately find their way into more affordable vehicles.

A couple of weeks ago I saw a mercedes with a bumper that had a pressure sensor to indicate when the bumper backed into something and a rear hatch which opened and closed by button. A decade ago I hadn't heard of those features in any car.

I'm not really sure how else this should work unless we want to either do without the advances or pay even more to have something that everybody can drive now.

Re:no (5, Insightful)

TooMuchToDo (882796) | more than 5 years ago | (#25934555)

My business partner and I both reserved '09 Tesla Roadsters. Why? Not because it's a hot car, or it drives like a rocket, but because we want to see electric car research pushed faster. And it was the next best thing to investing in the company. It drives me nuts when some fool comes out and says "Tesla can have help when their car is priced for the average person". They won't need help by than. They need help getting to that point.

Re:no (4, Insightful)

Jeff DeMaagd (2015) | more than 5 years ago | (#25934425)

I don't know about you, but it looks like Tesla is trying to push the costs down. Yes, right now, they are making a pretty pricey car. They next project will be a sedan which they're looking to charge half the price, which puts it in reach of a lot more people. If they can get a loan to push the development more quickly, I'd say they are at least as deserving as the incumbent carmakers. Hopefully the production scale-up will allow for more innovation in battery research, mostly in cheaper high capacity batteries.

Re:no (1)

prisoner1 (1000605) | more than 5 years ago | (#25934307)

with a 1 gallon tank.

Re:no (0, Troll)

Planesdragon (210349) | more than 5 years ago | (#25934333)

You probably don't want to drive a 100 miles-per-gallon "car". A 100 mpg motorcycle, maybe. It's just as safe, and you look less stupid.

Re:no (0)

Anonymous Coward | more than 5 years ago | (#25934607)

The roadster is an electric car.... there is no gas.... that makes 'Miles per GALLON' a meaningless statistic.

I guess technically it has an infinite mpg, but what I really think your talking about is either miles per dollar, or miles per pound of CO2

Re:no (-1, Troll)

Anonymous Coward | more than 5 years ago | (#25934221)

Wow, someone doesn't understand a bit about business. Tesla Motors is trying to make a car for under $25K, but they started with the most expensive car because people who buys those cars are underwriting their research and development. So, please, feel free to demand they make cars at whatever price you choose. I demand that the US taxpayer subsidize each car, on a cost + 20% plan. Do you really want a $100K car (with almost $30K of that going towards the battery system) being sold for $25K, with the rest of the cost being paid for by US taxpayers? Or would you rather the people buying the Roadsters (such as myself) offset the cost of the cheaper vehicles?

the rich deserve the help (0, Flamebait)

Anonymous Coward | more than 5 years ago | (#25934287)

Well since the top 5% pay %80 of the taxes - they are really just getting their money back.

Huh (0)

Anonymous Coward | more than 5 years ago | (#25934195)

That os nothing...

Here in Lebanon (Middle East), The Members of Parlament are exempt from the 40% import tax on cars and private jets.

Talk about corruption...

Re:Huh (0)

Anonymous Coward | more than 5 years ago | (#25934269)

How come Lebanon has so high tarrifs on planes and cars? I don't think they have their own automobile or aeronautical production to protect.

No (3, Insightful)

wmbetts (1306001) | more than 5 years ago | (#25934199)

We shouldn't be bailing any of them out.

Not Really (4, Interesting)

MrCawfee (13910) | more than 5 years ago | (#25934205)

Tesla's request was so they could design and build a much cheaper electric family sedan; i personally believe that it is a good investment even if the car costs 50k.

It seems unlikely that tesla will mass produce a car, but it does seem likely that they will be gobbled up by a larger company that will.

It would be money well spent

Re:Not Really (4, Insightful)

jcr (53032) | more than 5 years ago | (#25934325)

i personally believe that it is a good investment even if the car costs 50k.

Then by all means, invest your money if you think it's worth doing. Using tax money for this is immoral, not to mention unconstitutional.

-jcr

Re:Not Really (0)

KevinIsOwn (618900) | more than 5 years ago | (#25934355)

Don't provide any arguments or proof to support your position. Then someone out there might actually end up agreeing with you, instead of replying saying "How in the world is this unconstitutional or immoral"? An incorrect policy decision, maybe, but immoral? Give some damn reasoning.

Re:Not Really (3, Insightful)

jcr (53032) | more than 5 years ago | (#25934407)

immoral? Give some damn reasoning.

If you can't figure out for yourself that taking money by force is immoral, I really don't think I can help you.

-jcr

Re:Not Really (2, Insightful)

morgan_greywolf (835522) | more than 5 years ago | (#25934423)

I wouldn't say that investing tax payer money is unconstitutional in the least. It's done all the time. Public-private partnerships are what bring us toll roads, 'Montesorri'-type schools, public television, public radio, Fannie Mae and Freddie Mac ;), etc.

Cities invest money in land all the time. How do you think you get parks or public beaches or public marinas? That is investing tax payer money.

Sorry, but there's nothing in the Constitution that precludes government at any level from purchasing anything as a taxpayer investment.

Re:Not Really (0, Troll)

jcr (53032) | more than 5 years ago | (#25934465)

I wouldn't say that investing tax payer money is unconstitutional in the least.

Try reading the document sometime.

It's done all the time.

So are many other unconstitutional activities.

-jcr

Re:Not Really (5, Interesting)

TooMuchToDo (882796) | more than 5 years ago | (#25934451)

Frankly, it is his money, and my money, and everyone else's money. Welcome to a democracy. Going to war on my dime to the tune of $1 trillion+? That's immoral. Lying why we went and having tens of thousands of people die because of it? That's immoral. Lending half a billion dollars to a company that's jumpstarting the electrification of transportation? Well that's just good sense right there. So take your libertarian viewpoint to a country that cares.

Re:Not Really (5, Interesting)

jcr (53032) | more than 5 years ago | (#25934485)

Going to war on my dime to the tune of $1 trillion+? That's immoral.

Yes, that's immoral too.

Lending half a billion dollars to a company that's jumpstarting the electrification of transportation? Well that's just good sense right there.

You were doing so well, and then you went off into the weeds.

If electric cars (or ethanol, or any other possible replacement for gasoline-powered vehicles) makes sense, it won't take tax money to get it into widespread use.

-jcr

Re:Not Really (5, Interesting)

TooMuchToDo (882796) | more than 5 years ago | (#25934527)

If electric cars (or ethanol, or any other possible replacement for gasoline-powered vehicles) makes sense, it won't take tax money to get it into widespread use.

Bullshit. The market is manipulated by interests to make investing in renewable energy and electric vehicles infeasible. Price of oil goes up, investment in renewables and electric vehicles shoots up. Price of oil drops, investment dries up. An unregulated market is rarely the answer, as shown by the deregulation in the financial sector.

You may disagree with me, but I'm fairly confident as an American that the new US policymakers in play are going to make the correct decision to push electric and plug-in hybrid electric vehicles.

Re:Not Really (1, Interesting)

jcr (53032) | more than 5 years ago | (#25934551)

The market is manipulated by interests to make investing in renewable energy and electric vehicles infeasible

Who do you think does that manipulation, sunshine? Government is a problem masquerading as its own solution.

-jcr

Re:Not Really (1)

TooMuchToDo (882796) | more than 5 years ago | (#25934589)

Under a rock for the past 40 years?

http://news.google.com/news?q=opec&ie=utf-8&oe=utf-8&um=1&sa=N&tab=wn [google.com]

"OPEC Defers Output Decision to December, Seeks $75 Oil Price"

Ahh, but coordinated supply reduction to induce a price rise isn't market manipulation, is it?

Re:Not Really (1)

jcr (53032) | more than 5 years ago | (#25934609)

It seems to have escaped your notice that OPEC is a group of governments. I have never disputed that governments manipulate markets. It's wrong for the OPEC governments to do so, and it's wrong for the US government to do likewise.

-jcr

Re:Not Really (1, Interesting)

phidipides (59938) | more than 5 years ago | (#25934479)

Then by all means, invest your money if you think it's worth doing. Using tax money for this is immoral, not to mention unconstitutional.

-jcr

I'm not sure if "unconstitutional" was a typo or not, but I suspect it would be pretty difficult to find anything in the constitution that would go against using money from a bill that passed Congress to do what the bill specified.

As to immoral, is the assumption that using taxpayer money for anything other than core government services (defense, courts, etc) is immoral? From a "get back to basics" standpoint the argument against using ANY taxpayer money for anything other than these core things would make sense, but otherwise I think it's fair to say that the role of government has evolved to include acting as an incubator for future economic success. NASA is not a core service, but it is kept alive because of the technology it generates (amongst other reasons). College loans are not a core government service, but the US benefits greatly from having an educated workforce. Similarly, providing incentives to automakers to develop new technologies drives the industry in a direction that offers great potential benefit, and I'm personally excited that the government is actually including smaller companies that could potentially change old industries in some of the most recent programs. Tesla may not succeed, but if they do then this $400 million loan may some day be regarded as one of the best uses of taxpayer money that the government has ever committed to. Provided you can include investing in the economy among the roles that the US government has then this would seem to be a very "moral" use of taxpayer money.

Re:Not Really (0)

jcr (53032) | more than 5 years ago | (#25934519)

Provided you can include investing in the economy among the roles that the US government has then this would seem to be a very "moral" use of taxpayer money.

What you fail to take into account, is that every dollar the government "invests" is forcible extracted from someone who earned it. By trying to pick and choose winners and losers in the marketplace, the government distorts the market and creates inefficiencies.

-jcr

Re:Not Really (1)

phidipides (59938) | more than 5 years ago | (#25934621)

What you fail to take into account, is that every dollar the government "invests" is forcible extracted from someone who earned it. By trying to pick and choose winners and losers in the marketplace, the government distorts the market and creates inefficiencies.

-jcr

So your argument is against all taxation and government spending? American society has organized itself so that we elect representatives who determine how much and for what purpose tax money is collected. If you disagree you campaign against them and try to get them removed from office; failing that your only other options are to refuse to pay taxes (in which case you will go to jail), or to move elsewhere. If you agree to stay here and don't want to be prosecuted for tax evasion then the "forcible extraction" argument is a tough one to make. There are numerous countries around the world where you can live without paying taxes or dealing with a government (Somalia jumps to mind) but there are clearly trade-offs in not having basic services and security in those countries, both of which are benefits of money that (in your words) is "forcibly extracted" from citizens.

Re:Not Really (1)

roystgnr (4015) | more than 5 years ago | (#25934615)

I suspect it would be pretty difficult to find anything in the constitution that would go against using money from a bill that passed Congress to do what the bill specified.

Try the Tenth Amendment.

Of course, even before the Bill of Rights it was understood that the Constitution was a "white list" of enumerated powers which didn't give the Federal government authority to do anything not spelled out explicitly. But some paranoid people thought that it would be necessary to make this philosophy clearer. Apparently they still weren't paranoid enough.

I don't mean to say that the Constitution's white list isn't too limited. Competing businesses and governments have "Prisoner's Dilemma" type incentives to slack off on basic research, making such funding an excellent candidate for Federal intervention. But it would have been nice to have an actual Constitutional amendment adding that power to the list. Our alternative strategy of reinterpreting the Constitution to read "Congress can pass any bill which, in their own opinion, promotes the general welfare" has had a history of backfiring badly.

Tax money *is* my money (1)

Rix (54095) | more than 5 years ago | (#25934541)

If you don't like it, vote against it.

Re:Not Really (1)

p0tat03 (985078) | more than 5 years ago | (#25934573)

The question then would be: were any specific loan terms set down to make sure that Tesla *does* in fact use this money for development on a consumer vehicle instead of yet more absurdly priced gadgets?

In this case: Yes (0)

Anonymous Coward | more than 5 years ago | (#25934209)

In this case: Yes.

I wouldn't view it as just subsidy for an automaker in this case. But a special kind of research fund.

Yes. (5, Insightful)

Trillan (597339) | more than 5 years ago | (#25934211)

Who else is going to improve the technology? If it was one of the companies already in the industry, it'd be done by now. Don't give the entrenched guys anything. Give it to new companies.

Just because the rich get it first doesn't mean we won't get it, too. Look down at the device under your hands as you flame me for proof.

More than all of Detroit combined (5, Insightful)

MaizeMan (1076255) | more than 5 years ago | (#25934339)

I agree completely.

The best way to develop the technology and bring the cost down to something affordable is to have it in production. And right now Telsa is producing 15 MORE zero emission cars a week than all of the Detroit automakers combined.

Re:Yes. (1)

LostCluster (625375) | more than 5 years ago | (#25934357)

Here's the backup to that. The first PC cost about $10,000 and did a fraction of what today's $1,000 can do.

So, why is a car that's only five times more expensive than a typical GM car being singled out? Telsa's stated goal is to ramp up production to become a mainstream vendor, and they're doing a whole lot better than the Chevy Volt vaporware. They're more worthy of federal investment than GM.

Re:Yes. (1)

portnux (630256) | more than 5 years ago | (#25934401)

All the automakers are working on similar vehicles. The problem is battery tech isn't quite there yet. Once a good battery comes along that can last more than a couple years in a car at a price that isn't insane these cars will be everywhere.

Re:Yes. (0)

Anonymous Coward | more than 5 years ago | (#25934513)

The battery tech is there. What engineers are having to work around is Big Oil's ever growing patent portfolio. You see in the news about some company announcing some new technology in electrical storage. Almost invariably it gets bought out by a holding company (whose ownership is of course... oil companies), and the patents that company has are held in limbo to make sure that electric cars as a mainstream vehicle just will not happen.

Re:Yes. (1)

pauljlucas (529435) | more than 5 years ago | (#25934649)

Who else is going to improve the technology?

But the technology in 1996 [wikipedia.org] was already good enough. Had GM not scrapped their electric car program, they presumably would have already made significant improvements in the technology over the last 22 years.

yes (0)

Anonymous Coward | more than 5 years ago | (#25934213)

Tesla has a good business plan: Use the large margin on an electric supercar to subsidize the development of the foundational components for modern electric cars. The big 3 are failed dinosarus. I'd rather see billion dollar bailouts go to companies like Tesla, that gave a real plan for the future, than GM and Ford who will piss it away building hybrid SUV monsters.

It's more of an investment (3, Insightful)

humphrm (18130) | more than 5 years ago | (#25934229)

Tesla may not sell cars that everyone can afford today, but just by making cars, they are assumedly building on their ability to lower prices in the future.

As long as the money goes toward R&D, it's an investment in our future which I would support even if the other Big 3 were't going bankrupt.

Yes, for the trickle-down effect (0)

Anonymous Coward | more than 5 years ago | (#25934237)

It will trickle down to us single-digit millionaires eventually. Who really cares about the scum who don't have a million yet? I'll personally trickle a yellow golden shower their way if the insist.

RAISE THE GAS TAX! (1, Insightful)

TheMiddleRoad (1153113) | more than 5 years ago | (#25934241)

We should raise the gas taxes. This will keep money in the US instead of foreign government hands, help the budget problems, reduce global warming, lower oil prices, and weaken our enemies. Then we can afford to boost companies like Tesla, who will eventually make cars for everyone, if they survive.

Re:RAISE THE GAS TAX! (1)

LostCluster (625375) | more than 5 years ago | (#25934391)

I have just one modification to that plan. Raise the gas tax slowly but surely with a nice defined timetime attached. People can't afford to buy new cars right away, but if it becomes clear that we're going to have $6/gallon gas in 2016, that's going to sell a whole lot of hybrids, and create a ready market for the electric vehicles once battery technology improves.

Re:RAISE THE GAS TAX! (3, Interesting)

jcr (53032) | more than 5 years ago | (#25934637)

We should raise the gas taxes.

NO.

As P. J. O'Rourke said, giving money to governments is like giving whiskey and car keys to adolescents. The proper role for taxation is to raise the funds necessary for the government's constitutional powers, not to manipulate the behavior of the public.

-jcr

Why not? (0)

Anonymous Coward | more than 5 years ago | (#25934251)

The government already gives my money to crack whores.....

Economy of scale (1)

devman (1163205) | more than 5 years ago | (#25934253)

If more capital helps them ramp up production and get more exposure I'm all for it. Better than a new hummer or F150 I suppose. Economy of scale will hopefully drive down the price. One of Tesla's pr folks was on NPR saying just that, if they had GM's facilities the prices wouldn't be so high.

Mischaracterized (5, Insightful)

It doesn't come easy (695416) | more than 5 years ago | (#25934257)

To say that a low interest loan to Tesla is a bailout for billionaires is to seriously ignore what Tesla is doing. While everyone else is either developing low-speed electric cars (e.g. cars that can't run on the highway and don't have to pass all of the safety regulations) or estimating that their electric hybrid will run AT MOST 40 miles off the battery, Tesla has developed the first practical all electric car that can run 200 plus miles on a charge using (mostly) existing technology. You know, something that the big three for the last 20 years has said couldn't be done.

In addition, Tesla is continuing to work to engineer a pure electric car for the masses. This is where most of the money would be applied. It's not to bail out the roadsters already being built/already on order.

Plus, the established auto makers research is primarily still into improving ICEs, which is inherently, horribly inefficient. We've had over a hundred years of research and development into improving the ICE and it's still AT BEST only 25% efficient. We don't need any more ICE development, thank you very much. Considering that the Tesla roadster gets 4 times the fuel efficiency as the best ICE, the money would be applied exactly as it is intended (something that would probably not be the case for GM and company).

Lastly, if we're talking about bailouts, why should taxpayers bail out the Big Three? Their officers are responsible for pitifully shortsighted business decisions for the last 30 years, culminating in the current state of the US auto industry. If we reward businesses for bad business decisions, what's the incentive to do better? Let them be bought out by Toyota, et al. Good riddance, I say.

Re:Mischaracterized (2, Interesting)

Anonymous Coward | more than 5 years ago | (#25934483)

Plus, the established auto makers research is primarily still into improving ICEs, which is inherently, horribly inefficient. We've had over a hundred years of research and development into improving the ICE and it's still AT BEST only 25% efficient. We don't need any more ICE development, thank you very much.

ICEs aren't horribly inefficient. Something like a 25% efficiency is the maximum possible allowed by thermodynamics. By that standard, the modern automobile engine is quite efficient, especially if driven correctly to maintain it in the optimum efficiency band.

If you used that same gallon of gasoline to power a generator to charge your electric car, you wouldn't get any more efficiency--the opposite, in fact, due to losses in the conversion and storage process for electricity. The main benefit of electric cars is diversity of sources (and being able to take advantage of more efficient generators, which still aren't going to magically beat the limit imposed by the Carnot cycle), not that they're so vastly more energy-efficient than gasoline cars (because holistically, they're not).

Re:Mischaracterized (1, Redundant)

TomXP411 (860000) | more than 5 years ago | (#25934533)

Think about it. Even though a Tesla costs 100k, every one on the road is one less gas car on the road, crudding up the atmosphere and using up irreplacable oil. Not only that, but Tesla's future success relies on selling cars at a fraction of that price at some point. Early adoption is expensive, but without it, there can be no commodity market for the same product. Look at DVD players, for example. Early models were $1000, and there were only a few titles available for the first Christmas season. Now, players can be had for $30, and stores don't even stock VHS any more. If we don't support this technology now, while it needs subsidies, at what point will the market decide that it IS worth it? When gas is $10 a gallon? $20? $40?

Re:Mischaracterized (0)

Anonymous Coward | more than 5 years ago | (#25934619)

Translation:

Your daddy bought you a Tesla. Don't let them go out of business!

Re:Mischaracterized (3, Interesting)

maxume (22995) | more than 5 years ago | (#25934633)

No one gives a damn about efficiency. Sure, given equal performance and convenience, most people will choose the more efficient option, but the performance and convenience damn well better be equal.

The point of bailing out the big 3 is to slow down the rate at which they dissolve, giving the 3 million people that are nearly directly dependent on them for employment more time to find other jobs, retrain or die. The thought is that the ongoing inefficiency is less costly than the other way round.

Re:Mischaracterized (2, Interesting)

Comatose51 (687974) | more than 5 years ago | (#25934653)

Just because the output of an organization is socially desirable, it doesn't mean it's economically sound. What if I started a company to build electric cars for everyone, not just at $100,000, but at a severe lost, should the government subsidize me? Most of the time loans should be made for economically sound reasons. Low interest loans to risky borrowers is dumb and is what got us into our current financial crisis. Yes, housing for everyone is socially desirable but it doesn't make good financial sense.

Woa woa, let's step back (4, Interesting)

Arthur B. (806360) | more than 5 years ago | (#25934265)

Should taxpayers back car makers first of all. Propping up failing industries with cash is like trying to fight gravity by throwing things up in the air. Should productive people pay for the calamitous ruin produced by government backed union thugs? So politicians bought michigan votes and now it's time to pay, only the payers will be the people living in the US. Uh uh.

Should we pay for the cars of the wealthy... ooooooh the wealthy. Yeah right, this is about the wealthy. Wait, no. Actually this is about the fucking Marxists who believe in unions, who believe in a socialized banking system.

Taxpayer should not back anything, and that includes the most bankrupt and morally corrupt company of all, the US government. Who will bail out the US government? Ponder this.

Re:Woa woa, let's step back (0)

Anonymous Coward | more than 5 years ago | (#25934415)

who believe in a socialized banking system.

Yeah, I'm sure Marxists the world over support our current debt based monetary system as currently run (for private profit).

Re:Woa woa, let's step back (1)

hedwards (940851) | more than 5 years ago | (#25934629)

Nice to see that people still buy that sort of propaganda, because I'd hate for people to think that workers actually do work and management actually manages.

Unions exist primarily because some people hate workers and are going to grasp on anything they can find to justify it. The Big 3 got into trouble because of poor managing decisions not because of "union thugs." Whether you care to admit it or not the union members don't make really anything more than what the non-union employees do for other companies in the US. The cost of labor is pretty much dead even over all.

The big difference is that the Big 3 were poorly managed for years and failed to look to the future.

we shouldn't be bailing any of them out (4, Insightful)

j0nb0y (107699) | more than 5 years ago | (#25934279)

We shouldn't be bailing out any of the automakers, but since we are wasting the money anyway, I would greatly prefer the money to go to companies with *vision* rather than to companies that will waste the money making hybrid SUVs.

Re:we shouldn't be bailing any of them out (1)

Locke2005 (849178) | more than 5 years ago | (#25934641)

I would greatly prefer the money to go to companies with *vision* rather than to companies that will waste the money making hybrid SUVs.
I think most American taxpayers would object to the US government bailing out Toyota, Honda, and Nissan!

Spreading the wealth (5, Funny)

Waffle Iron (339739) | more than 5 years ago | (#25934289)

many of which have gone to the Valley's billionaires and centimillionaires

Usually, a centimillionaire only has enough cash to buy a used car. Making this high-end car available to these people sounds like a huge benefit to me.

Re:Spreading the wealth (1)

WalksOnDirt (704461) | more than 5 years ago | (#25934439)

Yeah, you'd think the editors here would know the difference between centimillionairs and hectamillionairs, and correct theodp's mistake before it became a public embarrassment to him.

Re:Spreading the wealth (0)

momerath2003 (606823) | more than 5 years ago | (#25934597)

The editors of Slashdot are almost by definition a public embarrassment.

Re:Spreading the wealth (1)

VGPowerlord (621254) | more than 5 years ago | (#25934453)

Lets see.... if a centimeter is .01 meters, does that mean a centimillionaire is someone with $10,000?

Wow, that would be pretty cheap!

Wait, maybe they meant hectomillionaires or kilomillionaires.

Well . . . (3, Informative)

chinakow (83588) | more than 5 years ago | (#25934291)

Tesla is asking for a loan, which means it will be payed back, I have a few fedaral loans and no one gives me grief or calls it a hand-out. They just nod and say, "yeah, I have student loan payments too." second, Tesla makes electric cars using rather advanced battery systems to get a theorectical 200 miles per charge and something more like 100 miles per charge if you believe Jason Calacanis. So if you can accept that "improve(ing) fuel efficency" is the same as using new technology to make an electric car that people want, then giving a loan to Tesla seems to fit the criteria for this $25B loan package. I hear Tesla is also working on cars for regular people, so why not? They are making a product that people want, and if they succeed in making a car affordable to the masses then they will succeed in increasing fuel efficiency.

No bailouts for any of them (1)

tfiedler (732589) | more than 5 years ago | (#25934295)

Subject says it all, no bailouts for any of them.

Hooray for class warfare! (5, Insightful)

Penguinisto (415985) | more than 5 years ago | (#25934315)

Seriously, folks - this has less to do with protecting the Rolls Royces of this world, and more to do with encouraging alternate means of locomotion.

Where would you rather give your money (if you're a US taxpayer, it is your money)... to a bunch of failing and backwards-looking automaking corps, or to a young and hungry company that is looking to change the very way we fuel up our cars?

Forget the politics - the Big Three are in thrall to a wage and compensation plan that is simply unsustainable and way above market value, no matter how the mathematics are applied. Not blaming the unions per se (the corps agreed to it, after all) but seriously - add it up yourself.

Coupled with the dragging and tooth-pulling required to get the likes of GM and Ford to go all-alternative (or to even jack up the fuel efficiency to something near what the competition has right now)? Why bother? They'll simply make a lot of noises about having changed their ways, and 10 years later they'll be right back in Congress again, begging for more money.

This may sound trollish, but screw that - let the innovators of this world get a leg-up, if we're going to be throwing around money in the first place. Let the collapse of the Big Three be an object lesson to those who think they're somehow entitled to continued existence just because they happen to be a big corporation.

/P

Re:Hooray for class warfare! (1)

Lulfas (1140109) | more than 5 years ago | (#25934381)

The union contracts are the single biggest anchor on the Big Three. They need to fail, go into bankruptcy court, divest those contracts and start from scratch. Only chance.

a source of real world data (1)

jschen (1249578) | more than 5 years ago | (#25934335)

If Tesla is the only one out there willing to try out actually selling fully electric cars (as opposed to leasing them with no right for the lessee to buy the car afterward), then I think an investment in them is a good investment in finding out how well battery technology really works in automotive applications in the real world. Consider the following quote from the article: "BMW believes that current technologies used in the all-electric vehicles have not been tested enough in real conditions to be ready to be sold to the public. It will begin by leasing for one year a fleet of 500 Mini E's for $850 a month each. At the end of the lease term, the cars will be returned to BMW for testing." Those are some awfully expensive experimental cars that the lessees can't even buy afterward. Tesla's ahead of the rest of the industry in this area, and how their cars perform in the real world over time will teach the rest of the industry a lot about electric cars.

Is this not the same question as: (4, Insightful)

maeka (518272) | more than 5 years ago | (#25934337)

Should taxpayers back space stations only the rich can afford to visit?

Re:Is this not the same question as: (1)

thesaurus (1220706) | more than 5 years ago | (#25934635)

Better yet is the Space Shuttle, a hyper-fast sports car/rocket that only Air Force types with PhDs can use.

the goal post won't come to you (1)

ahooligan (1420151) | more than 5 years ago | (#25934351)

We need to support every reasonable alternative to oil. Yes the prototypes are expensive but in the long run the benefits will be shared by all. We have paid 2 trillion dollars in Iraq to subsidize oil and destroy our standing in the world why not try a different approach? We pay soldiers to stand guard over oil and gas fields & lines all over the world, think how much we could save if we got away from all this military waste?

Why GIVE them anything? (2, Insightful)

Anonymous Coward | more than 5 years ago | (#25934411)

If they need money, they can SELL me a car. A good car, that I can afford.

What is this nonsense about throwing money we don't have at problems that aren't ours?

What's next? The Ferrari bailout?

The Article is Bailout FUD (1)

mindviews (780198) | more than 5 years ago | (#25934467)

The $25 billion from this program is supposed to be used to get real technology on the roads. Companies can use the grants and loans to "re-equip, expand, and establish manufacturing facilities in the U.S. to produce light-duty vehicles and components that make meaningful improvements in fuel economy performance."

My understanding is that Tesla applied for somewhere around $400 million to help finance their Model S sedan: all-electric, 200+ miles per charge, $60k base price (I assume a real price closer to $70-75k). Each new generation lowers the cost of electric cars and Tesla would be building up the valuable knowlege needed for a true consumer car while at the same time expanding it's manufacturing capabilities. In short, if Tesla gets the Model S on the road, it will have gone much further than any other car company in getting electric cars on the road in the US.

This is investment money and was designed as such. The real danger in my mind would be if Congress decided to take these funds and turn it into a Big 3 bailout. That would significantly set back the plans to get new generations of energy-efficient cars on the road.

F**k the Illuminati! (1)

Terminus32 (968892) | more than 5 years ago | (#25934471)

I'm fed up with stuff like this...even bigger class divide, the poor always seem to suffer even more.

Absurd Question (3, Insightful)

smack.addict (116174) | more than 5 years ago | (#25934481)

Any new technology is initially going to be affordable only by the wealthy. If we say we are not going to subsidize R&D for products for the wealthy, we are saying we are not going to subsidize R&D at all.

Eyes open (0)

Anonymous Coward | more than 5 years ago | (#25934487)

Tesla. Bought or cornered by nissan in the upcoming months. You'll see.

Wait, we're bailing out the wealthy now? (1)

roystgnr (4015) | more than 5 years ago | (#25934507)

I was all in favor of giving hundreds of billions of taxpayer dollars to poor impoverished bankers and investment brokers, but I didn't expect anything like this!

1950's: Should we fund computers only rich people (4, Insightful)

Ed Pegg (613755) | more than 5 years ago | (#25934509)

A similar question could be asked about computers, in the 1950's. Electric cars are very likely something that will be needed in the future. The more that gets done on them now, the cheaper they will be in the future. These first few cars will be expensive, yes, but that goes for most prototype cars.

Get rid of regulation! (1, Interesting)

Anonymous Coward | more than 5 years ago | (#25934523)

Why does it cost Tesla $200 million to bring ONE car to market?
Corrolary: why is the Tesla Roadster 10% heavier than originally designed?
Why does it cost GM billions to survive?
Corrolary: why do cars look increasingly alike?

Answer: government regulations dictating design of everything right down to the armrests, not to mention buttloads of useless safety gear (are cars *really* safer now than 10 years ago?). We've made the barrier to entry way too high that you simply can't have a small automotive startup.

If you really want to spur the industry to life you'd start repealing car design legislation.
The secondary advantage is you'd no longer be dependent on companies "too big to fail".

Think of it as an investment (0)

Anonymous Coward | more than 5 years ago | (#25934531)

I'm far more unhappy about the hundreds of billions being given to financial corporations on Wall Street. Those were deliberately run into the ground by obviously unsound economic practices. Loaning money to manufacturing companies makes better sense since the money will be spent making stuff, employing people who will thereby be able to afford food, houses and paying taxes.

As for lending money to Tesla -- they are developing the sort of huge, advanced battery design we'll need for all-electric or plug-in hybrid cars. Investing in Tesla sounds like an investment into raw research, something that not done enough in America.

Metric money (4, Funny)

kuhneng (241514) | more than 5 years ago | (#25934547)

A centimillion only buys one decitesla. I suspect the editors were referring to hectomillionaries, though with the recent gyrations in the market some of them may have dropped an exponent or two.

No Loans (1)

Comatose51 (687974) | more than 5 years ago | (#25934553)

Either we nationalize the company or nothing. Think about it for a minute. When you loan someone money at a low interest rate, they get almost all the upside and none of the downside. If Tesla goes bankrupt, what are we left with? Nothing. If Tesla does well, what do we get? Low interest payments. We the taxpayers are bearing the risks, not Tesla or its investors. If they want us to bear the risks, then we must get a share of the prize. Then we should buy preferred shares from Tesla.

Personally, I'm against both. The US government should not be in the business of making loans. Under what criteria does the government give out loans? Who qualifies? Why shouldn't we give the low interest loans to our students to go to college? What about mom and pop stores? What about Toyota and BMW? These questions are normally answered by the lenders and judged on the merit of the borrower's business proposal.

At least... (1)

itsdapead (734413) | more than 5 years ago | (#25934557)

OK, so electric cars are not going to save the planet as long as the electricity still comes from fossil fuels.

However, at least Tesla seem to have a business model which involves inventing new stuff, manufacturing it and selling it to customers. Frankly, I find subsidizing them far less offensive than spending trillions bailing out the banking industry after their self-serving little pyramid scheme went titsup.

(Disclaimer: I'm in the UK so I won't be subsidizing Tesla - wish I could say the same for the banking industry).

$400 million for Tesla is too much (1)

Animats (122034) | more than 5 years ago | (#25934559)

That's a lot of cash for a startup. I doubt they're good for the money. So, no bailout.

How about we slash oil subsidies? (3, Informative)

plopez (54068) | more than 5 years ago | (#25934565)

Why not repeal the subsidies to oil companies? Some direct, some indirect. That would level the playing field, stop skewing the market and then we would see where alts to oil stand in terms of economics. Then a decision on what to do about alt energy and transport will be easier to make.

http://gristmill.grist.org/story/2008/3/6/122829/2907 [grist.org]

http://www.ucsusa.org/clean_vehicles/vehicle_impacts/cars_pickups_and_suvs/subsidizing-big-oil.html [ucsusa.org]

http://cleantech.com/news/node/554 [cleantech.com]

http://www.commondreams.org/news2008/0401-12.htm [commondreams.org]

http://www.progress.org/2003/energy22.htm [progress.org]

Bailout and making changes to the system (1, Interesting)

Anonymous Coward | more than 5 years ago | (#25934581)

Tesla is the tip of the iceberg. The big traditional car companies should have made the transition to new technologies and electric cars long time ago. For some reason it did not happen. At the time of handing out taxpayers bailout, would be a perfect occasion to start a congressional hearing to find out why all this did not happen. This would be the perfect time to find out if there were any conspiracies, collusion with the oil industry, killing innovations which could have made difference.
This would be a good time to find out why the car industry did not make the changes which would have avoided to find themselves where they are now. Maybe it's also the time to name names and make changes to legislation that would avoid to get into the same situation and to create a system where people in charge of making critical mistakes for any reason can be charged.

Is there any alternative? (1)

Millennium (2451) | more than 5 years ago | (#25934595)

In order to drive society forward, you must back the people who are capable of doing so. Given that society often requires money in great quantities before it can advance, there really is no other choice: you must back those who have become capable of doing what needs to be done. Backing those who cannot make a difference is doomed to fail, so the best you can hope for is to back those who can.

Why not? (0)

Anonymous Coward | more than 5 years ago | (#25934613)

Isn't most of the tax income coming from the top 1% anyway?

Re:Why not? (1)

jcr (53032) | more than 5 years ago | (#25934651)

Isn't most of the tax income coming from the top 1% anyway?

Not most, but a disproportionate amount. Most of the tax money has always com from the middle class, since they have enough money to be worth plundering, but they aren't as sophisticated in buying favors as rich people are.

-jcr

People don't understand electric cars (1)

Locke2005 (849178) | more than 5 years ago | (#25934625)

You can't build any purely electric car with a decent range without putting $30,000 worth of batteries in it. So Joe Sixpack isn't going to be able to afford it no matter what you do. If your going to spend money, spend it either on making cheaper hybrids, or on basic battery research. Plug in hybrids are what we need right now, but no major auto company will have them available for sale until 2010. Excellent planning, dudes!

Liquidity (3, Insightful)

Britz (170620) | more than 5 years ago | (#25934631)

I thought the whole bailout (not the one for the car industry, but rather about credit) was about liquidity. As anyone in the business world can tell you, liquidity problems can sink the best companies. In other words: You can have the best business idea ever, but if no one wants to invest in it you won't be able to make money. Same can happen down the line. If you have all you money invested, for example in machines, because demand is so high, and then one of you customers pays his bills late you could go belly up very fast.

Some banks even pull that on you in normal times. Maybe because they think they can make more money by selling your assets than by waiting for interest to come.

Now because nobody trusts anybody anymore in the credit industry liquidity has dried up. Many good businesses could fail because they are unable to borrow money. If one of their customers pays late ...

Tesla says they have orders for years to come. Maybe they have a very sound business, but still have problems getting money because of the banks.

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