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Tesla Motors Repays $465M Government Loan 9 Years Early

Soulskill posted about a year ago | from the electric-money dept.

Government 446

Tesla Motors announced today it has completely repaid the $465 million loan from the U.S. Department of Energy the company received in 2010. The funds were generated by Tesla through a recent sale of their stock, worth close to a billion dollars. The stock price had risen sharply after the company reported its first profitable quarter (and the stock still sits roughly 50% higher than before their earnings release). Today's payment of $451.8 million finished off both the loan's principal and its interest, nine years before the final payment was due. Tesla CEO Elon Musk said, 'I would like to thank the Department of Energy and the members of Congress and their staffs that worked hard to create the ATVM program, and particularly the American taxpayer from whom these funds originate. I hope we did you proud.'

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It's about time! (4, Funny)

Anonymous Coward | about a year ago | (#43798267)

Finally!

Re:It's about time! (4, Insightful)

LocalH (28506) | about a year ago | (#43798309)

And yet the thanks they get is the state of North Carolina (and probably others too, but NC is the one I've heard about recently) shitting all over them because they want to sell their vehicles directly to people instead of having to go through "third-party dealers".

Re:It's about time! (5, Insightful)

Fluffeh (1273756) | about a year ago | (#43798515)

In Australia, we call it Tall Poppy Syndrome [wikipedia.org] where someone that is doing outstanding work is seen as a threat, a target and something to be cut back down to size. Though in this case, I would say that there is a hint of Schadenfreude [wikipedia.org] thrown into the mix as well.

Basically, it's just sad and pathetic.

Re:It's about time! (5, Interesting)

Anonymous Coward | about a year ago | (#43798777)

It's also very much political. Elon Musk's and Tesla's success under this loan program means that it was a Good Idea, and the Republicans don't want ANYTHING that President Obama or the Democrats have been involved in to be considered a success. They want all these loans to fail as proof that Keynesian economics is flawed, that the very idea of the government loaning money to renewable energy ventures (rather than their own buddies, Big Oil) is doomed to failure.

The GOP is so out of their minds with insane rage that they would do anything to ensure that no progress is made under a Democratic administration, even if it means Americans have to suffer a prolonged recovery. They want the sole credit. They also want to make everyone forget that it was their own policies of deregulation that caused the economy to tank in the first place, so that their buddies on Wall Street can make even more money without being held accountable. The only kind of capitalism that these assholes want is the kind that makes THEM richer. That means pumping more oil, for one.

Re:It's about time! (0, Interesting)

Anonymous Coward | about a year ago | (#43798835)

Did Tesla have to pay a penalty for early repayment? You know, like banks will do if you want to pay a mortgage off early. Or is it a different set of rules?

If they had no penalty, then did the government make any money off this loan? If not, you see why the private sector would not make this loan and Tesla went to gov't. I'm not saying this was a bad decision, but if the government is loaning out taxpayer money without adequate return on investment, the taxpayers should be pissed off as much as a bank's shareholders would be.

Re:It's about time! (4, Informative)

sgt scrub (869860) | about a year ago | (#43798693)

Texas is working on banning them too. I wonder if other companies that received loans are running into walls created by state and local governments with republican majorities.

Texas, North Carolina Fighting Tesla's Dist Model (4, Insightful)

Radtastic (671622) | about a year ago | (#43798747)

Texas also has pushed back on the manufacturer-direct model

http://money.cnn.com/2013/05/20/autos/telsa-car-dealers/index.html [cnn.com]

I especially take offense with this argument:

"When manufacturers discontinue a brand -- such as Pontiac, Mercury, Oldsmobile or Saturn -- auto dealers still remain to help the customer,"

In reality, if Tesla were to go out of business, individual mechanics would open shop assuming there was a business demand. If there wasn't any demand, then it wouldn't matter if the sale originally involved a dealer or not. (Unless said former-dealer was unclear on the concept of business.)

Re:Texas, North Carolina Fighting Tesla's Dist Mod (0)

Anonymous Coward | about a year ago | (#43798803)

"help the customer". Whenever I take my car to the dealer they always help them selves to my wallet, that's for sure.

Re:It's about time! (5, Insightful)

ChrisMaple (607946) | about a year ago | (#43798819)

Dealers are a huge lobby and major contributors in all states. This is a clear case of entrenched influence against the public interest, in opposition to individual rights.

Congratulations! (4, Funny)

tnk1 (899206) | about a year ago | (#43798299)

Good job!

So, when do they start making a car that I can afford to drive?

Re: Congratulations! (3, Insightful)

Anonymous Coward | about a year ago | (#43798339)

The Tesla S is very affordable to drive. Many cents less per mile than a gasoline car.

Your problem is purchasing, not paying for the electricity.

Re: Congratulations! (5, Insightful)

tnk1 (899206) | about a year ago | (#43798385)

Except for the cars that I have stolen, I factor in purchase price with operating costs when I determine whether I can afford to drive that vehicle.

Re: Congratulations! (-1)

Anonymous Coward | about a year ago | (#43798479)

You said afford to drive. Driving is not the same as purchasing. Learn to say what you mean.

Re: Congratulations! (0)

Anonymous Coward | about a year ago | (#43798517)

Split hairs much?

Re: Congratulations! (4, Funny)

Mitchell314 (1576581) | about a year ago | (#43798535)

Some people are bald, you insensitive clod.

Re: Congratulations! (-1, Troll)

AK Marc (707885) | about a year ago | (#43798869)

The problem is redundancy isn't sufficiently punished. "I can't afford to drive it" vs "I can't afford it" Why say the first, when you mean the second. The inclusion of the redundant statement puts the stress on the wrong part. It's not splitting hairs when it was sloppy language that caused the issue in the first place. If he hadn't added emphasis on the cost "to drive", then there wouldn't have been an issue.

Re: Congratulations! (1)

tnk1 (899206) | about a year ago | (#43798553)

Unless I owned the car, simply driving it wouldn't necessarily mean that I had to pay for the electricity either, since you could assume someone else bought their own electricity for their own car. In which case it would be free, and clearly not the situation that either of us is discussing.

I presume that we can agree that some assumptions don't need to be spelled out in an informal conversation, or alternately, you can continue to be pedantic.

Re: Congratulations! (0)

Anonymous Coward | about a year ago | (#43798875)

Recognizing what you're actually having a problem with is accuracy.

You can try to excuse your sloppy speech by attacking my remarks as pedantry, but that'll just show how you'd rather waste time defending your imprecision than see what somebody else is talking about.

Driving a Tesla Model S is comparatively cheap. Owning one? Much of that is due to the other luxury parts.

Just wait till they scale out for a more common market segment.

Meanwhile, you lose out to the gas burning.

Re: Congratulations! (2)

immaterial (1520413) | about a year ago | (#43798493)

What, is North Carolina stopping us from stealing Teslas now too?

Re: Congratulations! (1)

Firethorn (177587) | about a year ago | (#43798525)

The Model S is normally cheaper than the luxury competitors it's placed up against, IE Mercedes S Classes, BMW 7 Series, and Audi A8s.

That doesn't mean that you can't find a gasoline vehicle with a lower TCO with the same driving patterns, but you're going to sacrifice 'luxury' for it.

Re: Congratulations! (1)

tnk1 (899206) | about a year ago | (#43798645)

Which will make me feel a lot better when I can afford a 7-series. Sometime next decade. Maybe.

Anyway, point being, he just paid back a loan which, in effect, created a luxury car company. I'm not saying it's a bad idea, and it may actually help push electric cars forward, but I think his comment was meant to be a little bit of a "take that" to people who don't like government contracts like this given out. And I can't help but noticing that he still hasn't produced something that even the upper middle class can easily afford.

I'm glad he paid back the loan, and I'm happy to see electric cars make progress (since I'd like one someday), but I'll join him in his victory dance when he does something with that public money that allows more average income people to afford his cars. Until that point, I'm still waiting to drive that car that I helped buy the factory for.

Re: Congratulations! (1)

drinkypoo (153816) | about a year ago | (#43798675)

Anyway, point being, he just paid back a loan which, in effect, created a luxury car company.

Well no. They created a car company. The next model which is being designed now is the normally-priced car. If they can stay in business long enough to build it, which seems likely, then we should see it roll out in a bit. We wouldn't have had to do this if the automakers had made EVs the first time around, e.g. during the EV-1 era... instead of flirting with them, then crushing them and declaring them undesirable, because they couldn't make service revenues on them. The two groups which stood to lose were auto dealers and Big Oil. Auto dealers depend on service revenues, and automakers are forced to sell through auto dealers.

Re: Congratulations! (1)

tnk1 (899206) | about a year ago | (#43798759)

I am sincerely looking forward to that next model being built and successful. If they can just get the range up a bit, it should be very successful. I've been looking forward to not using gas since before I knew what OPEC stood for.

Re: Congratulations! (1)

sgt scrub (869860) | about a year ago | (#43798711)

It sounds like you are doing it wrong. It makes more sense to send the expensive gas guzzlers to the chop shop and buy something economical.

Re:Congratulations! (2)

mozumder (178398) | about a year ago | (#43798373)

I'm more interested in how I can get a $465m government guaranteed loan for my random startup business?

Holy crap that's a lot of money! Most series A venture funding is only $1-5m..

Re:Congratulations! (-1, Troll)

larry bagina (561269) | about a year ago | (#43798421)

It helps if you're a minority like Elon Musk (African-American).

Re:Congratulations! (2)

multiben (1916126) | about a year ago | (#43798441)

Is that comment for real???! It also happens to help if you're one of the most successful and insightful businessmen walking the planet regardless of where you come from.

Re:Congratulations! (2)

Mystakaphoros (2664209) | about a year ago | (#43798537)

It helps if you're a minority like Elon Musk (African-American).

Is that comment for real???! It also happens to help if you're one of the most successful and insightful businessmen walking the planet regardless of where you come from.

(South) African-American. No racism here, though perhaps a little bit of where-in-the-world-is-your-accent-actually-from -ism.

Re:Congratulations! (4, Informative)

tnk1 (899206) | about a year ago | (#43798571)

Actually, that comment was sort of amusing because, while Musk is actually African, he's about as white as I am.

Re:Congratulations! (1, Funny)

Anonymous Coward | about a year ago | (#43798669)

Actually, that comment was sort of amusing because, while Musk is actually African, he's about as white as I am.

And how exactly are we supposed to know how white you are? You are just some random anon guy on the internet, doesnt exactly give away much

Re:Congratulations! (1)

Teancum (67324) | about a year ago | (#43798657)

Elon Musk really is African-American.... born in Africa as sure as anybody else on that continent. That ultimately he has more distantly European ancestors is where the comment flies in the face of reality and I doubt he claims he is "black" on racial profiles... but by definition of the term he deserves that "title" as much as anybody who is an immigrant from Africa.

On the other hand, this particular loan program was available to any American automobile company who bothered to apply. Both GM and Ford applied as well for the same program (and I think GM got some of the money too). That not too many people bother starting their own automobile manufacturing company in America is besides the point I suppose. Indeed I think it came in as a shock that Tesla even qualified for the program as it was really one of those earmarks intended to subsidize some research on the part of GM.... but the law was written in a generic manner so technically anybody could qualify if they happened to be making electric automobiles. Why Fisker didn't bother with the program should say volumes about that company too.

Re:Congratulations! (2)

GreatDrok (684119) | about a year ago | (#43798673)

"Good job!

So, when do they start making a car that I can afford to drive?"

You can afford to drive it - the cost of electricity per mile is far lower than the cost of petrol for the same distance. Your problem is you can't afford to *BUY* it. The good news is, those who can afford it are allowing the cost to come down as a result of mass production so the early adopters with deep pockets are subsidising the eventual more affordable versions for the rest of us.

My main problem with electric cars isn't the fuelling (yada yada, moving the pollution etc) but rather the guy in front. Queuing in a traffic jam is still a massive waste of time regardless of means of propulsion. Electric cars don't fix this. You need to get out of the whole concept of everyone having their own personal box on wheels and find more efficient means of moving people from A to B. The car isn't it and is a victim of its own success.

No, no (4, Funny)

Intrepid imaginaut (1970940) | about a year ago | (#43798301)

Electric cars will lead to nipples and other unamerican things.

Re:No, no (1)

dublin (31215) | about a year ago | (#43798359)

Hmm, you never watched Charlie's Angels or the Bionic Woman, did you? Can't think of anything more Armerican...

Re:No, no (1)

Intrepid imaginaut (1970940) | about a year ago | (#43798409)

Never had a wardrobe malfunction eh? Musk is the harbringer of nipples, mark my words! Cheery looking rosy ones, sultry dark slippery ones, weird puffy ones, those pointy-outy ones that could cost an eye if you move too quickly in cold weather, oh yes... /none too subtle jab at the good old cornfed mask the detractors tend to don

Re:No, no (1)

Austerity Empowers (669817) | about a year ago | (#43798511)

Well I for one welcome our new nipple overlords!

Re:No, no (1)

Anonymous Coward | about a year ago | (#43798859)

Mmmmmm, nippley overlord... suckle, suckle.

Re:No, no (1)

Artifakt (700173) | about a year ago | (#43798623)

Wonder Woman - she's both even more Amurikan and nipplier!

Re:No, no (4, Insightful)

girlintraining (1395911) | about a year ago | (#43798451)

Electric cars will lead to nipples and other unamerican things.

... Like paying back your government loans instead of yelling "Too big to fail! ahahahaaha..." and running to some tropical island to take daily wealth showers and drink out of gold-lined cups. :/ They should be commended... it's a decidedly unamerican approach to business. Fiscal responsibility? It's like an F-word in Congress.

Nice. (4, Insightful)

Nemyst (1383049) | about a year ago | (#43798305)

I think this sends an excellent message to naysayers: Not all American startups with DOE loans end up like Solyndra.

Bravo to Tesla, and let's hope the current trend continues. The US really could use some new blood in the automotive industry.

Re:Nice. (3, Insightful)

GodfatherofSoul (174979) | about a year ago | (#43798319)

And, Solyndra ends up like Solyndra because we lost a subsidy battle with China.

Re:Nice. (4, Informative)

morcego (260031) | about a year ago | (#43798477)

And, Solyndra ends up like Solyndra because we lost a subsidy battle with China.

I'm not sure if you are reporting the fact, or complaining about it. If you are just reporting it to provide accurate information, kudos for you. Not only are you are well informed, you have more common sense than most people I know (or know of), and please stop reading here :).

I'm forced, however, to remember anyone who complains about "subsidy battles" that the USA is huge on subsides, and wages this battle against many countries, several times winning it. Orange/orange juice and corn are quick examples.

Unfortunately, subsidies are a necessary evil, specially since they are, many times, not a tool to fight an external competitor, but to regulate the internal market. In this, no country is blameless.

Re:Nice. (2, Insightful)

ShanghaiBill (739463) | about a year ago | (#43798499)

And, Solyndra ends up like Solyndra because we lost a subsidy battle with China.

And we lost that battle because we were subsidizing a company using the wrong technology. Governments are terrible at "picking winners" and even worse at cutting their losses rather than shoveling good money after bad. If Solyndra had a good chance of success, they would have been able to attract private funding, and wouldn't have been asking for taxpayer money in the first place. Subsidizing basic R&D often makes sense. Subsidizing manufacturing does not.

Re:Nice. (1)

DogDude (805747) | about a year ago | (#43798627)

I don't hear anybody complaining about the Fed bailing out GM...

Re:Nice. (0)

Anonymous Coward | about a year ago | (#43798807)

Have you got your fingers in your ears? I'd bet half of slashdot won't ever buy a GM car again (or has claimed they won't), because of it.

Re:Nice. (4, Interesting)

Alomex (148003) | about a year ago | (#43798647)

Governments are terrible at "picking winners

[citation needed]

DOE funds had a better rate of return than Mitt Romney's investment fund as per widely reported figures during the election.

Re:Nice. (1)

Anonymous Coward | about a year ago | (#43798763)

Yeah, no shit. Government is great at not only picking winners, but creating them. And not just companies, but entire industry sectors. And not just the US government, but other countries the US is competing against who are helping to nurture baby industries that short-term minded private investors are ignoring or can't support.

Re:Nice. (0)

Anonymous Coward | about a year ago | (#43798771)

That's because it's not really an investment fund. It's a scheme to leech the values out of companies and leave behind debt-laden corpses.

Re:Nice. (1)

dbIII (701233) | about a year ago | (#43798663)

Bankers typically know fuckall about the industries they are financing so can't tell something with no hope from a sure success. All they can do is look at similar ventures from the past and hope, which means people doing something new can usually forget about bankers. Venture capitalists on the other hand sometimes know a bit about a specific industry, but they've been rare since before 2008.

Re:Nice. (1)

matfud (464184) | about a year ago | (#43798765)

Now turn that around and ask why would they try for private funding and loss of equity when the public funds were available at better rates.
In this case winning or losing was more about gross markets then invention or ingenuity. Perhaps they are a bad example but it is not as simple as let the market sort it out as this is a global market and your american (I think) ideas of the market are not the same as anyone else's. In this case China.

Re:Nice. (1)

Myopic (18616) | about a year ago | (#43798873)

Governments are incredibly good at picking winners. Government does a much better job of it than, say, the market does.

Re:Nice. (0, Troll)

dublin (31215) | about a year ago | (#43798405)

I think this sends an excellent message to naysayers: Not all American startups with DOE loans end up like Solyndra.

No, but the reality is that way too many of them do.

I work in the green energy industry now (and used to work in the oil industry). The "green" industry is far, far slimier (more corrupt)... Maybe this is because the oil industry evolved from the same people who ran the cattle industry, where a man's word was his bond and multi-million dollar deals were made on a handshake. Integrity was everything, and if you lost that, you simply weren't in the business anymore.

Government (and "free governemtn money") corrupts pretty much everything absolutely...

Re:Nice. (2, Insightful)

Anonymous Coward | about a year ago | (#43798509)

They aren't all going to be winners. Investment has some risk associated with it.

Tesla is a good example of a winner. Not only are they repaying their loan early, they've developed technology that electric drive vehicles use.

Everyone benefits (Tesla makes money, we get electric cars, the planet gets more efficient vehicles) , and it's because the government was willing to put money up where risk-averse private companies failed to do so.

Re:Nice. (0)

Anonymous Coward | about a year ago | (#43798583)

So, 4 out of 23 (investments in the same program) is way too many?

Re:Nice. (0)

Anonymous Coward | about a year ago | (#43798599)

Oil industry? Integrity? You're joking, right? The industry with a history rife with collusive price fixing, rampant bribery, environmental devastation, shitty working conditions, throwing their weight around to overthrow governments, etc? Yeah it's quite the industry full of people with the utmost integrity.

Re:Nice. (1)

Em Adespoton (792954) | about a year ago | (#43798721)

Oil industry? Integrity? You're joking, right? The industry with a history rife with collusive price fixing, rampant bribery, environmental devastation, shitty working conditions, throwing their weight around to overthrow governments, etc? Yeah it's quite the industry full of people with the utmost integrity.

Sounds like they've got integrity to me, based on your examples. Maybe you need to look up what "integrity" means....

The oil industry can be counted on to operate in the manner you described, and everyone in the industry knows what's what and who's who. There are very few variables (hence the integrity). The Green energy industry, however, is one where anyone with a new idea can undercut the others and make a quick buck at the expense of everyone else. There are very few defined standards or processes, and virtually no price fixing (as everything's so new that the price is already inflated).

Now if you're talking about sociological or environmental integrity, they're both pretty bad taken as a whole.

Re:Nice. (4, Insightful)

sneakyimp (1161443) | about a year ago | (#43798603)

Maybe this is because the oil industry evolved from the same people who ran the cattle industry, where a man's word was his bond and multi-million dollar deals were made on a handshake. Integrity was everything, and if you lost that, you simply weren't in the business anymore.

Oh GAWD please stop with the cheesy platitudes and the pining away for older, ostensibly better times. That is such a tired trope. Surely you recognize that this is a ludicrous and unprovable statement based on no evidence whatsoever?

Government (and "free governemtn money") corrupts pretty much everything absolutely...

And surely you recognize that this is a contradiction of your previous statement? The oil industry enjoys enormous tax breaks and subsidies [forbes.com] . Are those billions in subidies not government money? Is the oil industry somehow immune to corruption because of its mythical birth among cattle barons?

Re:Nice. (0)

Anonymous Coward | about a year ago | (#43798465)

I think this sends an excellent message to naysayers: Not all American startups with DOE loans end up like Solyndra.

This naysayer?

But don't forget, you put $90 billion, like 50 yearsâ(TM) worth of breaks, into--into solar and wind, to Solyndra and Fisker and Tesla and Ener1. I mean, I had a friend who said you don't just pick the winners and losers, you pick the losers, all right? So this--this is not--this is not the kind of policy you want to have if you want to get America energy secure. -- Mitt Romney

Re:Nice. (5, Insightful)

Jah-Wren Ryel (80510) | about a year ago | (#43798485)

I think this sends an excellent message to naysayers: Not all American startups with DOE loans end up like Solyndra.

In fact, of the 23 companies that received funding under the same program as Solyndra did, at least 19 of them are still in business - that's an 83% success rate. [cnn.com] When you factor in the fact that these were all loans that the free-market was too risk averse to take on itself, that number is pretty fantastic. Most venture capital funds are lucky to have a 10% success rate.

Re:Nice. (1)

turp182 (1020263) | about a year ago | (#43798665)

Link please, I would like to be informed but my kids have my attention for the time being, and my memory will lose the impetus to investigate after bedtime...

Re:Nice. (1)

Myopic (18616) | about a year ago | (#43798883)

Is the link he provided not good enough?

Re:Nice. (1)

iceperson (582205) | about a year ago | (#43798573)

Unfortunately enough do that it's news when they don't...

If only GM paid us back (0)

Anonymous Coward | about a year ago | (#43798839)

The taxpayers of the United States thank you, Tesla, and Elon Musk in particular. Do you, by any chance, know someone from GM that we can talk to about repayment of their debt?

http://www.fool.com/investing/general/2013/05/19/how-much-gm-truly-stole-from-american-taxpayers.aspx

Well, that proves it (1)

ArcadeMan (2766669) | about a year ago | (#43798307)

There's no market for electric cars. - Oil companies CEOs.

Peter paying ... no ... (1)

Anonymous Coward | about a year ago | (#43798429)

The funds were generated by Tesla through a recent sale of their stock, worth close to a billion dollars.

This is a case of robbing Peter ... I mean, suckers to pay Paul.

Re:Peter paying ... no ... (0)

Anonymous Coward | about a year ago | (#43798545)

Shhh...I want to sell some shares to these "bigger fool" slashtards; don't mess this up for me.

Re:Peter paying ... no ... (0)

Anonymous Coward | about a year ago | (#43798555)

almost as much as instagram eh!?

Un-American (0)

Anonymous Coward | about a year ago | (#43798315)

How is the government supposed to make interest on the loan if they repay it early?

Re:Un-American (1)

p00kiethebear (569781) | about a year ago | (#43798335)

I believe the summary says they paid off all the potential interest as well. Unless they meant they only paid off the 2 and a half years of interest already accumulated. Can anyone clarify?

Re:Un-American (1)

godrik (1287354) | about a year ago | (#43798341)

The same way banks do. By lending money to somebody else.

Fiberweed (1)

DFurno2003 (739807) | about a year ago | (#43798325)

Each one is made of Fiberweed, only way they made so much money. Possibly Fibercoke also.

Yay! Now if only (1)

JohnnyGTO (102952) | about a year ago | (#43798351)

I could afford one...

Re:Yay! Now if only (0)

Anonymous Coward | about a year ago | (#43798481)

I'd be happy if charging stations were as ubiquitous as gas stations. As it is, there's like one plug at a Walgreens.

No comment (1)

Anonymous Coward | about a year ago | (#43798365)

from either Rush Limbaugh or the New York Times on this one.

Thanking tax payers, excelent (1)

Anonymous Coward | about a year ago | (#43798389)

At least there's one person that understands where our government gets their money and that it doesn't just grow on trees.

Re:Thanking tax payers, excelent (1)

LBt1st (709520) | about a year ago | (#43798475)

Why wait for a tree to grow it when you can just print the stuff?

Re:Thanking tax payers, excelent (1)

Em Adespoton (792954) | about a year ago | (#43798743)

Why wait for a tree to grow it when you can just print the stuff?

Why print the stuff when you can do it electronically? Think of the carbon waste when you burn through your money!

Electric cars are just not going to take off.... (1, Informative)

mark-t (151149) | about a year ago | (#43798435)

.... until their prices become comparable in purchase price to an otherwise equivalent gas-powered car, instead of paying a premium for them that makes them more of a status symbol of luxury than a practical automobile.

Re:Electric cars are just not going to take off... (5, Insightful)

Anonymous Coward | about a year ago | (#43798497)

This is exactly what the horse and buggy industry said when the first cars came on the road. "Ha! Petrol! Where do they think they will get it, once on the road?" and "People already have horses - who's going to want to buy an automobile when the buggy is so much cheaper??"

Re:Electric cars are just not going to take off... (2)

mark-t (151149) | about a year ago | (#43798729)

Indeed... and it wasn't until the price actually *DID* come down that people really started buying them in any quantity.

Re:Electric cars are just not going to take off... (1)

morcego (260031) | about a year ago | (#43798505)

.... until their prices become comparable in purchase price to an otherwise equivalent gas-powered car, instead of paying a premium for them that makes them more of a status symbol of luxury than a practical automobile.

Gas cars where like this once. The market tends to regular itself, even if it takes some time. Unless the government fucks it up, specially the USPO. Lets just hope that is not the case.

Re:Electric cars are just not going to take off... (1)

sneakyimp (1161443) | about a year ago | (#43798655)

Actually, battery-powered cars sort of dominated the automobile industry at first. Nobody seems to realize this.

Quite the contrary! (4, Informative)

goruka (1721094) | about a year ago | (#43798529)

I think history has proven this again and again I believe that the technology for electric cars for everyone is not quite there yet, so focusing on the luxury market segment they can generate enough demand to have the possibility to actually work on this technology and, eventually, drive the prices down.
It's the same thing that happened with smartphones and other technologies, once the acutal product is there and proves to be profitable, technology advances much more strongly in that direction, helping to drive prices down and get more customers and markets.

Re:Electric cars are just not going to take off... (0)

Anonymous Coward | about a year ago | (#43798539)

The margins are much higher on a luxury car. It makes sense for them to target luxury vehicles initially, as early adopters are likely to be more affluent. If they started with a $30,000 car they wouldn't be able to keep up with the initial demand anyway. With their new-found piles of money, they'll be able to focus their efforts more on the mass market.

Re:Electric cars are just not going to take off... (1)

Anonymous Coward | about a year ago | (#43798591)

You know, it wasn't until the Ford Model T that automobiles in general were considered affordable, that was in 1908. The first gasoline powered auto dates to about 1885. That is 23 years between the availability of gasoline cars and the affordability of gasoline cars. Why would you think that it would be different for modern electric cars? Give it a little time.

Re:Electric cars are just not going to take off... (0)

Anonymous Coward | about a year ago | (#43798611)

As mentioned elsewhere, the technologies developed by Tesla are being licensed to pretty much everyone who makes vehicles with electric/hybrid drives. You may not buy a Tesla, but if you by a hybrid or EV you're buying a car that was created in part by Tesla's research and development.

I'm guessing that Tesla saw the high end, high profit, low volume market was their best opportunity to make money selling their cutting edge, brand-new-tech cars.

Re:Electric cars are just not going to take off... (4, Informative)

voidptr (609) | about a year ago | (#43798631)

The Model S is comparable in purchase price to an otherwise equivalent gas-powered car. It's a large, high performance luxury sedan, and other cars of that size, horsepower, and trim level run $75 - $100k as well.

Re:Electric cars are just not going to take off... (0)

Anonymous Coward | about a year ago | (#43798667)

.... until their prices become comparable in purchase price to an otherwise equivalent gas-powered car, instead of paying a premium for them that makes them more of a status symbol of luxury than a practical automobile.

BMW, Audi, Merc., etc., sell plenty of vehicles in the same price range. Tesla doesn't have to "save the world" themselves, they just have to raise the bar and show others that it's possible (and make a profit doing so). Others will follow.

Re:Electric cars are just not going to take off... (1)

godrik (1287354) | about a year ago | (#43798695)

I purchased a car recently, and purchase price was not my concern. Total cost of ownership, convenience were my concern.

Correction: Tesla Motors takes billion dollar fee (-1)

Anonymous Coward | about a year ago | (#43798447)

1. Government taxes the public to create a loan.
2. Loan goes to a scam artist who uses it to pump up stock value.
3. Scammer pays back loan after dumping overinflated stock to same public.

Side effect is 5000 overpriced electric cars drive around creating stress on our grid.

Insane! (0)

Anonymous Coward | about a year ago | (#43798455)

Last quarter they made $11 million, the first time they turned a profit. However, they just raised $1 bn. and have a $10 bn. market cap according to google finance. I hope this isn't a Pets.com. Even if the company is viable, $10 bn. market cap means they need to get to the scale of almost a million car sales per year relatively quickly (unless they are just way more profitable than the Japanese and the big three.

Re:Insane! (0)

Anonymous Coward | about a year ago | (#43798569)

The Pets.com sock puppet and Elon Musk do have an uncanny resemblance!

That's pretty cool (2)

50000BTU_barbecue (588132) | about a year ago | (#43798501)

I'd like an electric car. The one thing about living in Quebec is relatively affordable hydroelectricity. However I wonder how an electric car will fare in winter when 33% of the battery will go to heating. At least that's the number they mentionned for the electric buses they're trying in Laval, you have to almost cut the summer range in half for winter. The motors work harder too to cut across snow.

Re:That's pretty cool (5, Informative)

kenaaker (774785) | about a year ago | (#43798605)

I leased a Focus Electric and drove it through about half of this winter in Minnesota. I initially was only going to drive it through the easy months, but this winter gave me examples of almost every sort of ugly possibility.

The car did well enough through all the ugliness that I'm going to use it year round. The range did drop off dramatically on the days when it was about 0 (F). But my commute is only 7 miles, so there was really no problem with using it for getting to work. The other thing that helped was that the car could be warmed up while it was still plugged in. I was also going to get a stage 2 charger installed, but with my typical daily use, the car is fully charged off 110 after midnight. I don't think I'll get a stage 2 charger until I get a second electric.

Re:That's pretty cool (3, Interesting)

s122604 (1018036) | about a year ago | (#43798801)

I've always thought what they could do is incorporate a small, propane powered generator, like say around 2.0KW. To get an estimate of the size, honda makes a 2kw one that is about the size of a small suitcase, and weighs around 50lbs.

Maybe make it a modular add-in that you can take in and out of the trunk. The generator is way too small to actively power the car, but it could be ran so that the heat of the motor could be used to warm the cabin (like all gas vehicles do today) when it is extremely cold. The electricity it provided would extend range much, but it would keep you out of resistive heat, which is a real waster.. It would also provide a means of emergency charging for a stranded vehicle

I'd make it propane, because in a quality tank, the stuff lasts virtually forever, and it burns really clean.

Maybe they missed the point of the loan... (1)

drcheap (1897540) | about a year ago | (#43798581)

While I think it's awesome that they did this, and it sends a powerful message, there seems to be another implied flaw in the plan...

Perhaps the idea of the gub'mint giving them this loan was that it was to offset their startup/r&d/production costs in the early years before they were able to get to full on mass production (I mean large scale, like the level of other established & successful auto manufacturers). So much that with that offset, they would have been able to offer their vehicles to the public at "mass production prices" even though they weren't at that point yet. Doing this would have made their volume much higher, and thus they could have attained actual "mass production" levels quicker, at which point they operate cheaper, and thus make higher margins required to pay back the loan at (or closer to) the original term.

So in this scenario everyone wins...
1) The customer pays less
2) The company makes more sales and better establishes their brand & product with a larger market share
3) The government earns more $ on loan interest

But instead...
1) The early adopters paid more, subsidizing an early loan repayment
2) The company has less market penetration due to high prices
3) The government misses out on over half the interest revenue

But still, I can't blame them for wanting to eliminate what was probably the largest liability on their books.

Re:Maybe they missed the point of the loan... (2)

turp182 (1020263) | about a year ago | (#43798703)

Maybe, but it's conservative spending and accounting that allow for such early payments.

I appreciated the bullet points, and the government shouldn't be worried about future interest payments if it receives the provided capital ahead of schedule. At least they got paid back.

Re:Maybe they missed the point of the loan... (0)

Anonymous Coward | about a year ago | (#43798705)

Except that they actually paid total interest on the loan, so the govt missed out on nothing, early adopters were going to pay more regardless, and the they raised the money by issuing stock, not charging more.

Re:Maybe they missed the point of the loan... (4, Interesting)

Teancum (67324) | about a year ago | (#43798745)

Tesla doesn't seem to be having much of a problem in terms of market penetration because their factory has barely been able to keep up with the people willing to simply purchase them over the internet or through convoluted sales venues that make the customers travel across several states or even from other countries and continents in order to make a purchase. Only recently has the delay from making a purchase to getting delivery even approached the logistical limits of the Tesla supply chain rather than dealing with the customer backlog and even paying other customers to "move to the front of the line" to get the delivery earlier.

Simply put, if Tesla is charging what the market can bear on their product, they are simply practicing capitalism... something I didn't think was a crime in America.

As for the government missing out on interest income, I think they are going to more than make up for that loss through corporate income taxes and taxes on the wages of the Tesla employees.... and federal excise taxes on the vehicles themselves. It might be in some weird theory a slight loss to the government, but not much. What it really did was give Tesla some short-term operating capital that allowed the company to be able to hire the employees at the old NUMMI plant at a time when they weren't selling cars.

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