









^^^ I'm glad that you brought up the Tesla Motors IPO. Arguably, Tesla Motors is the perfect poster child for illustrating the 'true' economics of 'green energy' companies.
- The company was only able to get off the ground due to multiple injections of state and federal R&D grant money. Recently it has also received injections of 'corporate' car company money ... but where GM and Chrysler are concerned / electric vehicle R&D money is concered, this arguably amounts to more taxpayer money channeled through different 'pockets'.
- The functional success of the product is entirely due to the exploitation of extremely 'brown' offshore activities ... in this case the mining and refining of rare earth metals in china that are necessary for the electric motors and batteries ( utilizing very low pay workers operating in abominable conditions of worker safety / environmental contamination )
- the hoped for financial success of the product is totally dependent on the continuation of federal and state tax credits for future vehicle buyers ... which in blunt terms amounts to other taxpayers footing 20%-30% of the retail price of this 100% electric vehicle. It is also heavily depedent on a 'cheap' Chinese Yuan versus US dollar exchange rate.
And even with all of the above, actually purchasing an available Tesla model today involves coughing up some $80,000 ( with the ~$20,000 balance being borne by other taxpayers ). It is also extremely probable that another $30,000 cost for battery pack replacement and disposal will become necessary within about 3-4-5 years depending on how far the vehicle is actually driven and how frequently it is actually driven.
This makes the Tesla vehicles suitable for just one market ... rich 'environmentally conscious' Americans who are willing to spend this kind of money on a politically correct 'toy' of limited usefulness for serious transportation ( 200 mile range, no heat, no A/C ) - while also buying and maintaining a conventional vehicle for serious transportation needs.
Tesla's own marketing people essentially acknowledge this, since their dealer network has been limited to a very few cities that also have a significant number of top 1% earner residents. It is indeed possible that Tesla can be financially successful marketing to this 'niche market' ... against competition from Maserati, Porsche etc. or simply as a technologically sexy, politically correct new 'toy' to be added to an already existing 'stable' of vehicles.
However, the bigger question that someone needs to ask is whether or not Tesla Corporation, the mostly 'rich' investors in Tesla's IPO shares, and the rich purchasers of Tesla vehicles, should be the recipients of these very significant amounts of taxpayer moneys ... moneys collected from other Americans who don't earn enough to ever be able to purchase a Tesla vehicle for themselves even if the promised price reductions to the $50,000 ballpark eventually materialize.
Yes Tesla Corporation does provide a comparative handful of 'white collar' jobs at its plant in California. However, if someone were to add up the costs borne by California taxpayers to 'support' Tesla Corporation ... from tax exemptions to grants to tax credits for California Tesla buyers ... the actual cost to California taxpayers per newly created 'white collar' job is almost guaranteed to exceed the economic contribution of the person working at that 'white collar' job.
But hey Tesla makes for great news coverage !
!
Last edited by Melonie; 06-30-2010 at 02:15 AM.





Whatever environmental impact there is from the materials used for Tesla's motors and batteries is very tiny compared to the BP disaster in the Gulf.
Your cost figures are only for Tesla's first model. They will becoming out with additional models which will cost less.
The US government has subsidized the start-up of numerous industries, such as jet engines, computers, and the internet, that eventually became commercially viable.





^^^ and 100% electric vehicles will similarly stand a chance of being truly economically viable when they are 100% produced in, and imported from, China ! Maybe not though, since China just increased their minimum wage to the equivalent of US$0.75 an hour ( = US$120 a month )!
But in the meantime, even if Tesla's 'dream' of a $50k electric vehicle actually comes to pass, it's still going to be an impossible sell to middle class Americans ... who can barely afford $20k gasoline powered vehicles. And unlike Toyota's Prius, Tesla has no parallel product line of gasoline powered vehicles onto which it can 'shift losses' from its electric vehicle production.
Social policy aside, from an investment standpoint, buying Tesla stock based on the assumed continuation of US gov't subsidies is very likely to follow earlier 'green energy' company stocks ... for example ethanol's 'poster child' company Pacific Ethanol ...
... but hey, what do I know ?





Toyota doesn't need to "shift losses" to gasoline powered vehicles. Their hybrid vehicles are profitable.
http://www.popularmechanics.com/cars/news/2693156
(snip)
They also say that they have made a profit on every hybrid since the ’04 Prius.
(snip)
and they're able to do this without cheap Chinese labor.
Here's what you said on 04-08-2010, 08:49 AM:
http://forum.stripperweb.com/showthread.php?p=1922573
well, here's one possibility ...How can there be prosperity with growth ?
- drill, baby, drill ... every dollar's worth of domestically produced oil and gas adds to US prosperity by subtracting from the US balance of trade deficit.
I am so still going up to Seattle to test-drive one.
If I had a warning sticker, what would it say?





I had a chance to test-drive the original roadster in New York ! It's an utterly fantastic car ! The two most striking things about it were the absolutely steady rocket-like acceleration ( no gear shifting manual or automatic ), and the lack of engine noise. It's truly a massive engineering achievement.
My only problem with the whole issue is that billions of dollars of taxpayer money have essentially been used to develop a clear weather dry roads summertime 'toy' for the uber-rich. If and when this technology gets 'mainstream' enough to spread beyond that niche, unfortunately the primary beneficiary will not be Tesla it will be lower cost importers. Just one more case of American developed technology pioneering a new line of products, but the 'fruits' of that development are actually reaped by low cost foreign importers.
I'll try to emphasize this point historically ... what ever happened to Philco, who pioneered television - or Ampex, who pioneered video recording - or Zilog, who pioneered cache microprocessors - and especially Parametrics, who pioneered the AC inverter technology that is at the heart of the Tesla electric vehicle ? However, early investors in these companies voluntarily chose to 'roll the dice', and 'won' or 'lost' accordingly. But in Tesla's case it is a different story since the 'majority investor', in terms of total cash equivalent contributions at least, is actually the US Taxpayer !
Fuzzz, your problem with the car in northern climates will be that it doesn't have any effective internal heating ... because there is no waste engine heat to reclaim for this purpose. Thus actually driving this car in the winter would require more battery drain to heat the passenger compartment than to power the car's electric motor !
And if anyone wishes to truly dispute my point that Toyota, Honda, GM and any other company producing hybrid / all electric vehicles is NOT performing internal cost shifting to their coventional vehicle lines, you better show me more than a Popular Mechanics article based on info from a vested interest company representative.
~
Last edited by Melonie; 07-02-2010 at 02:51 AM.





Where did you get the figure "billions of dollars of taxpayer money" from? Is this something else you just made up? I doubt that there has even been billions of dollars spent on the development of the Tesla.
There's plenty of other articles showing hybrids are now profitable. According to this article, Honda and Toyota are making over $3,000 profit per hybrid sold. That's more than many gas-only powered vehicles.
http://www.dailytech.com/Honda+Toyot...ticle15002.htm





^^^ actually, a responder at your very same link already debunked the article's technically correct but extremely misleading stat ...
(snip)"Sorry if you think I’m cranky because I would rather read articles that are based on solid information instead of reading articles that bend the truth so far that even the author has to put disclaimers into the main body.
quote:
Regardless of if that number is accurate, the interesting thing to me was this...
This piqued my interest so for the fun of it I followed the links back to try and get to the source info (unfortunately I only made it back through two “green” websites before I hit the newspaper website that requires a membership) it is interesting to see how the reality keeps getting distorted each time a new website copies the info it links to.
For instance if you hit that “indicates” link you go to the “Autobloggreen” website (don’t think they are going to have a slightly biased outlook on hybrids do you?) Never the less they have this to say:
quote:
According to the Japanese newspaper Nikkei (via Green Car Congress), each hybrid that Honda and Toyota sell earns the respective company about $3,100 in profit. Of course, Toyota also sells the Lexus hybrids, which bumps up the average, and the numbers are calculated using 2008 sales of the second-generation Prius, but this is still good news for the Japanese automakers.
Fair enough. Now let’s follow that link on their page labeled “Green Car Congress.” They say:
quote:
The Nikkei report said that Toyota appears to have earned gross profits of around ¥100 billion yen (US$1 billion) on its sales of second-generation Prius hybrids last year. Toyota’s gross profit margin on the sales of the next-generation 2010 Prius are projected to be in the single digits in the first year.
Now a look at what that webpage actually quoted (or possibly cheerypicked) out of the original Nikkei article:
quote:
The gross profit earned on the Insight is still low when factoring in the large R&D costs involved in its development. However, the profit margin on its hybrid operations has risen to the level where Honda can count on it to generate the fourth-largest revenue stream behind its luxury, midsize and small car operations.
So now you have the source article saying that Honda’s continued efforts at refining and improving on its hybrid design will now bring it solidly into last place as far as its automobile sales are concerned (I guess the Honda Hybrid guys can finally can stop taking heat from the lawn mower engine guys about profits at the annual picnic at least…) and you have Toyota figures that benefit from the horridly overpriced Lexus hybrids as well as old figures of the previous Prius that didn’t have to price match the new Insight, further they expect the new Prius to have single digit profit margins! Then you have a Dailytech article twisting it into saying that hybrids are a “cash cow.”
…Color me unimpressed with the integrity of the Dailytech article."(snip)
Perhaps unwittingly, this article also makes reference to the existance of at least one 'cost shifting' mechanism being employed to make overall hybrid / electric vehicle finances appear better than they otherwise are. That 'cost shifting' mechanism is the pooling of corporate 'R&D costs' which are assessed across all vehicle product lines. In point of fact, perhaps 70% of total R&D costs may be due to hybrid / electrical vehicle development, but perhaps only 10% of total R&D costs are actually assessed to hybrid / electric vehicles since they only comprise 10% of total production.
I would also add that the 'profit margin killing' expensive components of hybrid vehicles, i.e. the batteries, rare earth magnet electric motors, power control electronics etc. are far smaller and far less expensive than similar but much larger components required when a vehicle is 100% electric powered as is the Tesla. Additionally, a large number of 'profit creating' components of hybrid vehicles, i.e. the gasoline engine and transmission, are no longer present when a vehicle is 100% electric powered.
and in regard to grant money, you might start here ...
(snip)" Bloomberg’s mysterious “people familiar with the plans” say Ford, Nissan and Tesla will all dine upon loans from the “original” bailout package: the $25 billion feast created by the 2007 energy bill. The loans were intended to “help automakers boost fleetwide fuel economy.” In February, the DoE said they’d received 75 applications, totaling $38 billion. According to Bloomies, Ford, Nissan and Tesla are the first to get the handouts loans.
Ford’s asking for $5 billion, including almost a half billion to convert a Michigan factory that builds SUVs to build small cars. Tesla wants $450 million to develop its Model S and “expand a drive train business that sells parts to other automakers.” Nissan (the only foreign-based automaker to apply for the loans) said they’d requested “an unspecified amount,” but in a separate story Bloomberg states Nissan plans to start building electric cars in their Smyrna, Tennessee, plant, and that can’t be cheap to get going."(snip)
And beyond the DOE grant money, you can add up all of the $20,000 tax credits handed out to Tesla buyers by the federal gov't, plus ~$10,000 tax credits handed out to Tesla buyers by state gov'ts, plus assorted state and local gov't grants from tax abatements to 'site prep' cost absorptions to 'worker training' programs. So yes, we're definitely talking about more than a billion US taxpayer dollars being directed towards Tesla Corp.
~
Last edited by Melonie; 07-03-2010 at 03:20 AM.





You haven't done anything to show Toyota's and Honda's hybrids aren't profitable. Toyota is planning to increase production of the Prius to 1 million in 2011 and is also planning to add another 10 hybrids to its existing lineup in the next few years.
http://theweeklydriver.com/2010/01/1...-to-1-million/
Do you really think Toyota would increase production of a vehicle that is not profitable to 1 million a year?
The approximately $450 million Tesla is getting from the government to subsidize its S-Car is a loan, not a subsidy.
http://www.reuters.com/article/idUSTRE65R5EI20100628
"To build Model S at a Fremont, California assembly plant abandoned by Toyota will require the company to meet tight deadlines under the watchful eye of the U.S. Department of Energy, which has subsidized Tesla with $465 million in loans."
If the total tax credits for the Roadster comes out to $30,000 per vehicle, the total subsidies for the approximately 1,000 vehicles sold so far comes out to around $30 million. This isn't anywhere near the billions of dollars in subsidies that you made up.





^^^ You miss the point in regard to the previous history of gov't 'loans' to automakers. As exemplified by GM recently repaying one such loan with gov't funds from a different 'pocket' ( see ), a gov't loan is only a loan if A. it is actually repaid, B. it is repaid using funds generated from profitable private sector business activities, and C. if the future profits generated from those private sector business activities are not gov't subsidized. Otherwise you're just talking about US taxpayer money from different sources 'sloshing' back and forth.
So far, on an 'apples to apples' basis, there are no other mainstream 100% electric vehicles out there to allow a valid analysis re cost shifting. The Chevy VOLT is probably the closest analogy ...
(snip)"All we know is that Lutz said the following: "We're being conservative on battery life. For our cost calculations we're assuming each car will need a replacement during the warranty period." original source:
That certainly doesn't suggest a percentage - the straightforward interpretation is 100% replacement.
GM is being ultraconservative on design - they're using 50% depth of discharge, where Tesla is using 100%, even though GM's cell chemistry has about 10x the cycle life in bench tests (at any given depth of discharge). They're assuming 2 battery packs during the life of the warranty, where Tesla is assuming 1 (of course, the warranty is longer, but that's GM's (conservative) choice).
There's no way this car can cost $40k to produce, unless they're using very, very unusual ways of applying R&D overhead and warranty costs. Heck, the Prius also has 2 (more complex) power-trains, and it costs roughly $20k less to produce than the $40k figure. The battery, in volume, should cost far less than $10K, so where does this premium come from?? The answer: GM is front-loading R&D costs, and exaggerating warranty costs (snip)
^^^ which leads us full circle back to GM's option of potential 'cost shifting' via R&D costs and 'warrantee' costs for the Chevy VOLT being averaged down by pooling with corporate R&D and corporate 'warrantee' costs involving conventional vehicles and less electrified hybrid vehicles. Tesla has no such option since all they are planning to produce are 100% electric vehicles.
Would someone pleeeeease tell me HOW we are going to generate all the electricity needed to recharge these unaffordable electric cars ? Nuclear ? Burn more coal ? Wind ?
Let's assume arguendo that electric cars can be made affordable for the American middle class. We still have to generate the power needed to recharge them. It seems to me that without more nuclear and wind, we are just trading one set of carbon emissions for another.
While letting a lot of wealthy , environmentally concerned people feel a lot better about themselves. Which is of course the most important thing for them.





Actually, coming up with additional generation capacity is a 'second stage' issue. The immediate issue is how electric utility companies are going to get sufficient electricity into garages to recharge electric vehicles. I once posted in an old thread a gasoline versus electricity energy analysis ... which basically showed that recharging a 100% electric car amounts to the equivalent electrical load of running a 230v electric dryer for 6 hours overnight. At present, electric utility companies neighborhood substations, pole lines, pole mounted transformers etc. are sized based on the assumption that only a couple of houses in the same neighborhood will be running electric dryers at the same time ... and that the electric dryer load will only be present for a single hour. When you suddenly have 6 electric vehicles in the same neighborhood all trying to recharge during the same 6 overnight hours, all of a sudden everyone's lights go dim, pole lines start melting, and neighborhood substations start to go kaboom.Would someone pleeeeease tell me HOW we are going to generate all the electricity needed to recharge these unaffordable electric cars ? Nuclear ? Burn more coal ? Wind ?
Yes it would be possible for the electric utility to upgrade their hardware to handle 6 electric vehicles in a neighborhood being charged during the same sustained overnight hours. However, the likely $100,000 dollar cost of doing so is not going to be 'eaten' by the electric utility. It will either be paid for via presenting each of the 6 electric vehicle owners a bill for $17,000 in order to 'install' their electric vehicle charger, or more likely it will show up as a $4,000 time value general rate increase for each of the 25 households in the neighborhood - meaning that those electricity customers who do not own / cannot afford electric vehicles will wind up funding additional 'back door' subsidies for those who do !





(snip)"Another day, another day of endless pain for investors in the "story" IPO of the year, for which positive net income is only an irrelevant side factor and to be ignored (just ask Andrew Tilton, who sees a 99.3% probability the company will make its investors rich to quite rich sooner or later). In the meantime, if you bought the stock as recently as 5 days ago, you are now down 50%"(snip)
from
Fortunately at least, when people who place creedence in mainstream media's economic 'koolaid' about private sector financials, it is they who must personally 'pay the price'. Unfortunately, when the same people place creedence in mainstream media's economic 'koolaid' about public sector financials, EVERYBODY must 'pay the price' !
~
Last edited by Melonie; 07-07-2010 at 09:11 AM.
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