Elon Musk as Orren Boyle
This is what happens when government gives a "visionary" company subsidies and tax breaks in return for promises of job growth and revenue.
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I grew up in a small town (20,000) nearest large city was more than 100 miles away. Didn't stop a local boy from getting the Feds to subsidize his idea for a small airline to provide needed air service and jobs for the local people. Always sold the idea that his failing business was doing us a favor so we didn't have to drive to a big city for air travel. The paper used to report how much he was receiving in subsidies every year to make his idea work. I had a small print shop trying to make 30K a year and he had me subsidizing him so he could make 500K a year. I couldn't convince him that I was important too and needed some money from him! He managed to get a new airport built (in a poor location on poor soil that required rebuilding) where he owned land and sold it to the city at a nice profit. He keeps making large sums of money and traveling the world while I struggle to earn enough money to leave the county for a vacation. The promise that the 'help' will be scaled back one day never comes, they just find another creative way to get more. If his business had to stand on its own it would fail quickly and he would have less than I do, he only has more because he continues to plunder me. I have complained, voted and attempted to educate others why this is wrong and have failed to accomplish even a small goal while the taxing continues to increase on all levels and if I chose to resist I would be the one whose character would be slandered while I was carted off to prison for being an unwilling participant in the scheme. I don't see America ever becoming a republic again, it will continue to move to collectivism because of the emotional involvement of the masses.
As for the transportation subsidies... he didn't actually invent that. There is a rather obscure requirement for commercial aviation licensure to service any market where a US Congressman or Senator resides (so they can go back and forth to DC). For Delta to control MSP for example, they need to service all the tiny towns in Minnesota and North Dakota (at a loss) and covered by the volume in Minneapolis. It's also why there were also some hinterland airstrips in Alaska serviced by Alaskan Airlines, at a loss, only so AA can control Anchorage, Seattle, Portland, etc. Delta and United & such have to subsidize that stuff to get the licensure to operate in larger markets, they will charge as much as the market will bear and still fill their planes, but they do have to provide regular scheduled service.. The US Gov provides the dollars for the airports that make their business possible, and sells them they gate-access and landing rights, so... Realistically though, without that, you would never see air travel to Oklahoma or Wyoming or Nebraska, North & South Dakota, etc. The small towns with the couple of takeoffs a day with 20 or 30 passengers in them would never cover the cost of the airport, maintenance, staff, etc. I don't necessarily disagree with it. Requiring it by congressional district (although now gerrymandered) at the time kind of guaranteed that air travel would be reachable within a 2 or 3 hour drive from anywhere. Whether it would be affordable or reasonable is another thing, but would be available in the market.
Those rural people put food on your plate without it costing you $100 for an ear of corn on the cob. I would recommend you treat them with more respect, considering they also put conservatives in office, because if you live in the urban centers that you seem to think are the only elitists deserving of convenient access to air travel, you would certainly be in shackles by now with the types they would elect if unchecked.
And what the fuck is up with accusing me of having any "connection" or whatever. I don't, I just happen to be very well-read. I do the research, unlike most here, which blindly parrot some quotes out of Atlas Shrugged and assume it as fact.
First, Tesla isn't a car company, it's a technology company. It always has been. Technology companies routinely trade at much higher multiples than a manufacturer of an otherwise commodity product. If anyone really thinks that the other manufacturers would have innovated into some hybrid and electric products WITHOUT the Tesla capitalization, think again, watch the movie, Tucker, first.
Second, EVs are not evil. My wife owns a first generation Volt, she bought it new, put 75,000+ on it and it's literally had 1 trip to the dealer, for a slight vibration that turned into a bad drive shaft. It was actually a $200 part, took 20 minutes, not nearly as bad as it sounded, and was completely covered under warranty. She has an 80 mile roundtrip daily commute, and spends something less than $15.00 a week on gas. It doesn't pull our RV, so I have a huge Ram truck too, but for her commuting needs, it's perfect, and includes the carpool lane sticker, very helpful for 40 miles each way in clogged 12-lane California freeways.
Third, SolarCity isn't evil either. Most people live with an obscured vision of utility costs as they live in (heavily subsidized) municipal utility districts that mix water contract revenue, state subsidies, federal subsidies, tax exemptions, and public pensions with their utility bills. We live in the full and open market of PG&E rural territory in northern California. Before we signed with SolarCity, we had a $575 average utility bill in the winter, and tipping close to $1000 in the summer for a 2205 sq foot single story house, where we were pretty much shivering in from October through May and sitting in the pool rather than inside in the summer because we kept the AC at something like 85 despite being 105 outside. With SolarCity's 10,000 watt solar array on the roof, I don't give a hoot how much power we use, enjoy a 70 degree house year round and recharges my wife's Volt every day. Our SolarCity bill runs about $150 +/- in the summer and maybe $50 in the winter. SolarCity does draw heavily from the bond market, they provide and install the panels for free and charge for usage of the power like a utility company. I paid zero, but if I connect to PG&E or Edison or whoever, you don't pay anything for that either, just a monthly recurring charge. SolarCity has never been a solar panel company, they have always been a new utility in development. Unlike a solar panel company, you don't buy panels, pay the contractor, get permits, inspections, etc., SolarCity manages all that. They just expect a normal payment like a utility company, pretty much forever (or up to 20 years when I can buy them for $1.00). I actually always have a nice new fully-loaded American-made pickup truck with the savings (Ram Limited, Ford Platinum, etc.). Compare SolarCity's balance sheet with how much PG&E borrows, and it's similar. PG&E has taken it on the chin from SolarCity, every year they get rate increases from the California PUC because of "increasing costs of fuel" - when fuel has only gone down since about 2011. In truth, their pension costs are getting too big for their shrinking customer base. Does Solar work everywhere? no, my brother lives in Minnesota, I told him not to touch it with a 10 foot pole, but for me, with like 330 days of full sunshine, yeah, works great. On the prairie, I would look at wind turbines. The SolarCity model works with or without subsidies. So they didn't get a rebate from California (and by the way, we were dark for a serious crisis for a long time with the Enron stuff... so that was the start of California's subsidies of other alternative providers - so we wouldn't see single mom's getting $3,000 power bills for a 1-bedroom apartment).
Now, I don't agree with heavy subsidies, and that stuff needs to end, and will end with Obama gone. But, assisting American companies to compete globally is practically required until we fix our horrible trade imbalances. (At least when I had my panels installed) SolarCity only used American and Canadian manufactured solar panels. The local solar guys were selling cheap Chinese crap. My panels have a 50 year warranty, the Chinese stuff tends to be 5 or 10. The inverter and other components they used were all Honeywell, 3M, or Bendix, all of which employ a lot of Americans. I also did this during the depths of the recession, and it felt good to know that it was putting people back to work. I talked to one of the installers and he said it was the best job he ever had - benefits, good pay, education reimbursement so he could finish his degree, etc. I felt like I was fixing current and future problems. They seemed to hire and train people that were low-skilled, not recruit away from the other utilities. He said that he was a high school dropout and now had his GED and was going to school 50% time for his electrical engineering degree.
Do I love EV's? I'm neutral. I'm a gear head, love the performance, it will suck the paint off the doors of anything else. She might upgrade to a Tesla 3 when they become generally available, but otherwise considering a Volvo when they go all-electric in a year. I don't miss doing all the maintenance on the wife's car.. no oil changes, etc.. I don't miss any of that crap because I didn't ever drive it and didn't pay attention until the dummy light was on. Now it just never needs anything. Perfect for her. I personally like the growl of a HEMI V8 or a Cummins Turbo-Diesel.
So, I used to negotiate power contracts. You are really, really trying to pin down the wrong person with the subsidies BS for fossil fuels... stop watching Blaze and FoxNews snippets.
700%. That's the margin the fossil utilities make on power provided by the federal government. Your tax dollars buy hydro power plants, which are then reimbursed by long-term infrastructure bonds, and that bond interest is paid by hydro power contracts. The hydro contracts are as crooked as it gets - the utilities make massive donations to campaigns, and for example, the Dept of Energy has 30 year contracts to sell power at around 3.3-4.7 cents per kwh to the utility markets (depending on the region). Here in CA, PG&E buys for about 4.3 cents, guaranteed for 20 years, and sells to the consumer for 26 cents (off peak) to 38 cents - or even up to $1.00 on-peak).
There is a LOT of cash from $50-$75 billion companies that really don't like any competition at all, because they are used to a protected monopoly. How do they respond with losing customers? RAISE PRICES! Why? Because a lot of poor people with bad credit scores or rental homes have no choice. That's really, really sad.
That cash pushes the "subsidies" narrative - which is all of about $5.2 billion a year in 2013 for solar (and we spend $32 billion a day beyond entitlements - or about 0.5% of the DoD budget).
The coal industry got $1.075 billion (in really only 3 states - paid for by 50) that same year,
Biomass $621 million (yeah - cow shit),
Geothermal (something that really does work) - $345 million,
Smart Grid modernization (to utilities) - $29 billion (but they cry foul at tax rebates for solar because they don't get to 'service' the rebate,
Nuclear - $1.6 billion,
Conservation got more than Solar - $7.5 billion in tax credits for new windows on your house, insulation, etc.. - These are often 'serviced' by the utility and they keep 33% for the paperwork.
I do not agree.
I appreciate you have some knowledge in this area, but it is not relevant to my question.
Is Solar City a profitable business prospering off your utility payments, or is it being kept in business like Tesla by transfer payments from other taxpayers to pay your utility bills?
Take them all away, it doesn't change the purchase decision I would have made. So my bill might have been $170 a month instead of $150, it was still a hell of a lot better than $600 to $1000 to PG&E.
Solar City isn't taking cash payments from taxpayers, there isn't a mechanism to do that, they are selling their credits earned on the Cap & Trade market to other heavy-polluting industries. The right of the public to protect the environment is sound case law, and was actually led and passed by Nixon (the EPA act). Ask Flint, MI residents how they like their water...
We make a hell of a lot of money in the US, if splitting off a few pennies of it to protect the environment is needed, so be it. Lake Erie literally caught on fire once. We know what the lack of environmental laws and protections look like, so I'm not really opposed to financially punishing industries that dirty the air or water to raise funds the clean it up with. It's way better than taxing people in Arizona to pay for coal sludge cleanup in West Virginia or an oil spill in the Gulf. If that means rewarding companies that take it to the other extreme, why not?
My only reservation is that you don't see the same level of innovation in wind energy that would help the poorer small rural communities in the midwest. I kind of hope something happens with that.
I favor free markets and individual liberty. Musk and his looting is the topic of discussion. His looting is not defensible because others do the same.
Glenn Beck has always had some less-than-baked opinions.
At an average of $100 a month, I'll pay around $24,000 over the term of the 20 year contract for a system that on the building permit was listed as $16,500. I did that because the going cost to"buy" the same $16,000 system in California from the local shady dealers was about $40k.
Their business model relies on access to low-rate solar bonds (via Wall Street), and they sell a lot of them... just search for SolarCity on eTrade's bond market.
You didn't answer my question, local public utilities are subsidized to like 500% of what SolarCity is per customer. I'm not bitching about PG&E over-charging their customers dramatically while crying poverty. If I turned off Solar City and used PG&E, I'm not saving the 'taxpayers' any subsidies. You make this sound like it's this or that, and it's not.
And... I pay a hell of a lot in taxes, the couple of rebates I have enjoyed, honestly, was like a 10%-off coupon, at most. I pay more in taxes, every year, than probably 70% of the US population earns in a year. It's not as if people that can afford this stuff are making $5,000 a year in total income and getting a $7500 tax credit. Good Grief.
Let's make this interesting, post the state you live in and who your utility company is.
Some markets are not friendly to private capital - for the same reason people parrot the 'subsidy subsidy subsidy' march that the large utilities spend millions to publicize (while taking 5 times more in their own annual hand-outs), investors want immediate return, and that's not possible with new infrastructure. It takes years to reach cash-flow neutrality, so I don't necessarily disagree with tax credits for a temporary approach (to spur demand).
it's amazing to me how many so-called conservatives are pissy over methods of income tax savings. I went the renewable route for tax and economic savings, while it was probably a big reason for us to do so, I didn't buy the wife a Chevy Volt to drive 2 miles a day, she drives it 80 a day and it makes sense with or without the one-time income tax credit we got 6 years ago.
Second, while the idea of EVs is not evil, building them now (as production models, not just prototypes) is waste to the point of idiocy -- because if you consider their entire life cycle including manufacturing, no EV has yet achieved either energy or money break-even. What's more, the cheapest Tesla, even after the subsidy, costs over $60k. We should not be subsidizing anybody who is in a position to spend $60k for a car.
Third, subsidies and utilities with controlled prices are evil, and using the excuse that "the neighbors did it too" is pathetic. And trade imbalances don't matter. If there aren't enough jobs in the US it's not foreigners' fault; it's because the US is taxing and regulating job creators to death. To fix it we've either got to make them stop, or go off-the-books and defy them.
But what would happen to SpaceX if NASA folded up shop completely? Musk hasn't even begun to stir any private interest in the "service" he provides. Maybe this is the kind of shortsightedness that has ruined his "on the ground" ventures in ground-based solar power and electric cars.
That's good to know. And I have a proposition: space-based solar. To develop that, you need heavy lifting of materials into space--first with a rocket, then with a skyhook with an equatorial anchor, a counterweight beyond the GEO distance, and a GEO station. Once you have that in place you start to build the largest satellites you can imagine. You build some parts on the ground, and assemble them in space. I predict you could supplant nuclear energy and go far beyond the present coverage of nuclear with this technique.
Question: who among the three companies you named, could develop that first?
Blue Origin is probably going to focus on the commercial satellite industry. Virgin Galactic seems only interested in tourism.
The Russian Government and the European Union had most of the commercial space-launch market, the Air Force does almost all of the CIA / NSA / NRO launches out of the California desert (and that won't change).
Picking off commercial market share from the Russkies and the EU seems pretty easy for Elon Musk... to answer your question, I would bet on him every time in that scenario.
Putting it in perspective, the entire NASA budget is something like $32 billion. Their launch business isn't a big piece of the pie, add to that the US Government has to get the best price by law, etc., and it's a prestigious thing to do business with NASA, it's not a money thing. He gets the NASA / Space Station business though, and he is cheapest with the landing & reusable rockets, and he wins everything else by default. The numbers look like it's 1/3 the cost of anything else with his reusable rockets.
I am proud to pay no income taxes in support of this Boylesque looter.
The people buying Tesla vehicles for $65k to $115k are going to buy it with or without the $10,000 tax credit.
Although, we did buy the Volt a particular year because we were anticipating a large tax bill, and it did bury that.
It's not earmarked for Tesla though, all manufacturers get them... it's a sliding scale, there used to be a tax credit for Toyota Prius-style hybrids, and and up to a maximum for a full electric. On level, I think it's been a good thing, you are talking less money than the US borrows in a single day, and it played (one of several parts) in diversifying our economy during the recession and helped us regain energy independence. We now have options, OPEC doesn't control us, the US president probably doesn't really even need to talk to them anymore, unlike the 90s when we were holding court like a bunch of kids assisting a priest for communion in the Saudi palace. Oil is stuck at $30-$40 a barrel, and it will stay there. I remember a few years ago when it was at $120 and were totally f*cked as an economy. Every recession is preceded by spikes in oil prices, having the diversity now stabilizes prices for airliners and other heavy consumers. People used to laugh at the idea of an electric car, and Tesla completely changed their opinion - even the pro-stock drag strip guys ask for a handicap if a stock Tesla 4-door is in the other lane.
The game changer though is going to be Nikola. Diesel drivers have literally been bent over a barrel for a long time with fuel prices, Nikola will open up a ton of free cashflow for their industry.
You feel the transfer payments from taxpayers to buyers are fine as long as all manufacturers are looters. I do not agree. Looting is looting.
You feel its ok just because its "only" $10 billion, (or $20 billion, or $40 billion.)
You sound like a federal politician talking about only a billion or so for the greater good.
TANSTAAFL.
Its fracking that gave the US a way out of the middle east stranglehold on oil pricing, not electric cars. They are an insignificant part of the cars sold and less than trivial effect on oil use.
It's pretty hard to buy a nice new pickup under $60,000, and Ford manages to sell 800,000 units a year, so there are many more $60,000 buyers than one might think.
So, if the Model S buyer didn't buy a Model S, would you assume they would go and buy the Chevy Impala? I doubt it, maybe a Cadillac, doubtful, probably a Lexus Hybrid for $75,000 and most of that going back to Japan.
I think you missed the point... are you honestly saying oil did not get exploration subsidies for fracking? You can't be that naive. Did they pay for that public land they were exploring on? No Way. They pay an extraction tax, if they find it. Pennsylvania alone gave a $1.6 billion tax credit to Shell to build ONE refinery. The total of all state, local, and federal "jobs" subsidies and tax breaks to oil? $550 billion EVERY YEAR. Look at the ripoffs they were happy to do with little old grannies and their life's savings. As soon as oil prices looked shaky, they had shady brokers dialing for dollars to grannies to "get in on the oil boom" and sold them oil wells subject to "management fees", "transportation fees", and "storage fees" before ever getting a dollar in revenue. Damn, I thought those phone calls about the once-in-a-lifetime opportunity to own an oil well in Pennsylvania were never going to stop (until I changed my number).
So, in my case, I pay like $80,000 a year in taxes, not including property tax or sales tax. Let's call this what it is, it's a 10% off coupon for a year. If people can buy a $65,000-$120,000 car, they are ALREADY paying a shit-load in taxes, there is no free lunch there.
I don't necessarily agree with any of it, I'm just extremely offended at the hypocritical bullshit the anti-solar/renewable people have without calling the kettle truly black as it is.
I spent 4 years in the desert, fighting wars for people that don't really like us too much to "protect the free flow of oil". Here's an idea, don't use the shit anymore. We have spent trillions in American blood and treasure for that stuff, and while I'm not saying "give it up", where there is alternatives we can slowly and cost-effectively develop, we need to. Yes, we produce our own, but it's a world commodity, if there is another war in the Middle East, do you think the ND oil extractor is going to sell it to you at a discount, or charge $5.00 a gallon at the pump because that is what the market will pay? you are an idiot if you think anything other than the obvious.
I don't think any one solution is the answer, but I think many different sources of energy that suit different sectors of the economy and different regions are the right way. Do you know what we STILL pay in California for gas? About $3.50 a gallon in the cities. The cheapest anywhere here is like $3.00. Why? We don't have any refineries anymore, we have puke-leftists, and we have a corrupt government. Am I going to pay $3.50 just because I want to bleed crude oil? No, that's stupid.
We're going to retire in Idaho, we may or may not tow an EV behind the motorhome 6 months out of the year, or just buy something simple like a Subaru, no idea, needs change, but to blanket-cry what political belief or wishes are against reality?
If you don't live in California, it's not costing you much at all... And to be honest, our incomes far out-pace what we get back from the federal pie by around 20% in 2013, and probably close to 50% now in the recovering economy.
If you live in South Carolina, North Dakota, Florida, Louisiana, Alabama, etc.. Shut the Fuck Up!. SC gets about $8.00 back in federal subsidies and spending for every $1.00 in taxes... My home state of Minnesota really gets screwed, less than 50 cents on the dollar. Texas even grabs about a $1.50 for every $1.00.
https://www.theatlantic.com/business/...
Do you really think Detroit would have ever started putting better entertainment systems in cars without Tesla's laptop screen on the dashboard? They innovated in the Silicon Valley way, investors throw them cash hand over fist, they make a good product, they will probably make a great product, and in the meantime they don't give any car dealers a cut so you have that backlash that isn't exactly unbiased either. If you look at the ancillary benefit to the industry - like Toyota and Nissan sourcing their batteries from Tesla, or Volvo deciding that all-electric looks better than an internal combustion engine for their fleet in the next couple of years, whatever, ultimately, Tesla can always earn a giant profit by LICENSING their technology to the others. That is what Wall Street knows. Let Elon try to outrun the others for a while, he may do it, or with the giga-factory now online in Nevada, he may just become a supplier to the others and make a ton of revenue that way. Would you rather Tesla make money selling lithium batteries made outside of Reno in one of the poorest parts of the US, or would you rather send it to Samsung and Panasonic? Ultimately, it's going to be a battery and self-driving-car/truck software company.
So by your reasoning, Tesla is great for taking from the taxpayers and so are all the other looters. It's just a hidden cost to all the customers because customers might not continue to use the same amount (or buy the car) if they could see the real price of what they are buying. Better not let them know, and government can act as the conduit for the cost, after taking out their sizable graft.
I'd rather see Tesla compete in the free market without stealing from the taxpayers to line his pockets.
The system existed long before Elon Musk came along, he's just very good at pulling every lever.
You are just kind of falling for the wrong narrative. Teslas are not built with United Auto Worker labor, soo....
Sure they got a dilapidated plant in the Bay Area from Toyota/GM for cheap, but they were never going to make $15k Matrix minivans there again where the cost of living demanded at least $80k a year per worker. It was home plate for Tesla, Pontiac went bye-bye and Toyota didn't care - just moved to a cheaper state. Tesla taking it over meant no hazmat for the taxpayers to clean up.
Incidentally, Chevrolet has sold far more Chevy Volts than Tesla has sold - almost more annually than the total Musk has sold in several years of Model S production. Chevy gets the same $7500 tax credit. Just saying.
YOU respond:"because you don't have a choice with the others, those are ok to not criticize as well"
Your conclusion has no basis in anything I have written. You want to discuss Chevy and GM feeding at the trough, start a thread and post some links to supporting data. GM has been at the trough feeding right alongside Musk at the taxpayers expense. GM was roasted for their bailout and Musk gets a pass ? Rubbish.
Energy and Infrastructure is really hard, investors are always wary of returns, it takes longer to develop new oil reserves than 2 or 3 business cycles will last.
Public money has unfortunately always been ears-deep in this stuff.
To answer your question about Tesla - Actually, I think they would do ok without the subsidies, they don't have any problem raising capital and it would really only force them to license some intellectual property. I understand Elon's disinterest in doing that, because they are so far ahead than other car companies -not only on the EV thing, but on battery technology, self-driving, the "summon" thing that pulls the car out of the garage or valet on it's own, etc.
Ask ourselves how many tractor-trailer drivers are going to stick with $3.00 / gallon diesel fuel, and probably $200k a year in fuel expenses, versus switching to Nikola fuel-cells with 3x more torque, double the towing capacity, and keeping up with 65 mph traffic on steep grades instead of driving 25 mph for hours. My guess is, quite a few of them will. Tesla is way ahead on batteries, and Nikola (the truck guys) are going to buy their batteries from Tesla. The Fuel Cells are great for long duration, but they still need a big battery as a capacitor to moderate the output. Between the two, that's about a 1500 mile range on 10 cent a gallon hydrogen.
How many vehicles on the road are big rigs? Quite a few of them actually... and most of them are pretty old. $200k in fuel savings equals a lot of room to finance a replacement with.
So when is Musk paying back the loot to the taxpayers?
Has GM paid back their bailout yet? ;^)
The only challenge Nikola has to deal with is the hydrogen distribution, but they are doing it the right way, with 1500 mile ranges, the distribution gets pretty easy because you don't need one on every street corner. Especially if you can ultimately plug the thing in and get a 100 miles down the road after a few hours of charging, I suspect they will do fine. Electric motors have gobs of torque and towing power compared to gas or diesel, it's not even a close horse race.
Better political climate than I have been trapped in as well for the last 20 years... California used to be rather politically conservative, and if you look at it on a map, 90% of it is very, very deep red. We just can't overcome the lefties in LA, Sacramento, and San Francisco though.
Seems like Boise and CDA had more of the subdivision stuff. I'm open to suggestions, spent a couple of days in Boise and Mountain Home as well, just like all the valleys around Pocatello. Sun Valley seemed very lefty.