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Originally Posted by jamesqf
I think you've gotten the reasoning almost exactly backwards. It's not that Tesla (or Aptera etc) couldn't succeed without government money. After all, selling a few thousand exotic cars at $110K or more has been a viable business model for Ferrari and others, hasn't it? But since the government has made the decision to throw money, so why shouldn't they be the ones to catch it?
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I don't think you've been following the story of Tesla that closely. They have not been very successful so far. Two examples from the past few months:
http://www.nytimes.com/2009/03/27/te...s/27tesla.html
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Today, Tesla is facing the same plight as many green-energy start-ups. These huge, capital-intensive projects have been paralyzed by the credit crisis, and their survival depends on federal loans that have only just started to flow.... Mr. Musk has said that he underestimated the
money, time and effort needed to build a car company.
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(emphasis added)
and:
Tesla Is Going Public | Autopia | Wired.com
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The SEC filing provides the first clear look at the company’s finances. It notes that Tesla has lost "approximately $236.4 million from our inception through Sept. 30, 2009"....
The company has teetered on the brink of financial ruin in the past, but it has always squeaked through. Tesla got a $50 million infusion in May when Daimler bought a 10 percent stake in the company. Speculation of an initial public offering ramped up in November, but the company has largely kept mum about its finances and plans....
And speaking of the Roadster, the SEC filing contains an intriguing detail regarding its profitability: In the financial data summary Tesla says it had a profit margin of 8 percent — not anemic but not good. However, that entire margin seems dependent on zero-emission-vehicle credits, which will not be available by the time the Model S is commercially available.
Since the Roadster was arguably unprofitable even at a drive-away price of between $125,000 and $140,000, it would seem that some unspecified efficiencies would have to be part of the success story for a vehicle with an MSRP touted to be half that — $57,000 before the federal tax credit.
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(emphases added).
Again, if you believe it's going to be a good long-term investment, I encourage you to walk the talk. I think it would be good for the country if an American company could successfully run a business manufacturing electric vehicles on a large scale.
I personally, however, would not care to throw my money at
this company, and the reason I keep pressing the issue is because I am not particularly happy about being compelled to do so. The fact that something has been a successful business model for Ferrari does not mean that (a) just
anyone can be successful at a similar business model or (b) that supporting that business is an appropriate role for the federal government. It isn't fair to the taxpayers, who may have preferred to support other investments with that money.