Tesla qualified. Their application was reviewed by a board of People Who Know Things.
I know this because my aunt, a respected physicist, sat on such a board. They're not throwing shit at the wall to see if it sticks; they know what they're doing, and they're not picking winners and losers, they're playing the same game every investor plays: trying to decide who is going to win or lose before it happens. Tesla got the loan because they won it. Which is fair to the same degree as any other investment process. Unless, that is, you have some additional knowledge of corruption in the review process.
Solyndra should have proven that the government cannot "pick winners and losers" even if it wants to -- as long as the government isn't the primary player in the market, which is unfair, but also isn't what happened with Tesla.
Or GM, for that matter.
As for dealerships, the reason Tesla doesn't have to go through them is because they don't have any preexisting agreements with the dealerships, in the same way that, for example, someone who agreed to take out a student loan has to pay that back, but someone who didn't go to college, or went to a cheaper school, doesn't have to. There's nothing unfair about that either. Sure, dealerships are a pain: let's drive them all out of business, please. I'll be first on board.
"they know what they're doing, and they're not picking winners and losers, they're playing the same game every investor plays: trying to decide who is going to win or lose before it happens."
The government should be in the venture capitalist business funding companies based on the recommendations of the board of People Who Know Things, now?
"As for dealerships, the reason Tesla doesn't have to go through them is because they don't have any preexisting agreements with the dealerships."
Other smaller car manufacturers are having to go through dealerships, even with zero pre-existing relationships. Why should Tesla, which has a market cap that far exceeds those aforementioned manufacturers, get special rules?
> Other smaller car manufacturers are having to go through dealerships, even with zero pre-existing relationships. Why should Tesla, which has a market cap that far exceeds those aforementioned manufacturers, get special rules?
They shouldn't. Remove dealership requirements for all manufacturers. I think that's pretty clearly what Tesla is arguing for.
> The government should be in the venture capitalist business funding companies based on the recommendations of the board of People Who Know Things, now?
Sure. Why not? I want the government to stimulate innovations in places that need it.
Well, yeah. Who else? It's not dissimilar to how academic research funding works. Proposals are submitted, evaluated, and sometimes awarded funds.
As far as curbing carbon emissions goes, there are a lot of irons in that fire, both public and private. No reason to place all your eggs in one basket. There are a lot of reasons to publicly support new innovations in EVs. It's a very high-profile field, and Tesla is doing a fantastic job of showing that EVs can be fun, pleasant cars. Putting the money into academic research isn't going to generate nearly as much public interest.
>Other smaller car manufacturers are having to go through dealerships, even with zero pre-existing relationships. Why should Tesla, which has a market cap that far exceeds those aforementioned manufacturers, get special rules?
I don't believe you. Show me some evidence that they have to, and that they're not merely choosing to.
>[It shall be a violation...] to offer to sell or to sell any new motor vehicle to any person located in the commonwealth, except a distributor, at a lower actual price therefor than the actual price offered and charged contemporaneously to a motor vehicle dealer located in the commonwealth for the same model vehicle similarly equipped or to utilize any device which results in such lesser actual price unless the same is available on equal terms to all dealers located in the commonwealth; but this paragraph shall not apply to sales by a manufacturer or distributor to any unit of the federal government or any agency thereof or to the commonwealth or any of its political subdivisions.
As written, this clearly applies if and only if Tesla already sells cars to dealers, and furthermore similarly to other independent car manufacturers, electric and otherwise.
Is it a bad law? Yes. Does it hurt the incumbents? Yes. Is it biased in Tesla's favor? No. Is it giving Tesla special treatment? No.
To rephrase this:
Did all students get A on the exam? Did all even try to learn to get good grade? No. And why should it matter. Ones who did put some effort into learning got the loan. Others didn't. OMG HOW IS THAT FAIR?
Yup, unfair indeed, lol.
There shouldn't even have been a loan in the first place. The government has no right to dole out taxpayer money in the form of loans to private companies.
How exactly did Tesla earn an "A" up to that point? Every small electric car manufacturer was losing money left and right. Two smaller startups got the loan (Tesla and Fisker) to survive, while the others didn't (Bright Automotive, etc.). The ones that didn't get the loans went out of business. The one that got the other $500 million loan went out of business (Fisker). Only Tesla survived by having one tiny profitable quarter (which was a low single digit profitable quarter where they sold 3000 cars to rich people).
> How exactly did Tesla earn an "A" up to that point?
Business plan, business model, customer research, advances already made, further along, ... There are dozens of possible reasons to loan $500M to Tesla, but not to another company.
There are dozens of possible reasons why you would loan $1000 to one friend, but not to another. Someone else wouldn't know those reasons, but if the friend complained about you being unfair, you would be quite miffed if someone went on the internet complaining how unfair you were, based on treating two people differently, without considering that maybe these people actually are different.
These companies may be alike in trying to sell an electric car. That does not make them comparable for the purposes of giving them a loan.
So the government is now a venture capitalist or investment bank and should be encouraged to pick winners and losers now?
It's quite funny that these Tesla Roadsters are being bought by rich Americans, and being subsidized by average Americans, and yet there seems to be no outrage from those purportedly upset about inequality. The average American isn't benefiting by enriching billionaires and millionaires with their $100,000 roadsters.
So because the company cannot take $500m and instantly start turning out third generation EVs that have a price point that the average American can afford, we should just refuse to invest any money in driving toward that goal and just stay with the status quo of oil-dependant cars?
The end goal of the loan was not to make Elon richer or enable Tesla to sell a few thousand cars to "billionaires and millionaires". It was to support a company that had demonstrated a plan that looked reasonably viable for building up the EV tech to the point that it can become a mainstream replacement for ICEs. The incumbents have not shown as much interest or drive, and the initial attempts by them at delivering EVs have not seen the same level of adoption and excitement from the public. I believe that this lack is due to the less efficient manner they are going about it: trying to retrofit EV technology into the ICE world.
I am certainly not a millionaire. I am above the salary level of the average American. That meant that it was possible for me to save up and purchase a Model S. Based on my experience of owning it and my research of the company, I believe that this is the future and I believe that $500m loan was not simply a capital venture or investment but rather that it was very much a benefit to the average American because it will enable a third generation of EVs to enter the mainstream.
I believe the established companies see that plausible future also and are fighting as hard as they can with lobbying and lawsuits to prevent being overshadowed by it.
We've come a long way since the 1930s, haven't we? Yes, the government can do these things, and -gasp- it works, on a small scale, under certain conditions (economic depression).
The "$500m subsidy" to Tesla costs taxpayers zero after being repaid -- but represents a loan from the median taxpayer of about, oh, I dunno, seventy-five cents.
I should perhaps note that that isn't a subsidy to Tesla: it applies to every electric car manufacturer. It's not relevant to the question, which is, "did Tesla succeed "unfairly" w.r.t. other makers?". It's also a red herring for your previous argument about inequality: "Both the Nissan Leaf electric vehicle and the Chevrolet Volt plug-in hybrid, launched in December 2010, are eligible for the maximum $7,500 tax credit." -- these are cheap vehicles.
But yes, now that you've successfully moved the goalpost, I might have to revise my estimate of seventy-five cents.
Does it actually matter? Here the one thing, there the other.
You're complaining about "government picking winners and losers with taxpayer money". The loan isn't a waste of taxpayer money. The subsidy isn't picking winners and losers. Taken together, these two things do not provide weight to your claim: Tesla is not a messiah of the government on the wings of the taxpayers. Or, at least, you have failed to demonstrate that.
Life's not fair. Better you get used to it and take every advantage you can get.
It's not like it was free money anyway. It still was a loan and had to be paid back. You're acting like the US government would have gifted that money to Tesla.
How do you explain the $7,500 subsidy for each Tesla sold?
Also, the government would have gifted them the money regardless of their ability to pay it back. Fisker couldn't pay back theirs, as did many other energy companies that went bankrupt. No one was arrested and no personal assets were taken.
The same way I explain the $7,500 subsidy for each ANY all electric car sold; as the government trying to promote alternatives to ICE because (in theory) it's good for the planet and economy.
