Posted on 03/01/2015 6:40:39 PM PST by thackney
The European edition of The Wall Street Journal has said in an editorial that Tesla Motors should stop accepting federal and state subsidies. “Last year Tesla made a roughly $150 million killing from selling ZEV credits. That’s up from $130 million in 2013, $32 million in 2012, and $3 million in 2011. All told in 2014 Tesla sold about $216 million in credits,” the newspaper said. It goes on to say,
Capitalism needs visionaries, but its reputation suffers when companies worth billions soak middle-class taxpayers for profits. Turn off the taxpayer tap, Mr Musk. It would earn you more friends for the long haul.
This seems a strange position for the Wall Street Journal to take. It never said a peep about the billions GM and Chrysler got after the global economic meltdown in 2008. Even though most of that money was eventually repaid, where was the Journal’s concern for the “taxpayer tap” then?
And it’s not like Musk and Tesla did anything to create these taxpayer financed schemes. The state and local governments laid out the rules and Tesla found a way to make a lot of money by playing according to those rules. The governments involved set out a lovely pie of money and said, “Oh, won’t someone come and gobble up our lovely pie?” Tesla did. Get over it. Move on.
Many stock analysts have frankly been stunned by Elon Musk’s assertions in a conference call with investors last week that Tesla would grow by 50% a year for the next 10 years and be worth as much as Apple in 20 years. Several wonder if Musk has gone off the deep end.
Gadfly Morgan Stanley analyst Adam Jonas has written an article entitled “Tesla Pushes The ‘Insane’ Button.” He writes, “Seems Tesla is preparing to be a much larger company than we have forecasted, leaving us with nervous excitement.” Jonas says Tesla is targeting capital spending of $1.5 billion in 2015 – nearly double his expectation and up 50 per cent year to year. He says this level of spending reflects a company with ambitions to achieve sales of at least 500,000 by 2020, not the 295,000 he’d expected:
The assumptions in our earnings model seem to be at great philosophical odds with Tesla’s much more ambitious growth aspirations. When thinking about the share price development, the key question we are left with is whether investor appetite can keep up with Tesla’s growth journey and the alignment of forward looking expectations with the capital markets, a balance so important to firms at this early stage of development.
Another brokerage firm sees things differently. Evercore ISI is still positive on Tesla for the future, saying there are 6 reasons for its bullish attitude:
Less exposed to market risk than peers, as global demand will exceed supply.
Protected against industry risk because of its unique business model and vertical integration.
Market leading product with no obvious competition. Substantial brand equity, through product and innovation.
Equity certain to grow as it enters new markets and has new products.
Government CO2 rules a tailwind for it, a headwind for competition.
“The factors in Tesla’s favor are both powerful and unique to Tesla. We see merit in allocating capital to a leader in the technology of the future,” Evercore ISI analyst George Galliers says.
Elon Musk is nothing if not brash. His style and his business practices have discomforted many established leaders in the automotive marketplace. Perhaps it is no wonder that he should do so in the financial markets as well. Whether you decide to double down on Tesla stock or take your gains and get out, there is a stock analyst out there who will applaud your decision.
The one thing to keep in mind with Tesla is that the capital markets are confronted with something quite out of the ordinary here. All anyone can say with certainty is that there will be winners and losers ahead. Invest wisely.
I guess that depends on who you ask.
http://www.foxnews.com/opinion/2010/04/23/did-general-motors-really-repay-taxpayer-bailout/
Well if nothing else we can have dueling links, LOL
http://projects.propublica.org/bailout/list
Nothing is dirtier than subsidies to business. Its using tax dollars to give an advantage to one business over another.
“Electric cars suck bilgewater in cold weather, ...”
https://www.youtube.com/watch?v=XZ5PqPeOPT0
Tesla Model S Cold Weather Range Test Norway
(Norwegian - ENGLISH SUBTITLES)
My best friend’s daughter has a Tesla S.
Even though she is a devoted Tesla partisan, she readily admits the range is much less useful in our frigid Indiana winter.
Thank God for the metric system.
I oppose all forms of corporate welfare equally.
They’re not common anywhere the AC or heater/defroster has to run. Coastal California is one of the exceptions.
I think the point is how much of what GM claims to have paid back did they actually pay back and how much came from a TARP escrow fund that did not count as their bail out money but was not really GM’s money either? As I understand it that is the scam they were running a couple of years ago when they claimed to have paid most of the bailout money back. It is a very good thing if they actually paid most of it back, but I do not trust anything the regime or the UAW owners of GM claim.
I agree, but if you are in the game it’s hard to compete against other teams that are taking the welfare. It’s a rigged game and if you want to stay in it, you need to use every advantage you can.
Yes, we need to get rid of corporate welfare. Similarly, we need to get rid of unnecessary regulations and red tape, most of which is designed to 1. raise tax revenue, 2. protect existing businesses from competition, 3. provide bureaucratic government jobs to (mostly) democrat voters. If we got rid of welfare and red tape, we’d see a LOT more startups and a much more robust economy.
Yes, and did you notice how much easier it is to understand the metric system when it is discussed in Norwegian?
Me, I still prefer furlongs, fathoms, chains, rods, varas (look that one up), etc!
/sarc
:-)
Stop accepting subsidies??? That’s what Tesla exists for.
GM still owes the taxpayers $15 billion. I will take my share in the form of a 2015 Corvette Z06.
I think a 25% reduction in range is nothing to brag about. Last I checked, my gas car gets a 0% reduction in range in cold weather.
But I am actually more interested in how hot weather affects it. I know for example that a Volt owner manual states not to leave the car out in the sun without being plugged in....energy is needed to cool the batteries. So I wonder what the extra drain would be to keep both occupant and batteries cool in hot weather....not California hot but hot and humid 105 degree days in the midwest and deep south.
“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” - Ronald Reagan
The question in the article asked about whether it’s normal to pay the higher interest loan first?
I think it depends on what is owed. If I’m close to paying off a loan, even if it’s a low interest debt, I’m inclined to prioritizing that loan because it frees up cash that can be used on other debt to speed them up.
Like everything else from this administration, there is a lot going on with GM that seems shady. I do not believe they have actually paid anywhere near what they are claiming. I believe they are doing the equivalent of people using one credit card to pay off another.
A typical gasoline cars gets a 12% range reduction in cold weather.
http://www.fueleconomy.gov/feg/coldweather.shtml
“But I am actually more interested in how hot weather affects it. I know for example that a Volt owner manual states not to leave the car out in the sun without being plugged in....energy is needed to cool the batteries.”
The manual does not say that. It says to use sunshades when parking in direct sunlight when it is hot.
“In hot weather, avoid parking in direct sunlight or use sunshades inside the vehicle.”
It is common knowledge among EV owners that cold weather hurts electric cars range much more than hot weather does.
(As long as you are not talking about the Nissan Leaf, which went the cheap route among mainstream electric cars and did not include active liquid cooling for their battery. As a result, early model years suffered some permanent range reduction from the heat in Arizona. They have addressed this issue in recent years.)
“Use the following tips to help maximize energy efficiency and range.”
It is not required for the health of the battery, it is just there as a tip in order to save energy.
Now, for long-term storage, then yes, you should not leave it in the sunlight because the battery will eventually run out of juice keeping itself cool. But you should follow this advice for any kind of car because of the damage that weeks of cooking in the sun can do. I think sunshades were invented long before electric cars.
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