Should Tesla receive government help?

Should Tesla receive government help?(dealbook.blogs.nytimes.com)

9 points by amrithk 17 years ago | 15 comments

bilbo0s 17 years ago |

A guy goes to his wife with a business idea. He has had them before, and his use of their savings has taken the couple's net worth to below zero when the debts that he has incurred are factored in. The thing is, he believes that this business will be different. This is the one that will turn things around for them. A bit skeptical, the wife hears the husband out. At length, the husband finishes his 'pitch'. Still skeptical, the wife tells him that while she would love to help him give this new business a try, they are out of money, and are obliged to start paying down debts at this point. Relieved at being able to blame their situation for the denial as opposed to her skepticism, the wife tries to move the conversation to a different topic. When the husband hits upon an idea.

They still have a sizable sum of money in the kid's college fund!!! Just enough to get him started!!!

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People we are broke. I would suggest everyone accommodate themselves to the new fiscal realities coagulating around us. To continue to spend in the hopes that some future generation will pick up the bill is morally unconscionable. It is also contrary to our self interests by the way. As it is highly likely that the most damaging consequences of our financial mismanagement will develop in a more immediate time frame. That is, it is likely that you only THINK your kids will be the ones saddled with the consequences. In our current situation, it is far more probable that you will.

If a business enterprise requires government assistance to make it economically feasible then alarm bells should be going off in our heads with regard to the economic efficiency of that enterprise.

ssharp 17 years ago |

Any federal money or loans that goes to Tesla should be through some sort of grant project where other automakers and manufacturers can compete for the money.

The only way direct bailout money should go to them is if they have any IP worth salvaging. Personally, I don't think an all-electric car is "the future" of the passenger car. Fuel cells, PHEV, natural gas, etc. all seem like better options, so I'd rather see federal money invested into these technologies.

omouse 17 years ago | |

"Any federal money or loans that goes to Tesla should be through some sort of grant project where other automakers and manufacturers can compete for the money."

Some sort of grant project for clean energy? Some kind of grant project that has $25 billion to give away to worthy projects?

Almost entirely lost in the subsequent discussion was the fact that Section 136 of EISA created a $25 billion fund known as the Advanced Technology Vehicle Manufacturing Incentive Program (ATVM). The ATVM specified that the Department of Energy (DOE) should provide loans, loan guarantees and grants to new and existing automakers and suppliers to encourage development and speed delivery of next-generation cars – vehicles that meet higher standards for fuel efficiency and stretch technology beyond the internal combustion engine. The program aimed to provide “grants and loans to eligible automobile makers and component suppliers for projects that re-equip, expand, and establish manufacturing facilities in the U.S. to produce light-duty vehicles and components that make meaningful improvements in fuel economy performance.”

http://74.125.95.132/search?q=cache:iJGKVzIN1ikJ:www.courtho...

ssharp 17 years ago | | |

Right...

The debate is whether or not Tesla is more worthy of the money than another manufacturer. I'm not convinced they are.

jonursenbach 17 years ago |

No.

No business should receive help from the government aside from a publically available grant. Bailouts violate the concept of a free market.

ajkirwin 17 years ago |

No. Because they are not building consumer vehicles, but luxury cars.

StrawberryFrog 17 years ago | |

If they will only ever build luxury cars, then no.

If they will work down into lower parts of the market as their tech gets less experimental and less expensive, then yes for sure.

swombat 17 years ago | |

The work they're doing on luxury cars could easily be applied to consumer vehicles.

omouse 17 years ago | | |

You're right because they work on battery technology too. They have to in order to make electric vehicles more appealing and they plan on selling their batteries to other automakers.

dallasrpi 17 years ago | |

http://calacanis.com/2008/12/01/on-bailouts-and-sports-car/

ssharp 17 years ago | | |

I like how Calacanis acts like the $400 million loan has no default risk. Tesla has blown through hundreds of millions already with no profit. What makes him think that this company will be able to continue to fund operations and research as well as pay back interest and principle on a $400 million loan.

All of his "consumer benefits" can be had in other technologies as well. It's not like Tesla is the be all and end all of all alternative powered vehicles. If GM and Toyota are able to put 40-50 mile range PHEV on the roads next year, Tesla becomes even more irrelevant to the average consumer.