Tuesday, June 29, 2010

My Letter to the NY Times re: Government Support of Tesla Motors

From: patrickbarron@msn.com
To: letters@nytimes.com
Subject: Letter-to-the-Editor re: Government Support of Tesla Motors
Date: Tue, 29 Jun 2010 12:03:48 -0400

Re: Tesla IPO

Dear Sirs:
Your article about the upcoming Tesla Motors IPO illustrates beautifully how our government gambles with the peoples' money. The government has "loaned" Tesla $465 million. I put the word "loan" in parentheses, because this is not a real loan. Undoubtedly the rate is below market, but there is no way of knowing, because there is no loan market for Tesla Motors. No bank board of directors would ever approve such a loan of its depositors' money. The article speaks for itself--Tesla has lost $290.2 million since it was founded in 2003. It has produced a grand total of one thousand cars, priced at over $100,000 a piece. Its current car has minimal range and few places where it can be recharged. By the time Tesla rolls out its next model, the big players such as Nissan will be offering all-electric cars at a fraction of Tesla's price. But how can there be a significant market for an all-electric car when nowhere can one find out its electricity cost per mile? And where will America get the power? The government, via the EPA, is making it almost impossible for America's utility companies to add electricity production. In fact, some current coal-fired power plants are threatened with closure. Nevertheless, the government is pushing this technology and trying to lure buyers by granting tax credits to purchasers of all-electric cars. But, there's a sucker born every minute. So, if you loved the DeLorean, you'll probably buy a Tesla.

Patrick Barron


  1. Um... "" are not parentheses, they are quotation marks.

  2. Amazing. It is difficult for anyone who has a useful idea which will help make the country a bit more free of the perceived need for hydrocarbons to get any aid from the United States government. Now someone has done so. So naturally the criticism begins. It is as if electric cars, wind farms, solar panels and other things of this sort threaten many people's fixed notions of the way their world is supposed to be. Americans are even suspicious of more widespread use of efficient public transportation. After all, using such things on a large scale is a new, (and therefore risky) idea. Or, perhaps, is an attack on the widespread American delusion such green ideas are simply not practical on a larger scale and endorsed only by tree-huggers and the like.
    I'm hoping the sleek look of the newer model Tesla is planning to build will attract customers because of its sleek appearance. Folks really care for appearances. Whatever gets more of the petroleum guzzlers off the roads is a very fine thing. So much government money is wasted on truly wacky projects. Why should anyone be bent out of shape by this perhaps not so wacky expenditure?

  3. Linda-

    Please stop typing before you hurt yourself. I'm all for Americans decreasing their environmental impact, but feasibility still means something.

    The market and demand for $100,000 electric cars accounts for maybe 1% of the population. It's asinine to think that someone would invest in a company based on its potential years down the line. The company is already riddled with debt.

    "I'm hoping the sleek look of the newer model Tesla is planning to build will attract customers because of its sleek appearance. Folks really care for appearances."

    Yea, that really worked for GM and Pontiac. They had some of the best looking cars, but they were not economically efficient and lacked in quality. How about Tesla focuses on producing an economically viable car before they start worrying about appearance? Is that so hard?

  4. The fossil fuel industry is heavily subsidized from start to finish and there is ongoing policy and financial support for obsolete automakers and yet, they still can't turn a profit on a reliable basis. Then, there's also accidents like the Gulf oil fountain, the $15B a month we're spending on the wars and the $40B a month we spend on oil imports.

    That's $40B a month to make people who hate us rich and $15B a month to make sure they hate us more....

    And you're claiming we shouldn't loan Tesla $0.5B to remodel a factory in the US, that will pay US wages and US taxes and produce electric cars that they already have deposits on.

    You sir, must either work for GM or the Saudis.

  5. Linda,

    What rational evidence can you provide that the Tesla is a "useful idea," beyond being useful to the investors who own the firm? Assertions are not evidence. And you haven't even begun to answer any of the questions that Mr. Barron poses in his letter. To cite but one example, where do you believe owners of the car will obtain the electricity needed to recharge the car's batteries, especially when travelling away from home?

    The car is visually attractive, and, like all electric motor driven vehicles accelerates very briskly. But when it must negotiate a corner, it must slow down to very low speeds to allow its mass to go around the corner because of the enormous mass of the lithim-ion batteries. For less money ($80K), you can buy a Lotus Evora that will match or better the Tesla on any curvaceous tarmac, and achieves an EPA-certified 35mpg using readily available gasoline, or gas/ethanol mix, with proven engine technology.

  6. Here's my simple recommendation--if all-electric cars are such great ideas, then the government need not burden the taxpayer with direct or indirect loans to the car markers. The same with wind power, solar panels, and all the other anti-hydrocarbon ideas. We are going bankrupt chasing mostly pie-in-the-sky solutions to problems are most make believe anyway.