Tesla Pays Off Federal Loan

[OKCTalker]

Review & Outlook: The Other Government Motors - WSJ.com

Tesla wouldn't exist without breathtaking levels of government support and subsidies to buyers. In addition to the $465 million federal government guarantee, they received a $10 million grant from the California Energy Commission. U.S. buyers receive $7,500 in federal tax credits, and Colorado buyers receive an additional $6,000 in state income tax credits. A Morgan Stanley report in April said that Tesla made $40.5 million in credits in 2012 and could collect $250 million in 2013. Q1 2013 "emission credit sales" totaled $85 million, and were 15% of the company's revenue (remove the credits and the company lost $53 million in Q1 2013). And these aren't all of them. If you're tempted to dismiss this as a right-leaning editorial in the Wall Street Journal, then read this from the left-leaning Daily Beast: Tesla Goes to War - The Daily Beast

Bottom line: All taxpayers are paying to underwrite a car costing $60,000+ and sold 9,650 units through April, compared with the Ford F-series pickup which sells without subsidies at an annual rate of 150,000+.

[CaptDave]

The cars would not be illegal though, it is basically trying to force them into doing some sort of dealership arrangement. Seems stupid, and like someone bought a friend in congress.

That "someone" is called the Autombile Dealers Association. Lobbyists are the bane of responsible government.

[Just the facts]

Bottom line: All taxpayers are paying to underwrite a car costing $60,000+ and sold 9,650 units through April, compared with the Ford F-series pickup which sells without subsidies at an annual rate of 150,000+.

Ummm..... eh, never mind.

On second thought:

http://www.carsdirect.com/car-pricin...-tax-deduction

Depreciation Cost Limitations
While you can usually claim up to $250,000 in depreciation costs for general business property and equipment, the depreciation limit for vehicles is much lower. If your small business uses a passenger vehicle in the day-to-day operations of the business, the maximum amount depreciation on your federal income tax return is $2960. If you use a pickup truck, the limit is $3060. This is the limit for depreciation in the first year of service. However, from time to time Congress does authorize bonus depreciation amounts that can also be deducted.

OR this:

http://finance.zacks.com/6000pound-v...tion-3484.html

Vehicles with a gross vehicle weight rating between 6,000 lbs. and 14,000 lbs. may qualify for the deduction. If the vehicle is not, by its nature, used for personal reasons, it may qualify for the full deduction, which in 2012 is $139,000. For instance, a multi-passenger van, such as an airport shuttle, would qualify. A pickup with a full-sized cargo bed, capable of holding an item at least six feet in length, may also qualify.

[OKCTalker]

My two objections are: 1) The government shouldn't be in the business of picking winners and losers. I'm all for funding technological R&D - we all benefitted from money spent in the early days of the US manned spaceflight program - but not how government has done it in the past generation. 2) This company produces a car that benefits only the wealthy, not the masses - they can afford the sticker price, and benefit from the tax credits. I'd rather see government dollars go into a car that can be more widely-produced, purchased, used, maintained and studied. Those cars can pave the way for others, including luxury vehicles. This went backwards.

[Dubya61]

So, do these dealership laws prevent ownership in the states? or simply sales? Lets say that I live in Oklahoma (or North Carolina) and want to buy a Tesla. Can I go to California and purchase one and then register it in Oklahoma (or North Carolina)? Is it like buying your Volvo in Sweden and paying an extra fee to register it in CONUS?

[mkjeeves]

So, do these dealership laws prevent ownership in the states? or simply sales? Lets say that I live in Oklahoma (or North Carolina) and want to buy a Tesla. Can I go to California and purchase one and then register it in Oklahoma (or North Carolina)? Is it like buying your Volvo in Sweden and paying an extra fee to register it in CONUS?

That's how you do it but without physically going to California. You buy it on the phone and online. They email you papers. You sign them and send them back. You wire the money from your bank in whatever state to their bank in California. They hire a third party to deliver it to your home. (Or they used to. They might be delivering them in house now.) You register it at your local tag agent.

Yes. You could drive to California and do the same thing but you might have to make two trips. one to seal the deal and one to take physical delivery.

[hoya]

I'm very happy that Tesla is doing as well as they are, and I am a lifelong Republican. I would love for the opportunity to buy an affordable electric car. For years all I heard was that it couldn't be done, up until Tesla did it. They've got up to a 300 mile range right now. In the 9 years I've owned my F-150 that covers all but maybe a dozen trips that I've made.

The total tax credits they've given wouldn't cover 15 minutes worth of the War in Iraq. Steps toward reducing our oil consumption are always welcome.

[CuatrodeMayo]

I'm very happy that Tesla is doing as well as they are, and I am a lifelong Republican. I would love for the opportunity to buy an affordable electric car. For years all I heard was that it couldn't be done, up until Tesla did it. They've got up to a 300 mile range right now. In the 9 years I've owned my F-150 that covers all but maybe a dozen trips that I've made.

The total tax credits they've given wouldn't cover 15 minutes worth of the War in Iraq. Steps toward reducing our oil consumption are always welcome.

*like*

[mkjeeves]

Early adopters of Tesla products also do what most early adopters do despite whatever development money is involved from other sources, tax subsidies or tax breaks, they voluntarily take a hit to their wallets for doing so.

[RadicalModerate]

My two objections are: 1) The government shouldn't be in the business of picking winners and losers. I'm all for funding technological R&D - we all benefitted from money spent in the early days of the US manned spaceflight program - but not how government has done it in the past generation. 2) This company produces a car that benefits only the wealthy, not the masses - they can afford the sticker price, and benefit from the tax credits. I'd rather see government dollars go into a car that can be more widely-produced, purchased, used, maintained and studied. Those cars can pave the way for others, including luxury vehicles. This went backwards.

(i object to referencing The American People as The Masses.
It sounds vaguely Commie. =)

[Spartan]

Please say you're kidding. Does that mean you can't sell stuff on Craigslist, too? or online? Is it because they will miss out on some state tax on the purchase if not conducted through a dealer? Any idea?

Yeah you could say that...

Wait for it, we're only about a week away from the FOX machine churning out the label Obamacars

[Just the facts]

Yeah you could say that...

Wait for it, we're only about a week away from the FOX machine churning out the label Obamacars

Ummm... Already been done. Just google Obama Motors.

[bluedogok]

This thread is an example of how screwed up this country is. Republicans inserting an un-needed middleman in a private transaction, and the OKCTalk left wanting government out of the transaction.

Politicians of both parties give in to the will of the lobbyists and insert themselves into transactions all the time, neither party is blameless in the state of the US government.

Tesla started out buying Lotus shells and inserting their drivetrains in them while developing the Model S, it is an interesting concept. There is a Tesla showroom at Park Meadows Mall and service facility in South Denver. For people to make electric car development proceed there are going to have to be costs associated with it, that is why all of the EV's cost significantly more than a comparable gas engine model. Those costs will come down over time as development goes on, remember the IC car has been around over 100 years.

[OKCTalker]

Again, that's just not true. Or at least is narrowly viewing their role.

Would you say that SpaceX is a space program building rockets only for the wealthy corporations to lease? They are building a reusable rocket that will drive the cost of getting stuff to space silly cheap -- the kind of 'moonshot' step that will fundamentally change space/human interaction. But currently they are leasing for much closer to competitive rates. Why? The tech isn't quite there. They are close. Closest anyone has ever come. But you can't just SpaceX's success on a single frame of their short life. They are working toward a solution and they are darn near close to it.

Tesla is exactly the same thing. The government wasn't picking winners and losers. They invested in a technology. Technology that you can just R&D in a lab. You need cars. Thousands of test cars. Would you rather Tesla just scrap each car and not sell any?

The function of selling cars now accomplishes two major goals: 1) POC for retail market (again, waiting list) and 2) Delivery of real-world experimentation and a reliable feedback-loop.

This is NO different than any other R&D defense contract with Boeing. They pay Boeing to develop something. Boeing of course will commercialize the new tech in the long-term.

I don't presume you're in this camp -- I'm tired of people dogging on Tesla when they are accomplishing exactly what we'd want any company to do that was loaned taxpayer dollars for R&D. They are a text-book success story and frankly, should be used as a model for all R&D in the future. Find a company that wants to build as profitable as possible, even if that means high-end and don't get too caught up with the consumer solution right away. This is where we fail. The consumer versions of the new tech will always get cheaper and more accessible. It's the transition development that is hard to sustain.

Sid - SpaceX customers are governments and large corporations, they are succeeding where NASA lost its focus and became increasingly beaurocratic, and their initial funding of $100 million came from the founder of PayPal (successive rounds came from private equity firms). On the other hand, Tesla customers are individuals, they compete in an industry with dozens of established worldwide competitors, and their funding was largely governmental.

The irony - both companies were founded by the same person, Elon Musk.

[mkjeeves]

He's one of the best entrepreneurs of our time IMO.

[Larry OKC]

JTF: while true, the "subsidies" you cited applied to all brands/manufacturers, right?? I think what OKCTalker was mentioning was an additional "subsidy" for the Telsa???

And the GM=Government Motors...LOL

[Just the facts]

JTF: while true, the "subsidies" you cited applied to all brands/manufacturers, right?? I think what OKCTalker was mentioning was an additional "subsidy" for the Telsa???

And the GM=Government Motors...LOL

My point was that we live in a subsidized world. If my dog goes poo in the yard there are no less than 5 government subsidies at work in that action.

[hoya]

The government maintains a strong military presence in oil-producing areas, in large part to ensure a stable supply. If oil prices fluctuated wildly, going up to $500 a barrel because Iran got their panties in a wad, it would seriously affect the viability of gasoline powered cars.

The government maintains the Strategic Petroleum Reserve, a huge amount of oil it can release to curb supply shortages.

The government provided land and huge financial incentives to build the Alaska pipeline.

I could go on and on and on. I am not saying these moves were bad, but they are definitely subsidies. If we invested the same amount of money into the development of electric vehicles, we would live in a very different society.

[C_M_25]

The government maintains a strong military presence in oil-producing areas, in large part to ensure a stable supply. If oil prices fluctuated wildly, going up to $500 a barrel because Iran got their panties in a wad, it would seriously affect the viability of gasoline powered cars.

The government maintains the Strategic Petroleum Reserve, a huge amount of oil it can release to curb supply shortages.

The government provided land and huge financial incentives to build the Alaska pipeline.

I could go on and on and on. I am not saying these moves were bad, but they are definitely subsidies. If we invested the same amount of money into the development of electric vehicles, we would live in a very different society.

Good discussion, but there is one (maybe two) elephants in the room that nobody is discussing. First, it is the footprint of electric cars, or rather, their components. For oil, we drill a hole in the ground, pump some crap down there to break the rock, then we extract as much fluid as possible. In most cases, the well is eventually plugged and abandoned leaving behind a small pipe sticking out of the ground. Now, let me ask you: How many of you have ever been to a lithium mine? Nickel Mine? Any heavy metal mine? I've been to one of the countries strategic Lithium mines in Nevada. Its footprint spans one of the valleys that make up the basin and range province near Death Valley. You can look at aerial photographs of nickel mines in Canada to see their footprints (all those colors are not good btw.) You think that is bad, you should see the rare earth mines in China. It is a wasteland that can never be remediated. The media has done a very good job of hiding the TRUE impact of electric cars, but it is only a matter of time before more light is shed on the extraction of these resources. You need all of these minerals/metals for the batteries and electric motors for these electric cars.

Also, how does our 'grid' handle the new demand that will be put on it from electric cars? This is clearly a secondary concern, but it is a problem nonetheless. Houston nearly consumes more electricity than can be output (rolling blackouts during the summer). Our electrical grid across the country is in pretty bad shape and will probably need to be upgraded IF electric vehicles take off. This would take considerable expense. OR, you can build more power plants. Nuclear? Nah, the EPA won't allow those to be built right now. Coal Fired? Nah, EPA again. Solar, wind? Good start, but these need significant technological advancement to become efficient. Nat. Gas? Sure, but you need quite a few of these given their smaller energy output.

On a side note, which is worse: a lot of pollution coming from several point sources (power plants), or a lot of pollution distributed across the country (gas cars)?

All that said, we NEED some type of advancement in technology to meet our energy/transportation needs, but everything we keep chasing just leads us down the same path. Now, if we could figure out FUSION, then we will be all set

[mkjeeves]

Good discussion, but there is one (maybe two) elephants in the room that nobody is discussing. First, it is the footprint of electric cars, or rather, their components. For oil, we drill a hole in the ground, pump some crap down there to break the rock, then we extract as much fluid as possible. In most cases, the well is eventually plugged and abandoned leaving behind a small pipe sticking out of the ground.

Wow. Yeah. Elephant in the room. Deepwater Horizon, Exxon Valdez, Arkansas pipeline spill the other day and things like this notwithstanding...



Tar sands mine in Canada.

[C_M_25]

Wow. Yeah. Elephant in the room. Deepwater Horizon, Exxon Valdez, Arkansas pipeline spill the other day and things like this notwithstanding...



Tar sands mine in Canada.

Yes those are terrible accidents and they do happen from time to time although they are extremely rare considering how many wells are drilled on a yearly basis and how much crude is transported on a daily basis. I agree too that tar sands are bad but that is not oil exploration in the traditional sense. I actually lump that method of extraction with nickel strip mines, etc. Either way, you can't argue against the fact that electric cars are not as "green" as they are made out to be.

[mkjeeves]

Sure. Lets pretend...

[C_M_25]

Sure. Lets pretend...

Obviously you already have your mind made up. You pick the most extreme method of hydrocarbon exploration and refuse to face facts. How about this fact: 1, count it, ONE horizontal natural gas well averages 267,362 equivalent gallons of fuel PER DAY! From one hole in the ground with a footprint of maybe an acre. CNG vehicles are as efficient and environmentally friendly as any other alternative out there, yet it doesn't get the publicity as electric cars. Why? Probably because people like you have it in your head that all hydrocarbon exploration is like the picture you showed when in fact that it is not. Yet, people hold on to this belief that electric cars are the best thing since sliced bread, but they are unwilling to accept the photographs that I have referenced of all the strip mining that goes in to creating the batteries that electric cars rely on. I just don't get it....

[Just the facts]

I am for building stuff close enough together that they can be reached by foot or bicycle 90% of the time - and mass transit the other 10%, which leaves no need for cars (gas, cng, electric, or otherwise) and all the expensive infrastructure that goes with it. If we spent the last 60 years developing cities they way we did the previous 10,000 years we would live in a much different world.

[hoya]

Obviously you already have your mind made up. You pick the most extreme method of hydrocarbon exploration and refuse to face facts. How about this fact: 1, count it, ONE horizontal natural gas well averages 267,362 equivalent gallons of fuel PER DAY! From one hole in the ground with a footprint of maybe an acre. CNG vehicles are as efficient and environmentally friendly as any other alternative out there, yet it doesn't get the publicity as electric cars. Why? Probably because people like you have it in your head that all hydrocarbon exploration is like the picture you showed when in fact that it is not. Yet, people hold on to this belief that electric cars are the best thing since sliced bread, but they are unwilling to accept the photographs that I have referenced of all the strip mining that goes in to creating the batteries that electric cars rely on. I just don't get it....

Don't mistake me for some froofy hippy tree hugger. Oil and natural gas are a vital part of this state's economy. I don't think we are in any danger of going away from it any time soon. That said, when electric cars come down in price I may get one. Every source of power we have creates some sort of environmental consequence. The advantage to heavy metal mining is that as long as guidelines are followed, the crap stays there. A mining site in Nevada may be contaminated, but I won't be breathing it in. It's much more localized and easier to contain.