

Tesla Is Going Public - mlinsey
http://www.wired.com/autopia/2010/01/teslas-going-public/

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plutus
The U.S. government provided a $465 million loan to a tiny money-losing
startup and got no equity in return.

Now Tesla insiders are leveraging that taxpayer loan to IPO.

Is this free enterprise or just corruption?

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jbooth
A) Compare that number to the amount that defense contractors receive for not
even delivering anything. The Tesla car works.

B) Compare that number with the inflation-adjusted amount that the government
has put into other research ventures. Like, say, THE INTERNET.

C) Tesla says that it is now profitable
[http://www.techcrunch.com/2009/08/07/tesla-says-it-is-now-
pr...](http://www.techcrunch.com/2009/08/07/tesla-says-it-is-now-profitable-
ships-109-roadsters-in-july/).

What's your problem with better technology here?

~~~
plutus
My problem is that taxpayers have the most at risk with this company, but get
none of the upside.

There is a huge difference between government funding for basic research, and
government funding to bring a privately owned product to market.

Even worse, since Daimler is a Tesla shareholder, U.S. taxpayers are
underwriting tech that is partially owned by a foreign competitor.

~~~
jbooth
The department of energy routinely gives low-interest loans to interesting
energy startups because there's a compelling national interest in renewable
energy.

So, yeah, we're on the hook for 500m. But we just spent a trillion in Iraq.
And when we hit peak oil and hit a point of total supply inelasticity for
energy, we're really gonna be up a creek.

There are literally thousands of companies that get these loans. I invested in
one called Beacon Power, they build electrical grid stabilizers based on
flywheels -- suck in excess power during supply peaks, then spit it back out
if everyone turns on their AC units at once. Great idea. Helps the whole
economy if they succeed, not just them. So the dept of energy took the long
view and threw them a few million dollars as a loan.

All in all, this stuff adds up to way less than 1% of domestic federal
spending -- which itself is less than 1/6 of the total federal budget. If a
few of them pan out and we reduce our dependence on foreign oil, then it's a
win.

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Shamiq
Holy wow. Maybe we'll get to see where these guys are spending their money.

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phil
Why wait?

[http://www.sec.gov/Archives/edgar/data/1318605/0001193125100...](http://www.sec.gov/Archives/edgar/data/1318605/000119312510017054/ds1.htm#toc51863_4)

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electromagnetic
Maybe it should go Government, then perhaps the outrageous prices and its
haemorrhaging of cash won't seem out of place . . . just a suggestion.

I'd much prefer my tax dollars subsidizing my car than subsidizing cheap
fishing and agriculture.

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MikeCapone
> its haemorrhaging of cash

Could you cite your sources please.

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defen
From the article:

The SEC filing provides the first clear look at the company’s finances. It
notes that Tesla has lost "approximately $236.4 million from our inception
through Sept. 30, 2009"

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coffeemug
From what I understand their inception is 2001, which means they've lost about
$30mil/year. That doesn't sound excessive to me at all. Software startups
normally count $15k/employee/month as a reasonable expense (including
hardware, rent, benefits, etc.) Given how massive the equipment and production
expenses for an auto company can be, I wouldn't be surprised if their number
is three times as high. At only 500 employees (again, a very small estimate
for an auto company) that would put their expenses at 45k/month * 12 * 500 =
$270mil/year. Considering that they've lost only $240 mil in _eight_ years,
they're doing _extremely_ well.

I can't even imagine the amount of effort and capital required to pull
something like this off. If anything, I'm surprised how well they're actually
doing so far.

~~~
gd123
I'm sorry, but losing $30M in one year is bad. Losing $30M for 8 years is
excessively bad. Tesla is bleeding cash left and right and its CEO is flying
jets to get around while taking in $450M in taxpayer money for loans, and then
files for an IPO a week later.

Musk (its CEO) had mentioned that Tesla would be profitable in 2009, and
that's clearly not the case. Stating that losing $240 million in 8 years is
doing "extremely well" is irresponsible to impressionable investors looking
forward to Tesla's IPO.

~~~
halo
As a data-point, Amazon lost $3b over their first 6 years before turning a
profit (citation: [http://www.independent.co.uk/news/business/news/dotcom-
delig...](http://www.independent.co.uk/news/business/news/dotcom-delight-as-
amazon-makes-first-profit-after-3bn-losses-665950.html)) .

~~~
yahoog
Apples and oranges. Amazon put profits back into their company. They had a
business model that worked. Tesla doesn't.

~~~
jbooth
Argument by assertion? You can't just state something like that and not back
it up. Unless you want to look ignorant.

Tesla sells cars. After building them. For more than it cost to build the car.
That's a business model.

And they're profitable as of this year, as I cited above, and you keep
refusing to acknowledge.

~~~
yahoog
1\. Tesla is not profitable.

2\. Tesla currently has no profitable business model.

If you want facts, please Google them. Here's a start that's titled "Tesla
Motors Files For IPO - So Much For The Profits":
[http://blogs.wsj.com/venturecapital/2010/01/29/tesla-
motors-...](http://blogs.wsj.com/venturecapital/2010/01/29/tesla-motors-files-
for-ipo-so-much-for-the-profits/?mod=rss_WSJBlog)

~~~
jbooth
Well, there's different ways to calculate those numbers. If I had to guess,
Tesla was referring to EBITA and the WSJ is calling them unprofitable after
interest and taxes.

At any rate, it's ridiculous to try and claim that they don't have a business
model. If they're selling the cars for more money than the incremental unit
cost, then they do indeed have a profitable business model.

They may not be selling enough of them yet to have a profitable company but
claiming that they don't have a business model is just being obtuse.

Are you claiming that in 2001, Amazon had no business model? Because that
would be the same thing.

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elblanco
Fail....ah heck...I'll probably buy a few shares anyways...who knows...

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rms
Who's buying?

