

Tesla Motors by the numbers - forgingahead
http://online.wsj.com/article/SB10001424127887324659404578499460139237952.html

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jmduke
Criticisms of Tesla (both posts and comments) seem to draw an unwarranted
level of ire on HN. I think its the combination of Elon Musk's personality,
the increasing inevitability of the ubiquity of electric cars, and the
tendency to use Tesla v. <other carmakers> as an underdog allegory (Lord knows
how many times "Tesla" and "disrupt" appear in the same sentence.)

A lot of the comments on this article seem needlessly ad hominem, calling the
author a "whiner" and "wicked." While I don't see eye-to-eye with every point
the author makes, I think the underlying argument -- that a lot of the praise
of Tesla's results so far has been under the assumption that its purely the
car responsible for these profits. (The crudely phrased press release about
Tesla paying back loans "before any other US manufacturer" certainly doesn't
help the notion that Tesla is loosely playing the marketing game.)

It's entirely possible to laud Musk and Tesla's work so far while also being
cognizant that, hey, the company isn't sterling and there's still a lot of
work to be done before we consider the Tesla a success.

~~~
Goronmon
I think the problem I have with the article is that it makes no effort to
truly analyze the issue at hand. The important questions revolve around
whether such programs are important as long term investment or whether
investments in Tesla couldn't have been spent better elsewhere.

Instead the author seems to make the issue too simple.

1) Spending tax payer money is bad.

2) Tesla is taking tax payer money.

3) Tesla is bad.

Or to pull examples from the article.

 _But such a success must still be measured against other taxpayer losses and
misallocated capital._

Yes, and where are the author's measurements?

 _Why should middle-class taxpayers whose incomes are falling still pay to
subsidize the purchase of cars that only the affluent can afford, and then
partly as a gesture of their superior environmental virtue? When does the rest
of America get its return on Tesla's profits?_

And why doesn't the author attempt to answer these questions? Of course, you
could assume these are rhetorical, but again, I'm not sure why that's useful.

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ams6110
I have nothing against Tesla. But the fact of the matter is that cars like
Tesla make are impractical for the vast majority of drivers. They are doing
great selling into a niche market that find the cars appealing, but that
proves nothing about the future of electric automobiles for the mass market.
None of them would be even as successful as they are without massive support
from government grants and tax credits. Free charging is not sustainable, and
our current electrical infrastructure won't support massive adoption of plug-
in electrics without significant upgrading. It will be decades if not longer
before electric vehicles are a workable option for most people.

~~~
rossjudson
You need an editor, sir! Your true meaning is lost. Let me rewrite that for
you.

 _I don't like Tesla. A Tesla car isn't practical for me, so by extension it's
not practical for most. Massive popularity and interest in buying them proves
nothing about the future because I don't have one. Other electric cars failed
after receiving public support, and therefore Tesla will fail. Even though
nobody claims free charging is sustainable, I claim that non-existent claim
will lead to failure, because it's impossible to change our current electrical
infrastructure. Ever. And a decade into the future? That's crazy! We need to
deal with what's in front of us for the next ten minutes! And after that,
we'll do it again!_

~~~
bob13579
Sorry, but I don't feel like spending $7K+ in taxpayer subsidies to help a
rich person get richer is wise fiscal policy for our nation. I know this might
sound completely shocking to you.

~~~
rossjudson
You see no value in shepherding the companies that are creating the future of
transportation across the world? You may reason that market forces will take
care of it, and I would agree with you if _other countries played by the same
rules_. They do not.

This is about a lot more than a rich person getting richer, and you know that.
I'm a little shocked that you would pretend otherwise.

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jpeg_hero
What kind of wicked person is motivated to write this up? Hunched over in his
dark cave?

I just visualized myself 20 years in the future, reading this I saw it as the
myopic retrograde reactionary writting of a small minded man, that it is. Soon
to be lost on the tides of progress.

~~~
skaevola
A person who is interested in seeing facts come to light? That these facts
threaten your progressive future is irrelevant to the morality of that person.

~~~
rattray
I agree that it was nice to hear the breakdown of Tesla's financial
relationship with US governments (federal and state), but the author's tone
was remarkably one-sided, in a way that could in fact be described as
"wicked", though I think that's taking it a bit far.

To me, those numbers were a cause for celebration: wow, our government is
actually effectively encouraging a terrific technology and company.

~~~
skaevola
Sure, it's opinionated, but it's only wicked if you think that viewpoints
which disagree with your own are evil. And _that_ is an extremely dangerous
idea.

By the way, I agree with you; subsidies should be used to promote products
with positive externalities.

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bjourne
What a whiner. Truth is all major companies receive state subsidies in some
form. Auto makers get cheap loans, banks get bailouts, agriculture get
beneficial import tariffs, pharmaceutical get free medicine research, defense
companies get new wars etc. If they don't, they can usually bitch and moan and
threaten to move production to a third world country unless they get a tax
rebate. Makes sense that a company that can be beneficial to society should
also get it.

~~~
bob13579
The difference is that not one company is blatantly favored over another in
those industries.

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ph0rque
_Rarely noted is how much this profit is a function of government subsidy and
coercion. So let's take apart Tesla by the numbers, if only to give our
reader-taxpayers a better sense of what they've paid to make Tesla's owners
rich._

I don't really want to read further, and it's only the second paragraph.

~~~
rossjudson
I welcome a similar analysis of oil companies by the WSJ. And banks. And Wall
Street generally.

I suspect I will die waiting for that one.

~~~
adventured
[http://online.wsj.com/article/SB1000142405270230453790457727...](http://online.wsj.com/article/SB10001424052702304537904577277440911481180.html)

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MikeCapone
Removing incentives for EVs would be fine if we could somehow retroactively
remove incentives, direct and indirect, for oil and gas cars. Just military
actions and bases around the world to secure oil probably runs in the hundreds
of billions added to the taxpayers' bill.

It's not a few millions, temporary (incentives for EVs won't last forever),
that would be at the top of my list of things to cut in a trillion dollar
economy.

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bradfordarner
It is fascinating to step back and realize that this WSJ article is indicative
of the fact that Tesla has yet to 'cross the chasm'. I can't wait to get a
Tesla and most of my friends are of the same mind, but we are clearly still
among the minority. While most of us associated with the tech world are
naturally supportive of Elon Musk and cheering him on with force, we must
still be the minority. Man...I'm such an early adopter! What a shameful thing
to be! (Read strong tone of sarcasm)

The underlying principle of the article seems to be one of anti-subsidy, a
position which is imminently defensible in light of many problematic
government subsidies. Tesla still has a lot to prove. That being said, the
author failed to set up a balanced argument since he did not mention the fact
that most long-lasting companies have been subsidized by the government at one
time or another in their history and many at their infancy.

Did I mention that Elon Musk is freaking awesome!!!

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nmcfarl
I think that large government subsidies are inevitably going to be needed if
you wish to start a car company these days. They may be inevitable if you just
want to keep one running - very few car companies have made it through the
last decade without some form of government help.

\--

Plus I'm pretty sure the WSJ would be decry Tesla's stupidity if the left this
money on the table. These incentives weren't designed fir Tesla, they just
take advantage of them.

~~~
ams6110
_very few car companies have made it through the last decade without some form
of government help._

So keeping dinosaur companies on life support with tax dollars is a good
thing?

~~~
jaynos
If the alternative is not enough supply to meet demand,yes. Private capital
might be better, but how much would private firms be willing to risk on a new
company? Also, could that company scale up to build 1 million cars per year to
supply American demand?

GM was not run very intelligently in the '90s (and '80s and '00s), so I
definitely feel the urge to let them die, but the economic damage of the
100,000+ layoffs would cost more than the auto bailout.

~~~
refurb
I don't understand this line of thinking, particularly from the Hacker News
crowd.

Nobody seems to care if taxi drivers lose out from services like Lyft and
Uber. It's called "disruption" and is apparently good for the economy.

A dinosaur like GM loses market share to imports and the same crowd thinks
gov't subsidies are required to keep an inefficient industry alive.

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ebbv
There are so many things wrong with this article.

First of all, Tesla is paying back its federal loan 9 years early. So all the
stuff about what we taxpayers have paid for is bogus.

The carbon credits issue is brought up as though we already agree that it's
wrong/bad with no discussion. I don't agree. I think it's clearly the right
way to go, and other manufacturers should be moving to EVs.

The phrase "environmentalist Bjorn Lomborg" should qualify as slander against
all environmentalists. He is the opposite of an environmentalist. Every step
of the way he's been arguing against fighting climate change. He's a shill for
the status quo, and whenever you see someone cite him, you can rest assured
they are arguing for oil, coal, etc.

Tesla is about the future. Anyone without vision is going to clearly be upset
about the compromises we have to make now in order to get us where we want to
be.

But those people would be the same ones moaning about how much money we're
wasting on NASA in 1964.

~~~
lambda
We taxpayers are still paying in the form of the tax credits you get for
buying EVs.

Why is it that I pay $7,500 more in federal taxes for riding my bicycle to
work than someone who purchases a $70,000 luxury car? Why don't people who
don't even own a car in the first place, and take the bus to work, get that
tax credit? We're basically transferring wealth from the middle class to the
wealthy by offering these sorts of tax credits (at least, in the case of
Tesla; other manufacturers like Nissan are offering more affordable electric
cars that are actually within the price range of the middle class).

By offering a tax credit to people who buy electric cars, yes, the average
taxpayer is still funding Tesla.

Now, the carbon credits are another issue. I think that those are somewhat
more reasonable; you are making the manufacturers of vehicles that have
substantial negative externalities fund ones that have significantly less.

Again, though, I wonder why only other automobile manufacturers are able to
sell these credits; it would be nice for, say, bicycle manufacturers, electric
bike manufacturers, public transit systems, and municipalities which build
infrastructure more suitable for living without cars to be able to sell
credits as well. Only allowing automobile manufacturers to be in the game
means that you are still supporting transportation that requires each
individual person to haul around a couple of tons of metal with them for 20 or
more miles a day, taking up lots of extra space for storing them both at home
and at work, leading to congestion and the necessity for more money to go into
infrastructure.

~~~
ebbv
As pointed out elsewhere, if you are wealthy (qualify for the Alternate
Minimum Tax) you don't get the tax credit. So that claim is false.

Secondly, the total cost of those tax credits is miniscule. We subsidize a lot
of other much worse things a lot more. If you're going to get up in arms about
tax subsidies, we'll be here all day.

Additionally, EV subsidies are not unique to Tesla. The only thing that was
unique to them was the loan which they're paying back early. So bringing up
the rest of it in an article ostensibly about Tesla is a bit misleading.

I think EV subsidies make sense, and I made the point of NASA for a reason.
Sometimes when we have an important goal (interstate freeway, getting to the
moon, moving the entire country over to electric vehicles) it's worth
investing in.

You may disagree, and you can express that disagreement by writing to your
local Congress critters and by voting.

~~~
lambda
> As pointed out elsewhere, if you are wealthy (qualify for the Alternate
> Minimum Tax) you don't get the tax credit. So that claim is false.

Source? Everyone in this thread on the Tesla forum seems to think that you can
still get the credit if you pay AMT:
[http://www.teslamotorsclub.com/showthread.php/9263-Is-7500-t...](http://www.teslamotorsclub.com/showthread.php/9263-Is-7500-tax-
credit-lost-if-you-are-subject-to-the-Alternative-Minimum-Tax)

And if you check IRS form 1040 <http://www.irs.gov/pub/irs-pdf/f1040.pdf> and
its instructions <http://www.irs.gov/pub/irs-pdf/i1040.pdf>, you will see that
the tax credit for electric vehicles is added to line 53, which is subtracted
from your tax liability whether or not you paid AMT (line 45). AMT applies to
taxable income, preventing you from claiming exemptions if your income is over
a certain amount. Tax credits apply to your tax liability, which are
subtracted after computing your tax and alternative minimum tax.

So yes, you get the tax credit no matter how wealthy you are.

> I think EV subsidies make sense, and I made the point of NASA for a reason.
> Sometimes when we have an important goal (interstate freeway, getting to the
> moon, moving the entire country over to electric vehicles) it's worth
> investing in.

I agree that EV subsidies are worthwhile, but I think that there are better
places that we could apply subsidies, such as all of the other infrastructure
improvements I suggested, and promoting low-car lifestyles rather than pouring
all of that investment into alternative types of cars. But those other
improvements aren't as sexy, because they frequently don't involve exciting
new technologies but instead simple restraint, better planning, and investment
in things that are associated with lower classes (busses, trains, dense urban
planning), rather than upper and middle classes (sexy cars, suburban living).

And you know, another way for me to disagree is doing exactly what I'm doing
here; trying to urge restraint of many people who think that Tesla is so
amazing and so much the future that they lose sight of other, simpler, cheaper
ways of solving the problems that Tesla is supposedly solving. There are an
awful lot of people here who equate negative opinions of Tesla with being
evil, backward thinking, luddites, while really, some people are just asking
"is Tesla really profitable (as paying off the loan early might make you
believe), or are they still making money off of the taxpayer and zero-emission
credits paid for by other manufacturers? How long should the taxpayer fund
toys for the wealthy in order to help bootstrap an EV manufacturing industry,
as opposed to putting money into other, even more sustainable infrastructure
improvements?"

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turkeybone
The more angry and nervous that Tesla makes people (car dealers, other car
companies, fellows like the author), the more convinced that they will have
significant impact in the future.

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calinet6
This reads like an Anton Ego review from Ratatouille before the rat hit him
with the thing he could never see coming in a million years.

Seriously, read it in Anton Ego's voice. It's fantastic.

Obviously completely short-sighted and narrow minded, as is expected from the
WSJ. Move along, nothing to see here.

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coldcode
Why does anyone read WSJ anymore?

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gpcz
> Why does anyone read WSJ anymore?

Currently, your post is at DH1 (<http://paulgraham.com/disagree.html>). What
point in the article do you disagree with and why?

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arethuza
Apologies for going a bit meta, but that would make a pretty good rating
scheme for comments on here - DH6 through to AH6...

~~~
pilgrim689
I wonder if pg considered this: replacing up/down arrows with such a scale
(0-name calling, 1-ad hominem, etc.) to force users to think about what
up/down _means_ every time they vote.

~~~
kenny_r
That's very similar to Slashdot's moderating system, which I think is great.

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josefresco
Uhg. IMHO there's a reason Digg and Reddit (and it's HN offspring) grew to
prominence and it's partly due to Slashdot's confusing and archaic moderating
system. I've been visiting for years and still don't fully understand, or care
to decode how the system of moderating and nested comments works.

