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Should Taxpayers Back Cars Only the Rich Can Afford?
theodp writes "The NY Times questions the $400M in low-interest federal loans requested by Tesla Motors as part of the $25B loan package for the auto industry passed by Congress last year. 'The program is intended to encourage automakers to improve fuel efficiency, but should it be used for a purpose like this, as the 2008 Bailout of Very, Very High-Net-Worth Individuals Who Invested in Tesla Motors Act?' Tesla says it is assembling about 15 cars a week and has delivered about 80 of its $109,000 base-price Roadsters to date, many of which have gone to the Valley's billionaires and centimillionaires who are Tesla investors as well as early customers. We discussed the company's financial difficulties last month."
Think about it. Even though a Tesla costs 100k, every one on the road is one less gas car on the road, crudding up the atmosphere and using up irreplacable oil. Not only that, but Tesla's future success relies on selling cars at a fraction of that price at some point. Early adoption is expensive, but without it, there can be no commodity market for the same product. Look at DVD players, for example. Early models were $1000, and there were only a few titles available for the first Christmas season. Now, players can be had for $30, and stores don't even stock VHS any more. If we don't support this technology now, while it needs subsidies, at what point will the market decide that it IS worth it? When gas is $10 a gallon? $20? $40?