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Tesla Nabs $465M Government Loan To Build Model S

Posted by timothy on from the let's-call-it-the-people's-car dept.

SignalFreq writes "Tesla Motors, based in San Carlos, California, was approved yesterday for $465M in loans from the Department of Energy's Advanced Technology Vehicles Manufacturing program. Tesla plans to use $365M of the money to finance a manufacturing facility for the Model S (review, Letterman video) and $100M for a powertrain manufacturing plant in the SF Bay Area. 'Tesla will use the ATVM loan precisely the way that Congress intended — as the capital needed to build sustainable transport,' said Tesla CEO and Product Architect Elon Musk. Tesla expects the Model S to ship in late 2011 and the base cost to be $57,400 ($49,900 after a federal tax credit). Ford received $5.9B and Nissan received $1.6B under the same program."

70 of 505 comments (clear)

  1. A requirement for the loan by geekoid · · Score: 2, Insightful

    should have been a 25K car cost cap.
    That way most people could only barely not afford it.

    --
    The Kruger Dunning explains most post on /. http://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect
    1. Re:A requirement for the loan by Darkness404 · · Score: 3, Informative

      Um, as far as I know, Ford hasn't taken any of the bailout money, nor is Ford bankrupt, unlike Chrysler and GM.

      --
      Taxation is legalized theft, no more, no less.
    2. Re:A requirement for the loan by speroni · · Score: 2, Insightful

      Do government car-maker loans work the same way as student loans? For a student loan, you have to pay it back with interest regardless of what happens. Can't get out of a student loan going bankrupt or anything?

      --
      Eschew Obfuscation
    3. Re:A requirement for the loan by 644bd346996 · · Score: 5, Insightful

      The technology does not exist yet to make a $25k electric car that can succeed in the American market. Tesla is right to start with the high-price, high-profit end of the market and work their way down to the high-volume mainstream as the technology matures and the supply chain scales up. Trying to start out by making a capable electric car for the mainstream American market is a much riskier move, and requires much more up-front money - hence the much larger handouts that have gone to the more established automakers. Tesla, on the other hand, has already established their electric vehicle business as profitable, and can use their profits and experience from the Roadster to help subsidize the development of the Model S.

    4. Re:A requirement for the loan by wildsurf · · Score: 4, Insightful

      should have been a 25K car cost cap.

      In the electric car industry, that's simply too big a jump to make all at once. If your ultimate goal is to produce 200,000 $25k cars a year, and the current state of the art is 2,000 $100k cars a year (the Tesla Roadster), then it's only reasonable to expect to produce 20,000 $50k cars (the Tesla Model S) as a stepping-stone. The market is there, and those early adopters will facilitate the eventual availability of the $25k mass-market car you're talking about. If you do the math, the "rich" purchasers of the Model S will be kicking in about one billion dollars a year towards this goal, double the government loan amount. So think before you knock 'em.

      --
      Weeks of coding saves hours of planning.
    5. Re:A requirement for the loan by Rei · · Score: 5, Informative

      Exactly. Tesla's approach is perfectly cogent. Starting a car company is a *huge* expense. Look at what Coda is having to go through to bring a new car to the US -- they mentioned that they still need to crash another *30 to 40 cars* to get certified. And that's just the half of it. There are no volume parts producers for EV components. Look at the Roadster transmission fiasco -- there literally was no multi-gear transmission in the world that would work with their motor, and when they spent a fortune trying to get a company to engineer one for them, what they ended up with couldn't take the stress.

      The logical approach, then, is to piggyback as much work as you can onto that of an existing manufacturer (in this case, Lotus), focus only on what's different, and start at the high end so that you can absorb the capital costs into the vehicle price without creating sticker shock. People expect a carbon fiber car that does 0-60 in 4 seconds to be expensive. The fact that low-volume EV drivetrain components are super-expensive doesn't matter there, because so are the low-volume ICE components that they compete against.

      This is the next logical step: an independently developed, not-piggybacked, luxury sedan. This means building a large-volume factory, with a chassis developed from scratch that's designed for your EV needs. Of course, this is incredibly expensive. Hence the need to raise a ton of capital. In the middle of a financial crisis. :P

      Once they've retired that risk, even higher volumes/lower prices become realistic. Which is their plan with the Bluestar.

      That seems to be the same approach being taken by Fisker. I think a reasonable alternative approach is that being taken by Aptera. Three wheels to skirt the federal requirements, but put a heavy *independent* focus on safety, with a vehicle that's so uber-streamlined and lightweight that it simply doesn't need a powerful drivetrain or large battery pack to perform well. Hence they can start at near the bottom of the market, where there is a lot less competition. Once they're rolling off the lines, you can expect to see from them what Tesla is doing now -- raising large amounts of money to build a factory for a more mainstream, higher volume sedan (although they'll almost certainly keep their extreme-efficiency focus).

      --
      I tore these out of your symbol, and they turned into paper.
    6. Re:A requirement for the loan by ivucica · · Score: 3, Informative

      Well, at least they're having more luck squeezing money out of people than real Nikola Tesla...

      Despite having sold his AC electricity patents, Tesla was destitute and died with significant debts. Later that year the US Supreme Court upheld Tesla's patent number, in effect recognizing him as the inventor of radio.

      Immediately after Tesla's death became known, the government's Alien Property Custodian office took possession of his papers and property, despite his US citizenship. His safe at the hotel was also opened.

      ...

      Tesla's family and the Yugoslav embassy struggled with the American authorities to gain these items after his death due to the potential significance of some of his research.

    7. Re:A requirement for the loan by falconwolf · · Score: 2, Interesting

      should have been a 25K car cost cap.

      As with computers early adopters will help finance more affordable cars.

      In general I oppose subsidies but at least this money has to be repaid, and some of the money will be used to open a factory employing people.

      Falcon

      --
      Should there be a Law?
    8. Re:A requirement for the loan by mattwarden · · Score: 2, Insightful

      Yes, government price fixing... That's what we need to save the car industry and promote innovation!

    9. Re:A requirement for the loan by shutdown+-p+now · · Score: 2, Insightful

      Why is the parent modded troll? She quite correctly points out that Ford has received a far larger cheque than Tesla, and essentially for the same general purpose - "improving fuel economy". Yes, this isn't bailout money; but neither is Tesla being bailed out. It's very much a fair apples-to-apples comparison.

  2. Re:More bullshit by fiannaFailMan · · Score: 5, Funny

    More bullshit courtesy of the U.S. Gubmint!

    I know. Just like those silly Interstate highways, the US Marine Corps, the US Postal Service that'll deliver a package of paper to any door in the US within a day or two for an affordable flat fee, and those terribly inefficient and socialized Firefighters and that neo-communist socialized Police Department. Government. Pah! Who needs it?

    --
    Drill baby drill - on Mars
  3. Green Car on a Budget - Innovation Not Required by abroadst · · Score: 2, Interesting

    I'm anti-subsidy for luxury car manufacturers. Starting at $49,900 -- bah! How about spending a fraction of this to rip out the engine of a Chevy Aveo and put in an electric motor? How about an electric car people can actually buy? Innovation not required!

    1. Re:Green Car on a Budget - Innovation Not Required by WaywardGeek · · Score: 5, Informative

      Tesla is the only company in the world selling production electric cars that are fully street-legal. They started with a $100K car, and now they're doing a $50K car. They have a $30K car planned for after that.

      Basically, you need economies of scale to get the cost of these cars down. Tesla's riding that curve, and plans to eventually have cheaper cars than Ford. This is a potentially great place to invest in American innovation, not to mention the environmental benefits or jobs.

      --
      Celebrate failure, and then learn from it - Nolan Bushnell
    2. Re:Green Car on a Budget - Innovation Not Required by WebCowboy · · Score: 4, Insightful

      I'm anti-subsidy for luxury car manufacturers. Starting at $49,900 -- bah! How about spending a fraction of this to rip out the engine of a Chevy Aveo and put in an electric motor? How about an electric car people can actually buy? Innovation not required!

      There is a bit more to the Tesla cars than just ripping out the ICE and putting in a regular electric motor. There is very advanced liquid-cooled Lithium Ion battery technology, a next-gen 3-phase/4 pole motor, etc. It performs at par or better than other cars in its price point, and is also practical (can carry 5 passengers and their luggage comfortably). It is easily 200 to 300 percent more energy efficient than a typical hybrid as well. Luxury or not, getting such a vehicle to market is very worthwhile. Remember the Prius was the favourite toy of green-wannabe celebrities and rich folk in its early adoption phase, and this is a much better alternative.

      Given the nature of the technology this is the ONLY way to bring it forward. I think GM's approach (with bringing out a less exotic Chevy Volt) or yours (an even more austere Aveo) is backwards. Say it costs $5000 to $10000 to implement the advanced battery and drivetrain at this point in development. This means the cost of an electric Aveo would be 50+ percent higher than for a gas one, which is "cheap enough" to run in the first place. NOBODY who is willing to be an "early adopter" would buy an electric aveo at a profitable price point, because green and innovative as the drivetrain would be, the rest of the car is actually rather crappy.

      OTOH, The Tesla S is probably no more tha 10 or 20% more expensive than a comparable car that runs on petroleum fuel. Early adopters tend to be more affluent as well, and when you get to that less-than-20% premium for something cool and new. This car has a realistic chance of making a profit, or at least paying back its loans. The Volt or an electric Aveo would be a guaranteed money loser.

      Remember, that Tesla got its loans specifically because it has committed to re-investing profits from early, more exotic/expensive models into more practical, affordable models. Even in its early stages on the market it has established a track record: It followed up an exotic, very expensive roadster with a luxury sedan that is actually very practical and within the price range of upper-middle class households (the ones who buy Escalades, BMW 5 or 7 series, etc). Ensuring the success of the S means the much more likely possibility of an under $30K vehicle that competes right in the mainstream sedan market.

      If the US is going to get all socialist on us, I'm glad it isn't following the tired old thinking that to support innovation it must have this fixation on immediately addressing the needs of the "masses" or "working poor" or that crap, when it isn't realistic from a business perspective. Certainly better than taking a controlling interest in a loser bankrupt GM or gifting Chrysler to the unions--doing both with massive loans backing the moves (if taxpayers weren't forced to accept such nonsense, thay'd never in their right mind invest in such shaky enterprises). GM in particular has been the ABSOLUTE LEAST INNOVATIVE auto company on the entire planet for decades--even its best products are dependable but very boring and un-innovative, and they've invested the least into new technologies in their plants out of EVERY SINGLE company that builds cars in N America.

      If my gov't is going to throw boatloads of cash around on speculative enterprises, I'd MUCH rather it go do something bold, new, exciting and innovative like Tesla than something tired, old and nothing to show for in terms of innovation than words and vague plans crafted for the purpose of begging for alms from the gov't. as GM and Chrysler have done in the last year.

    3. Re:Green Car on a Budget - Innovation Not Required by Jeremi · · Score: 2, Insightful

      How about an electric car people can actually buy? Innovation not required!

      It's not sufficient to build a car that people can buy, it also has to be a car they want to buy, or it won't sell.

      Various companies have tried the "rip out the engine of a standard car and replace it with an electric motor" route before, and it doesn't work. You end up selling what looks like a $15,000 car for $35,000, and the car has a top speed of 70 miles an hour, a range of 40 miles, and takes 6 hours to "refill". The public has already said thanks, but no thanks, to that type of product.

      If you actually want to sell electric cars, you have to make them good enough that people will want to buy them, and that means designing them from the ground up as electric cars, not retrofitting an electric motor into an inappropriate framework.

      --


      I don't care if it's 90,000 hectares. That lake was not my doing.
    4. Re:Green Car on a Budget - Innovation Not Required by WaywardGeek · · Score: 3, Informative

      BYD F3DM is a hybrid, and only sold in China to the government and corporations.
      The Mitsubishi MiEV is still in research phase, and I wouldn't hold your breath waiting for a US version
      The Subaru Stella EV is still only a concept car, though it may be sold soon in Japan. Again, good luck getting one here.
      AC Propulsion E-Box? Seriously? It's a $55K conversion kit, not a car, and it converts a crummy $15K car into a crummy $70K car.
      Subaru Stella is not yet in production, and it'll be a long time before we get to buy them.

      So long as we're talking about cool future technologies, I'd include the Volt and Aptera. I hope all these companies make it, but high-volume production is key. Tesla has the lead in this area, and they're further along at developing the technology than any other company.

      --
      Celebrate failure, and then learn from it - Nolan Bushnell
    5. Re:Green Car on a Budget - Innovation Not Required by Rei · · Score: 2, Informative

      BYD F3DM is a hybrid,

      No, it's an E-REV. Extended-Range Electric Vehicle. It has 40-60 miles of all-electric range. It just happens to *also* have an onboard generator.

      The Mitsubishi MiEV is still in research phase, and I wouldn't hold your breath waiting for a US version

      Wrong and wrong. It's both under production and for sale now in Japan, and they've announced US plans for "before 2012".

      The Subaru Stella EV is still only a concept car, though it may be sold soon in Japan. Again, good luck getting one here.

      Wrong and wrong. Same as MiEV. Don't you keep up on this stuff before you post?

      C Propulsion E-Box? Seriously? It's a $55K conversion kit, not a car, and it converts a crummy $15K car into a crummy $70K car.

      That doesn't make your statement any less false.

      --
      I tore these out of your symbol, and they turned into paper.
    6. Re:Green Car on a Budget - Innovation Not Required by harmonise · · Score: 2, Informative

      Tesla is the only company in the world selling production electric cars that are fully street-legal.

      No they aren't.

      --
      Cory Doctorow talking about cloud computing makes as much sense as George W Bush talking about electrical engineering.
  4. loans for everyone! by SEAL · · Score: 2, Interesting

    Anyone left wondering why our tax dollars are funding a loan for Nissan while U.S. auto companies are struggling?

    1. Re:loans for everyone! by sweatyboatman · · Score: 5, Insightful

      just a guess, but it could be because of the 3 manufacturing plants and 1100 dealerships Nissan has in the US.

      --
      It breaks my pluginses, my precious!
    2. Re:loans for everyone! by mzs · · Score: 4, Insightful

      Because the money is going to a Nissan plant in TN that is being retrofitted to develop, manufacture, and test cutting edge batteries. Would you rather that the DOE does not provided to money on some idiotic jingoistic grounds only so that a future industry in and that portion of the economy is cornered in Japan?

    3. Re:loans for everyone! by Bigjeff5 · · Score: 3, Insightful

      Loans to people/companies who can actually pay them back yield a lot of money. Average return on a 15 year mortgage, for example, is about double. It's also frontloaded, so they make most of the profit by year 10 and all that is left is the principal that needs to be paid back.

      Corporate loans work similarly, so if Company X pays back a 1 billion dollar loan in 10 years, the loaner has made a profit of probably around 50-75%.

      That's a whole lot different than a grant, in which case the money is free so long as it is used for the specific purpose it was granted for.

      Loans are a good thing as long as there is a good reassurance that the loan will be paid back. I don't mind a loan to Nissan, since they have a number of US factories and have a very solid business. That means more jobs and money for the US.

      Loans should NOT be given to US companies that look like they might fail. That's what got the mortgage industry into trouble and helped cause this crisis in the first place. Propping up a failing business is bad practice, but helping a viable business become more viable and more profitable is good practice, especially when you can get a good return on your investment. All we should care about when granting these loans are two things: Will it create more lasting jobs in the US, and will we get are money back and then some. If we start fudging the second one just because it is a US based company, then we'll be headed for more heartache.

      --
      Security is mostly a superstition... Avoiding danger is no safer in the long run than outright exposure. - Helen Keller
    4. Re:loans for everyone! by Slugster · · Score: 2, Insightful

      I heard on the radio (AM broadcast) that the main reason was to avert anti-trade sanctions that would have been likely, had only US companies been given these handouts.

      (and yes, it is a handout. It's called "gambling with someone else's money". If you go broke anyway, you don't pay it back, because you can't-)

      As to why ANY of them are getting any government money,,,,, that would have to do with a certain musty piece of paper, and of a number of politicians who have no use for it.
      ~

  5. Re:Model S by oneirophrenos · · Score: 5, Insightful

    Obama socialist?

    People who claim that Obama or the American Democratic party for that matter is socialist needs to take a trip around the globe. In many European countries the Democrats would be considered a right wing party.

  6. Re:More bullshit by jmorris42 · · Score: 5, Insightful

    > I know. Just like those silly Interstate highways

    Roads are specifically mentioned in the US Constitution. Pass

    > the US Marine Corps

    A Navy is specifically mentioned. The Marines are a sub unit of the Navy. Pass

    > the US Postal Service that'll deliver

    Postal service is permitted. Pass. But note that most packages use private carriers these days, the postal service is mostly for bills and junk mail.

    > and those terribly inefficient and socialized Firefighters and that neo-communist socialized Police Department

    Those services are not provided by the US government. Federal money for those purposes are unconstitutional. Good luck getting enough literate Supremes to be able to figure that out any time soon.

    US Taxpayer money to a private automaker? Fail. Unless you can point me to the clause I missed that specifically grants the US government that power the 10th Amendment forbids it. Again, good luck finding five Supremes who can read.

    --
    Democrat delenda est
  7. Re:More bullshit by jollyreaper · · Score: 2, Insightful

    More bullshit courtesy of the U.S. Gubmint!

    I know. Just like those silly Interstate highways, the US Marine Corps, the US Postal Service that'll deliver a package of paper to any door in the US within a day or two for an affordable flat fee, and those terribly inefficient and socialized Firefighters and that neo-communist socialized Police Department. Government. Pah! Who needs it?

    The Republicans are involved at the highest levels of government. If anybody would be in a position to fix it instead of complaining about it then it would be them, or at least them when they had control of all three branches not too long ago. So why didn't they do anything about it? And if it's a system that cannot be fixed and they do not believe in it, why are they still a part of it?

    If us IT geeks went about our jobs like Republicans, we'd be saying stuff like "Bah, stupid computers! Management wants to do another IT project. Just another pointless boondoggle that will get screwed up, mark my words! We'd all be better off going back to paper! Who wants some pencil-necked geek standing between you and your work telling you what you can or can't do with some stupid blinking box?"

    --
    Kwisatz Haderach
    Sell the spice to CHOAM
    This Mahdi took Shaddam's Throne
  8. Re:Model S by Bemopolis · · Score: 5, Funny

    People who claim that Obama or the American Democratic party for that matter is socialist needs to take a trip around the globe.

    The kind of people who claim that Obama is socialist aren't the kind of people that travel around the globe. Well OK, Gov. Sanford does, but the REST of them...

    --
    "I guess the moral of the story is, don't paint your airship with rocket fuel." -- Addison Bain
  9. Tesla Fanboi by 2obvious4u · · Score: 2, Informative

    I've been watching Tesla since day one. The make cars the way they should be made. You place an order for your car, then the car is built. It was privately financed until this infusion of funds. For what the model S is and does the price isn't to high. I looked at buying a Mitsubishi Lancer Evo and it clocked in at $42,000, while I was shopping I noticed that entry level BMW's and Audi's were also at the $40,000 mark. So I saved $22,000 and bought a 2009 Corolla. My next car will be a Tesla as soon as they start selling them on the east coast. The Model S is as nice a car as an Audi or BMW, without the need to change the oil or pay at the pump. It makes the Chevy volt look like a joke and puts all the hybrids to shame, it is the ultimate commuter car.

  10. Re:More bullshit by geekoid · · Score: 2, Funny

    Please keep your conspiracy crap off the Internet.

    --
    The Kruger Dunning explains most post on /. http://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect
  11. Re:Overpriced. by kagaku · · Score: 4, Insightful

    Cars are cheap because nearly everybody in this country needs a car. You need a car to get to work, you need it to get to school and you need it for recreation. Sure, if you happen to live in a major city there is also mass transit, but for a large percentage of the population a car is a necessary reality.

    Now, with that being said - what happens when something is produced in such great numbers? Economies of scale - the price is driven down due to mass production. Vehicles that cost $13,000 USD are a reality and they're not half bad either. A pretty decent car can be purchased for $20,000, and a really good car for $30,000. Luxury vehicles are nearly anything $40,000 and above.

    What about electric cars? They aren't mass produced in any great number just yet, because so far everyone is content with dropping $13,000 on a car that's just "good enough" for their needs. Why do I need an electric vehicle? What benefit does it give me _right now_? Fuel costs decrease significantly, yes - but enough to offset the price of the car? Probably not, even over the lifetime of the vehicle. Therein lies the problem.

    Electric vehicles - especially from a non-big 3 startup - are something I believe the government should assist. Your tax dollars are helping fund the future, because while you may not be able to afford this vehicle at $50,000, you might be able to afford the next car they produce using the profits of the Model S.

    When the world is filled with "good enough" and people who like "good enough" - how do you convince people to switch to something better?

    --
    everyday is another shooter.
  12. Re:Wasted taxpayer dollars by Rei · · Score: 4, Informative

    Wrong in so many ways.

    1) It's not a grant. It's a loan.
    2) The Model S is right in the price range of high-end luxury sedans (which is what they're making).
    3) Tesla got the overwhelming majority of their Roadsters when there was no EV tax credit. Sure, it'll increase their Model S sales volume, but they'd still sell a ton without it.
    4) The whole world is lacking in venture capital right now. It's called a financial crisis. About the only entity that investors trust to loan money to these days are major world governments. Hence, that makes them effectively the only entity able to give loans worth half a billion dollars to all but the most established large businesses.
    5) If you have such a problem with half a billion dollar loan, I'd hate to see how you'd react to the $5.9 billion loan Ford just got from the same program.

    --
    I tore these out of your symbol, and they turned into paper.
  13. Re:Wasted taxpayer dollars by fiannaFailMan · · Score: 3, Insightful

    In other words the taxpayers just had half a billion stolen from them and given to some idiot Californicators to waste on building overpriced cars that will only sell if they are subsidized with yet more taxpayer dollars.

    Seriously, if these cars were such a great moneymaking venture I don't think California is lacking in venture capitalists even in a recession. You only go to the government with hat in hand if you know it is a losing idea but can be made politically appealing anyway. These days you just have to say "green!" to crack open the piggy bank.

    Who built the Interstates?

    --
    Drill baby drill - on Mars
  14. It's a Loan. by 0100010001010011 · · Score: 4, Informative

    It's not a handout. It's a loan. You know like the loans you can get for small businesses from the feds and state governments.

    1. Re:It's a Loan. by jmorris42 · · Score: 2, Insightful

      > It's not a handout. It's a loan.

      It must be great to be young and naive. You probably think the TARP money will be paid back too. It will only be paid back if Tesla makes a crapload of profits instead of losing their ass on the deal. But if it was a sure fire moneymaker they could have raised the money on the private markets. Even in a recession and credit crisis there is venture capital looking for places to park. SO we must assume it is a high risk investment being financed with a very sweetheart low interest government loan. Essentially a gift to Tesla of the spread between the low rate the government loaned at vs the higher rate the open market would have charged for the risk.

      Must be great to own a Congressman or Senator. Does it make me a bitter old cynic to just assume the facility in the "SF Bay area" will be in Speaker Pelosi's district?

      --
      Democrat delenda est
    2. Re:It's a Loan. by jmorris42 · · Score: 3, Insightful

      > the TARP thing was needed.

      Was it? Everybody said that..... but 'everybody' seemed to be the ones either handing out the money or the politically connected people who were lining up to take the money. And then they didn't even spend most of the money to solve the 'toxic asset' problem that we were assured was going to bring on a depression. No, they nationalized banks, insurance companies and automakers with most of it and show every sign of keeping any money that does get paid back as a giant off the books slush fund.

      Not the only one who is starting to smell a giant rat. Seeing the same 'masters of the universe' types moving seamlessly between Wall Street, the Bush administration and now the Obama camp spending Sagans of cash that was called into existence from nothing to bail out old money companies who did stupid things because they were afraid of being called names by Democrats.

      --
      Democrat delenda est
    3. Re:It's a Loan. by natedubbya · · Score: 2, Insightful

      You only think the TARP thing was "needed" because somebody told you it was.

      How do you know there weren't any banks making loans? To homebuyers? Or to businesses? When the news told you they weren't making loans, did you find out which they were talking about? Were businesses looking for loans in the first place? OR were businesses interested in shoring up their own books before getting more loans? This is all past tense, "were", how do you know businesses want loans now? Home prices haven't gone up, so shouldn't they be in the same situation?

      If I sound patronizing, it's because I am. I find that the vast majority of people who state opinions on TARP, like yourself, have no answers to any of those questions. You just think it was good because whoever you voted for told you so.

      The parent you replied to actually had rationalizations for how loans and risk work in a marketplace. You should start learning there.

    4. Re:It's a Loan. by locallyunscene · · Score: 5, Insightful

      I don't particularly care whose district it's in; I'm just glad the gov't. is loaning money to a company that A.) has a good chance of paying it back and B.) develops a technology that decreases our dependence on oil.

    5. Re:It's a Loan. by geekoid · · Score: 4, Interesting

      It must be great to be old, stupid and wrong.

      Many banks and financial organizations are ALREADY preparing to pay it back, starting next month.
      In fact, there some people are saying they should be allowed to until the enact the changes they promised when taking the money.
      That's not going to happen. Almost all of that money will be paid back within a year. Why? because the financial institution don't like the strings that came with it. That's right, the government add string that would pretty much guarantee a payback.
      Maybe you should read up on things instead of letting libertarians spoon feed you? You might be able to actually look at facts can come to your own independent conclusion.

      "But if it was a sure fire moneymaker they could have raised the money on the private markets"

      You've never looked for VC funding, have you?
      Frankly I would rather get a loan I can pay of then give up 60+% of my company to a VC that want's to make 10 times the money they invested immediatly.
      Wouldn't be the first company a VC forced a sell of so they could make a quick return, and destroying the company at the same time.

      No, that is not a reasonable assumption, and if you knew anything about financing companies at this stage, you would understand why.

      --
      The Kruger Dunning explains most post on /. http://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect
    6. Re:It's a Loan. by BikeHelmet · · Score: 2, Interesting

      Tesla? What about Ford?

      Both companies are probably going to produce the same number of electric cars, so what entitles them to an extra ~5.5 billion?

  15. Electric vehicles aren't great by lordvalrole · · Score: 2, Interesting

    http://webcast.berkeley.edu/course_details_new.php?seriesid=2009-B-51905%7C2009-B-69390&semesterid=2009-B/

    Lecture 1 - 46 mins in Richard Muller talks about the cost vs pay of an electric vehicle.

    1. Re:Electric vehicles aren't great by MojoRilla · · Score: 3, Informative

      This is pretty stupid. He assumes that the Tesla batteries will last as long as laptop batteries do. Three years. Read up on all that Tesla does to lengthen their battery lifetimes. Tesla says you will still have 70% capacity after 5 years and 50,000 miles.

  16. Fleet Car by W.Mandamus · · Score: 5, Insightful

    At $50,000 the Model S is more likely to be used as a fleet car then something you use at home. For those who say this is a waste of money I'd like to point three things out: 1. GM spend 1.2 BILLION to build a PROTOTYPE electric car, which they didn't put into productions. This is money to build a factory that will actually um make cars. 2. Tesla is going to use this money to build electric vehicle components in the US for other companies. Having that kind of production is the US is BIG DEAL for our balance ot trade. 3. Tesla is more likely to pay

    1. Re:Fleet Car by CodeBuster · · Score: 2, Insightful

      Even so, it raises the question: If electric vehicles are such a worthwhile and wonderful investment where are the private investors? Why couldn't Tesla have raised their $465 million loan(s) from the billionaire club or the private equity investment markets? Like stem cells in here in California, it is always the public that is asked to "take one for the team" and finance a high-risk investment in exchange for little or no reward a long way down the road. I am very suspicious of people who claim that a particular technology (anyone remember the corn ethanol boondoggle?) is such a great investment that the public simply must finance it while the investors of the world, even those who tolerate higher risks and emerging companies, won't touch it with a ten (10) foot pole.

  17. Re:Wasted taxpayer dollars by jmorris42 · · Score: 3, Insightful

    > If you have such a problem with half a billion dollar loan, I'd hate to see how
    > you'd react to the $5.9 billion loan Ford just got from the same program.

    I'm pissed off about that too. I'm pissed off at the money we are pissing away on the auto bailouts in general. We spent all that money.... and they went bankrupt anyway. But since they cheated and didn't let them do a proper bankruptcy it's going to be f&%king Groundhog Day in Detroit for the next 3 1/2 years as they keep going bankrupt over and over again and the US taxpayer keeps stuffing money down the UAW rathole and relaunching the zombie automakers.

    --
    Democrat delenda est
  18. Battery replacement cost? by grumpygrodyguy · · Score: 2, Interesting

    That thing looks hot.

    My only concern is battery replacement. Replacing a UPS battery is roughly half the cost of the UPS. If cars like these get the same battery economy that would mean $25k every 5-7 years according to their FAQ. (I'm just guessing here based on battery life; they made no mention of battery replacement costs)

    Their FAQ claims the car is a great lasting investment due to lack of complexity and moving parts, but having to drop $25k every 6 years for a new battery would be a deal breaker.

    I do wish them luck though, it's way past time we stopped supporting extremists in the middle east. Not to mention that fact that a complete 300 mile recharge would cost about $4.

    --
    The government has a defect: it's potentially democratic. Corporations have no defect: they're pure tyrannies. -Chomsky
  19. Re:Wasted taxpayer dollars by jbezorg · · Score: 4, Insightful

    You remind me of my Dad in 1975 when new cars were required to have catalytic converters and could no longer use leaded gas.

    --
    I've lost all my marbles except one & It's fun to test angular & centripetal acceleration in my skull
  20. Re:Nissan? by __aarzwb9394 · · Score: 4, Insightful
    SiO2 (124860)

    Why is the United States government giving money to Nissan? Shouldn't the Japanese government do that and not the U. S. taxpayer?

    They are getting money because they are trying to produce a car that might help the US reduce its dependence on dangerous, foreign, terror-funding oil.
    They are getting money because they might employ you, and many other US citizens.
    They are in a better position to employ you and others than 2 of the 3 major American car manufacturers because they are not shite.
    Surely you don't think they are taking the money back to Tokyo to spend on kimonos?

  21. Re:Wasted taxpayer dollars by Vectronic · · Score: 3, Insightful

    People, with machines.

  22. Model Tee Hee Hee by Tablizer · · Score: 2, Funny

    If they are on "S" now, then the next model in line is "T". The potential confusion cannot be good for marketing. Reminds me of the door company that made a "Commodoor-64".
           

    --
    Table-ized A.I.
  23. Re:Overpriced. by Bemopolis · · Score: 3, Insightful

    When the world is filled with "good enough" and people who like "good enough" - how do you convince people to switch to something better?

    Ask Apple — that is, once they recover from the devastating choices of entering the saturated mp3 player and smartphone markets.

    --
    "I guess the moral of the story is, don't paint your airship with rocket fuel." -- Addison Bain
  24. Re:ABOUT freakin' time by WinPimp2K · · Score: 2, Informative

    Electric cars will be nice, but putting the plant in California is massively wrong and stinks of rotten pork.

    If Tesla is going to succeed in the long run, they need to be in a pro-busioness climate, and not in a state that needs money so badly the punitive tax burden combined with out of control state regulators will force them to either go belly up, or move their facilities to another state later (at great expense and possibly triggering additional fallout from the Feds for not staying in CA).

    --

    You either believe in rational thought or you don't
  25. Re:More bullshit by k_187 · · Score: 2, Informative

    Set them as a foe, then set foes to -6. I think you can still do this.

    --
    11 was a racehorse
    12 was 12
    1111 Race
    12112
  26. Geography by afabbro · · Score: 3, Insightful

    $100M for a powertrain manufacturing plant in the SF Bay Area

    How on earth can that be the cheapest place to manufacture something?

    I suspect the factory location is more political than practical ("I've love to help you get that loan, but you know, it'd sure be nice if you located that factory in my state").

    --
    Advice: on VPS providers
    1. Re:Geography by Bemopolis · · Score: 2, Interesting

      I suspect the factory location is more political than practical.

      Actually my initial thought was the opposite. Who is the most likely to buy (read, afford) these cars? Silicon Valley nerds and Hollywood liberals. (And I don't mean to disparage either of those groups; if I were in either of their socioeconomic strata I would be standing in line with them.) Factor in the stricter emission standards of California as extra incentive, and one has to wonder why it would make sense to build them 2000 miles away when all of the output will be going to the West Coast anyway.

      --
      "I guess the moral of the story is, don't paint your airship with rocket fuel." -- Addison Bain
    2. Re:Geography by hguorbray · · Score: 5, Informative

      Although I don't doubt that there are political reasons for having some Tesla mfg in the US (not to mention tariffs, etc) there are also some practical ones:

      1) You can't just take some laid off Mexican auto assemblers from an old GM plant, put them in a new building and tell them to start making Electric car drivetrains -there are probably entirely new process steps (not to mention components) which would make this a non-starter
      2) they probably need to tweak that process as well as being able to introduce changes in parts as the design is tested and improved

      therefore it makes sense for the factory to be close to where design/engineering takes place -not to mention that there is also a highly trained, technologically able workforce in the Bay Area.

      Also, thanks to Hitech, Lockheed, Lawrence Livermore Labs, etc there are a great many machine tooling shops in the area which are second to none.

      Think of this as a pilot mfg plant -they will no doubt try to go somewhere cheaper when it comes time to produce quantities in the 100ks

      On the other hand, we have the only large scale auto manufacturing plant left on the West Coast just down the street from me: http://www.nummi.com/ , so stranger things have happened.

      -I'm just sayin'

    3. Re:Geography by drinkypoo · · Score: 2, Insightful

      You can't just take some laid off Mexican auto assemblers from an old GM plant, put them in a new building and tell them to start making Electric car drivetrains -there are probably entirely new process steps (not to mention components) which would make this a non-starter

      Let's also be fair here and mention that cars made in Mexico have repeatedly been shown to have quality problems; this has happened again and again with Fords, GMs, and especially VWs; the Golfs made in Mexico are complete shit piles, so they went back to making them in Germany, and now they're some of the most reliable cars there are.

      I don't know WHY the cars that come out of Mexico are shit, but they are.

      --
      "You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
  27. Re:Government is exactly backwards by GodfatherofSoul · · Score: 2, Insightful

    I don't think you understand what "investment" means.

    --
    I swear to God...I swear to God! That is NOT how you treat your human!
  28. Re:More bullshit by Facegarden · · Score: 2, Interesting

    How is funding a boutique luxury car manufacturer at the rate of half a billion similar to funding interstates, military, postal service, etc.? Tesla does not even hope to provide shared infrastructure or essential services to the country as do these programs. I don't get it.

    I am so sick of this argument! They are NOT just a boutique luxury car manufacturer, they started that way to get enough money for their company but they are now working on selling the first truly viable all electric family sedan, that is within the range of most other nice sedans like Audis, etc, which many familys have.

    They are the first company with the balls to say FU to the oil companies and actually do some real innovative work, and they deserve every fucking penny of what they got.

    While every other automaker in the world has treated electric cars like a curiosity, Tesla came right out and saw them as the future. If anyone *doesn't* deserve the money, it's the major automakers that ignored anything efficient until oil blew up and being green became fashionable.
    -Taylor

    --
    Worldwide Military budgets: $2100 billion. Worldwide Space Exploration budgets: $38 billion. Really, world? Really?
  29. Re:More bullshit by jmorris42 · · Score: 3, Insightful

    One question. If the 'general welfare' clause were intended to be as open ended as you guys believe it to be, why did they feel a need to carefully enumerate the powers and limitations in the lines directly under that header?

    So we have two competing theories:

    1. The 'general welfare' clause, along with the other all purpose commerce clause, grant unlimited powers to the Federal government making the 9th and 10th Amendments (passed as Amendments btw which can override the original document) null and void.

    2. The words 'general welfare' appear in the section heading describing the general flavor of the more specific defined powers granted in the section which taken together define the limits of Congress's powers to 'provide for the common defense and general welfare of the United States.'

    But since you posted as an AC it is doubtful you will man up and even try to answer.

    --
    Democrat delenda est
  30. Re:God forbid our tax dollars be used to build by CorporateSuit · · Score: 2, Interesting

    Utah -- the state is very anti-union which makes for cheaper labor when it comes to manufacturing, some cheap landgrab deals will get you the spot you need along Interstate 80 or Interstate 15, and it'll only cost about $200 per car to haul them to Los Angeles or San Francisco if you're shipping a fleet. It wouldn't be a huge benefit to the populace as compared to Michigan, which could really use the jobs, (as Utah has one of the lower unemployment rates in the country right now), but it'd be cheap.

    --
    I am the richest astronaut ever to win the superbowl.
  31. Re:More bullshit by joocemann · · Score: 3, Interesting

    Henry Ford had no idea that using fossil fuels could lead to dire consequences of worldwide magnitude.

    In all honesty, we should have made these serious changes over a decade ago.

  32. Re:More bullshit by StopKoolaidPoliticsT · · Score: 2, Informative
    And what does "promote the general welfare" mean? Well, if we look to the Federalist Papers, we'll see:

    Federalist 23 (Hamilton):

    Defective as the present Confederation has been proved to be, this principle appears to have been fully recognized by the framers of it; though they have not made proper or adequate provision for its exercise. Congress have an unlimited discretion to make requisitions of men and money; to govern the army and navy; to direct their operations. As their requisitions are made constitutionally binding upon the States, who are in fact under the most solemn obligations to furnish the supplies required of them, the intention evidently was that the United States should command whatever resources were by them judged requisite to the ``common defense and general welfare.'' It was presumed that a sense of their true interests, and a regard to the dictates of good faith, would be found sufficient pledges for the punctual performance of the duty of the members to the federal head.

    Federalist 41 (Madison):

    A system of government, meant for duration, ought to contemplate these revolutions, and be able to accommodate itself to them. Some, who have not denied the necessity of the power of taxation, have grounded a very fierce attack against the Constitution, on the language in which it is defined. It has been urged and echoed, that the power ``to lay and collect taxes, duties, imposts, and excises, to pay the debts, and provide for the common defense and general welfare of the United States,'' amounts to an unlimited commission to exercise every power which may be alleged to be necessary for the common defense or general welfare. No stronger proof could be given of the distress under which these writers labor for objections, than their stooping to such a misconstruction. Had no other enumeration or definition of the powers of the Congress been found in the Constitution, than the general expressions just cited, the authors of the objection might have had some color for it; though it would have been difficult to find a reason for so awkward a form of describing an authority to legislate in all possible cases. A power to destroy the freedom of the press, the trial by jury, or even to regulate the course of descents, or the forms of conveyances, must be very singularly expressed by the terms ``to raise money for the general welfare. ''But what color can the objection have, when a specification of the objects alluded to by these general terms immediately follows, and is not even separated by a longer pause than a semicolon? If the different parts of the same instrument ought to be so expounded, as to give meaning to every part which will bear it, shall one part of the same sentence be excluded altogether from a share in the meaning; and shall the more doubtful and indefinite terms be retained in their full extent, and the clear and precise expressions be denied any signification whatsoever? For what purpose could the enumeration of particular powers be inserted, if these and all others were meant to be included in the preceding general power? Nothing is more natural nor common than first to use a general phrase, and then to explain and qualify it by a recital of particulars. But the idea of an enumeration of particulars which neither explain nor qualify the general meaning, and can have no other effect than to confound and mislead, is an absurdity, which, as we are reduced to the dilemma of charging either on the authors of the objection or on the authors of the Constitution, we must take the liberty of supposing, had not its origin with the latter. The objection here is the more extraordinary, as it appears that the language used by the convention is a copy from the articles of Confederation. The objects of the Union among the States, as described in article third, are ``their common defense, security of their liberties, and mutual and general welfare. '' The terms of article eighth are still more identical: ``All charges of war and all other expenses that shall be i

    --
    Stop Koolaid Politics
  33. Re:Wasted taxpayer dollars by jmorris42 · · Score: 2, Insightful

    > Oh, and management willingly signed every contract that holds provisions in it your find repugnant.

    Interesting definition of 'willing' you have there. Places like Detroit aren't in 'right to work' states so once a shop goes union you basically have two choices, sign the contract or close the plant. And you are sitting at the table with a Federal negotiator with unappealable powers to impose 'binding arbitration' so closing the plant is only an option if HE says it is and HE is a political appointee who answers to elected officials much more beholden to the union that management's campaign contributions.

    > But yet, it's all the workers fault, and the management that signed these contracts and directly
    > managed the company into the ground is blameless.

    Blameless? Did I say that? Not only did they give in to suicidal demands they made so many other blunders space doesn't permit a full venting.

    But the overriding problem currently facing the US auto makers is the UAW and a real bankruptcy is the only viable way to opening up those contracts. All of the money we are pouring into those companies until that happens is wasted and that is exactly what this is all about, preventing the UAW from taking a reality check. To prevent that centuries of contract law are being shredded, billions of taxpayer dollars wasted, etc. All because the UAW is what is 'too big to fail' but even Obama doesn't have the political capital to actually SAY that. The actual automakers are already valueless so allowing them to fold wouldn't cause much of an economic dislocation beyond what has already happened when the stock and bond holders were left with nothing. The corpse of GM is essentially being used to launder money to the UAW.

    The whole house of cards should be allowed to collapse. Management and the investing world would learn the important lesson that taking the easy way out and giving in to insane demands eventually has a price. The unions would learn that excessive greed kills the golden goose. The total collapse of the Michigan political establishment would be a good thing for the state. And everyone would learn that NOBODY is 'too big to fail.'

    --
    Democrat delenda est
  34. Re:Nissan? by SiO2 · · Score: 3, Insightful

    I've been to Europe, so, yes, I have seen and used the public transportation system. (Props to the Netherlands and Germany!) The U.S. just needs to take a look at its infrastructure and wonder whether all of that stimulus might be spent on other endeavors that have a greater impact on the greatest amount of people. We should not be so concerned with keeping the car companies alive for the short term. Let us thing in the long term.

    SiO2

  35. Why no diesel-electric cars? by Pfhorrest · · Score: 3, Interesting

    I know this is a tangential question, but I've been wondering about this for a while, and this seems like the best forum to get a decent answer from intelligent people:

    Why is all the development on electric and electric-hybrid cars going into fancy new systems with lithium ion batteries or hydrogen fuel cells and (for hybrids) complicated switching between a conventional drive train and electric motors, instead of using and improving upon the time-tested diesel-electric technology which has efficiently powered many trains for quite some time now?

    Build a simple all-electric car - just a body, steering rack, four wheels with a dynamo on each (there's your propulsion and your regenerative brakes), some circuity to control them all, and a small battery that holds just enough charge to get you up to speed, maybe twice that for a safety margin. Then stick the most efficient diesel or gas generator you've got in it to provide electricity to keep the battery charged. You lose a bunch of weight and mechanical complexity by ditching most of the drive train and transmission system for some simple wiring between the generator and the dynamos; the alternator and the standard car battery become redundant with the generator and main battery; heck you could even replace the radiator with a small steam engine for still increased efficiency, turning that excess heat into electricity instead of just disposing of it to the air.

    Yes, it still uses some fossil fuels, but in the end most of our electricity comes from coal anyway (even for a wall-charged all-electric vehicle like the Model S here, which I am very excited about). This just seems like it would have been far cheaper, more efficient (in terms of both money and thermodynamics), and simpler a solution than the complicated hybrids they've been building for a while now; plus the technology has already existed in widespread use on trains for decades!

    So why isn't anybody doing it in cars? Is there a good technical or economic reason?

    --
    -Forrest Cameranesi, Geek of all Trades
    "I am Sam. Sam I am. I do not like trolls, flames, or spam."
  36. The US government is retarded. by falconwolf · · Score: 2, Interesting

    Government was already fund Detroit. While I don't like government subsidies whereas 2 of the Detroit big 3 are bankrupt, Tesla looks to be profitable.

    The ideal and proper method for government grants

    These are loans not grants and have to be repaid.

    Falcon

    --
    Should there be a Law?
  37. the TARP thing was needed by falconwolf · · Score: 2, Interesting

    TARP may of been needed but if so then strings should have been placed on the funds, such as requiring banks to lend money instead of using it to buy competitors and hoarding the money. Money was given to banks because they were too big to fail, well now they're massive and when they crash again the government won't be able to bail them out.

    The bailout also gave bad banks advantages over banks that were properly run and didn't make bad loans. Good banks and borrowers were made to pay for those who made bad loans and those who took out bad loans. In other words the government was choosing winners and losers instead of letting the markets do it.

    Falcon

    --
    Should there be a Law?
  38. Bullshit by GuyFawkes · · Score: 2, Interesting

    Smith Electric Vehicles in the UK has been making electric vehicles for 70 something years straight, the current range runs from "sub compact car/van" size right up to articulated good vehicles. One of the better sellers is based on the Ford Transit, a 3500 Kg GVW van, which has a running cost of only 2p per mile and a purchase cost far far far far cheaper than a tesla, and it will earn you a living.

    --
    http://slashdot.org/~GuyFawkes/journal
  39. Re:Model S by Apple+Acolyte · · Score: 2, Insightful

    Socialism is about working class owning the means of production (for example workers of a car factory all own equal amount of shares of the car manufacturer).

    You mean like the federal government handing out majority ownership rights over the new GM to the unions that help destroyed it (Obama's loyal supporter base) and shafting the secured bond holders who were legally first in line to be compensated? Sounds a whole lot like your definition.

    --
    Part of the hardcore faithful who believed in Apple long before it was cool again to do so
  40. Re:More bullshit by Anivair · · Score: 2, Insightful

    Ahh yes. We'll just stop spending money. That's exactly how the economy works. good on you for figuring it out. Why did we bother paying all those financial experts when we could have just asked you to spit out the solution between Dr. Peppers? Silly government, thinking that the world economy is fueled by spending!