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Tesla Motors Getting $10 Million From California For Model X Production
The California Energy Commission has awarded a $10 million grant to Tesla Motors for the company to buy equipment necessary for the production of its Model X electric SUV. Tesla will have to match the funds with $50 million of its own money. From the article:
"It was something of a love fest for Tesla at the energy commission meeting in Sacramento as commissioners and other regulators praised Tesla as an innovator that has brought automotive manufacturing back to California while creating clean cars and more than 1,500 jobs. 'Tesla has the unique distinction of being the only automaker to actually ask us to increase our targets under zero emission rules,' said Ryan McCarthy, the science and technology policy advisor to the chair of the California Air Resources Board. ... 'Tesla’s Gen 3 vehicle could ultimately be a game changer for electric vehicles and air quality and public health in California,' added McCarthy, referring to Tesla’s plans to build an electric car in the $30,000 range. Its latest car, the Model S sedan, sells between $50,000 and $100,000 and the Model X, which is based on the Model S platform, is expected to sell in that price range."
Sometimes the only way to make money is to spend money. Austerity is not necessarily a path to prosperity. I know there's a lot of people who think they can cut cut cut and that'll make things work out for the best, but sometimes you need to expand your offerings, or invest in yourself to reduce costs.
Think of somebody with a house. Say they spend a lot of money on heating because their house isn't well-insulted. Now they could just cut down their heating, but that has the cost of making the person uncomfortable, and less able to work. Wouldn't it be feasible for said person to go into debt in order to improve their house's ability to retain heat?
Think of somebody with a house. Say they spend a lot of money on heating because their house isn't well-insulted. Now they could just cut down their heating, but that has the cost of making the person uncomfortable, and less able to work. Wouldn't it be feasible for said person to go into debt in order to improve their house's ability to retain heat?
We are way beyond "going into debt." We are spending like a drunken frat boy at a bachelor party with a new Amex Gold card. (New card because all the old ones are full.)
The risks are ever diminishing as you get deeper into debt below your net worth. Taking measured risks is ok, but the extra components are knowing what the potential reward is, and understanding any second and third order risks (such as the losing your car and not being able to get any other work).
California is spending money to keep jobs in-state. They will recover half the money they spend through sales tax revenue from the equipment purchase. The remaining $3,400 per employee will hopefully be recovered in income taxes, at least over a 2-3 year period. If there happens to be any economic ripple effect then the payback will be much faster.
Selling a kidney for money to start a business from the ground up on the other hand...
Constantly analogizing the financial position of a government to that of an individual or a household is of limited value. Macroeconomics is not like household economics. On the personal scale, reaching zero debt is a nice goal. For a government, which is immortal, achieving zero debt is unnecessary and actually unwise. Yes, it's best to keep debt down to a low percentage of GDP, but the reality of economic cycles is such that in a down economy, debt will -- and should -- go up, in order to ensure economic continuity, protect society, and lay the foundation for future growth.
That doesn't mean that all debt is good, but in an extraordinary crisis like the one we've just been thru -- the kind of thing that happens maybe twice in a century -- a lot of deficit spending by government will be needed. Sometimes previous administrations have foolishly run up unnecessary debts even before the crisis hits. That still doesn't mean that government austerity is the right answer.
The real question is: How will a high level of deficit spending right now affect you, positively and negatively? The doomsayers have trouble explaining what the precise problem is. They yell "Greece!" But we are not even remotely close to being in the kind of trouble that Greece is in. High debt is bothersome and can be a drag on GDP. But we are not going to get into a Greece-like situation as long as we control our own currency. And we are not going to default, as long as stupid politicians do not intentionally choose to do so.
Another thing: Contrary to the way it's often described, no one is going to present your child or grandchild with a personal bill for hundreds of thousands of dollars in federal debts to be repaid. Our debt is rolling; people are constantly buying newly issued Treasury bills, and the government is continually paying old ones off as they come due. Yet another thing: contra Mitt Romney, most of it is NOT "borrowed from China". Only about 8% of federal debt is held by China. Most of it is held by -- guess who? -- Americans. Yes, mostly the federal debt is money we owe to ourselves.
And right now, Treasury bills are considered by the market to be one of the safest and most favored investment vehicles on the planet. Even with incredibly low rates of return, people are pouring money into US debt. Given inflation, long-term US bonds right now are actually a money-losing proposition -- and yet they are still a wildly popular investment. People are literally paying us for the privilege of buying our debt.
So relax... the sky is not falling. The mistake would be to choke off credit and plunge ourselves into self-inflicted austerity. That's the true danger, and it's playing out right now in Greece, Spain, Portugal, and Ireland.
Goalposts moved!
Alrighty then. This report conducts an analysis that includes manufacturing the vehicle itself. I've givem my opinion of the report and the overall conclusion is EVs are still a winning proposition.
specifically the batteries that use some very nasty chemicals, and toxic elements
More nonsense. All production EVs available now use some form of lithium chemistry. Lithium "mining" is comparatively benign with most of the lithium supply coming from salt flats where the brine is pumped to the surface and allowed to evaporate until the salt you want starts to precipitate out. The electrodes are usually carbon and/or aluminum and the electrolyte - while not something I'd want to be drinking - is typically a volatile organic compound and poses virtually no long-term environmental risk. You must be thinking of nickel batteries. No production EVs I'm aware of use Nickel batteries.
And they have to be replaced
So do engines and transmissions, or at least they need a major overhaul. And like traditional automotive parts, batteries are extremely recyclable.
Least you think you'd need to replace the battery every year or whatever, the standard warranty is equivalent to any other drive train warranty. Even the most pessimistic estimates place the estimated service life of an EV battery at 8+ years (level of abuse notwithstanding). So the issue of cost is moot. Battery packs are also serviceable, in that being highly modular you can replace individual cell sets if that's all that's wrong with it.
Not saying this is still not better
That's pretty much what you were implying, though, wasn't it?
Everyone calls them "zero emission vehicles"
The vehicle itself produces no emissions. "Zero emissions" is actually a legal definition. I seriously doubt any EV owners, much less EV advocates is there are any non-advocate owners, are under any delusion that their vehicle has zero cradle-to-grave environmental impact. Owners of gasoline powered vehicles, however, seem completely unaware - sometimes deliberately so - of the true environmental costs of their chosen mode of transport.
=Smidge=
Dear AC, truth died long before Obama entered Harvard and the GOP should not only allow the White House to raise taxes, but they should insist that it be higher than what the Dems are asking because, as the party of fiscal conservatism, they should do everything in their power to reverse the damage caused by 8 years of Bush tax cuts and unfunded wars, one of which was started for demonstrably wrong-headed reasons.
Then, perhaps, truth can live again.
Pain is merely failure leaving the body