Comments on: Ta ta, Tesla

Are the Valley-based VCs and big-wigs who back Tesla Motors really serious about asking the federal government for low-interest loans?

[mmichaels]

Please do not use MY tax dollars for your loan. Let those who are supporting a government loan pay out of their own pockets. It shouldn't be too hard to find 400 Hollywood millionaires who so love the environment, they'd be willing to invest 1 mil each right? Think of the children!

[Grumpypaul]

While I would very much like to proven wrong, Tesla and all the other electric car "manufacturers" are being constrained by battery technology, as was mentioned already. That, and the pure and simple rule that you just can't start building a car from scratch unless you embrace currently available technologies. A handbuilt Techno-mobile utilizing an existing Toyota drivetrain that already has been proven is possible. In a way Lotus does it now. Convert a Prius to all electric? It's being done. In both cases the existing vehicle or the existing drivetrain are being recycled in one form or another. In the case of Tesla and the others the story is a tad different. Even the GM Volt will most likely be sold with a number of yet to ironed out glitches but above all it has General Motors behind it, for good or bad. They have the wherewithal to try and ride out the storm. (Hopefully!!) The upstarts just haven't figured that out yet. The 80 or so Teslas on the road are owned by the mega-millionaires who helped fund the company and/or their counterparts who have to have it because it's so, well so.

[crue24]

Absolutely they should NOT recieve bailout money. The purpose of the bailout has nothing to do with innovation or saving the auto companies per se. It's about the economy and jobs. If one of the majors goes down, 10's of thousands of jobs disappear and additionally all of the companies that supply the parts, etc. to those companies face potentially going under because they are extrememly dependent on a very small number of customers. Tesla is a small company and if it went under, there would be virtually no impact on the overall economy. Maybe a few hundred people lose jobs, which isn't exactly the kind of thing a government bailout is for. I'm not saying the government shouldn't support and provide incentives for innovative car companies, but that's not where "bailout" dollars should go. It sets a bad precedent going forward.

[roadsterrachel]

This blog post is absurd. I realize the need to be provocative, but come on: Not only is the writer ill informed -- but he never so much as called or e-mailed to get data about his subject. For the record, I am the PR person at Tesla he should have called, and my contact information is plastered all over the Internet.

To set the record straight, Tesla is not applying for a "bailout" or "lifeline" or money to fund ongoing operations, as are the Detroit Three automakers. Tesla is the only company applying for the low-interest loans according to the Energy Independence and Security Act, which created a $25 billion fund known as the Advanced Technology Vehicle Manufacturing Incentive Program. The ATVM specified that the Department of Energy should provide loans, loan guarantees and grants to new and existing automakers and suppliers to encourage development and speed delivery of next-generation cars ? vehicles that meet higher standards for fuel efficiency and stretch technology beyond the internal combustion engine.

Although the Detroit Three have refashioned this program into a bailout, it would an enormous mistake to refashion this into a something other than a much needed program to boost fuel efficiency. The original spirit and intent of the program is critical for the nation?s economic security ? and the importance of the program is even greater given the harrowing economic climate.

Since its founding in 2003, Tesla Motors has been directly addressing the pressing crises of energy security and climate change. The company is already producing the Roadster, an innovative precursor to other all-electric, zero-emission models in Tesla?s product pipeline ? de facto evidence that electric vehicle technology is here today. Tesla Motors is applying for the DOE loans in the truest spirit and intent of the program, and the company does not endorse the diversion of the ATVM resources for a bailout of any kind. This blogger should get his facts straight before writing such error-filled rants.

If readers would like more information, look here:

http://www.teslamotors.com/blog2/?p=66

[open-mind]

Rachel, I appreciate the time you spent to set the record straight.

But to be fair (if the news media can be believed ... something that seems less likely each day), it was not the Detroit Three who refashioned the ATVM funds into a bailout loan. Rather, that was the suggestion of some in congress in response to a separate loan request by the Detroit Three to be used as operational capital until the economy and credit markets can recover.

In the context of ATVM funds (and contrary to what I posted above), I would say Tesla deserves at least a $400 million share.

Sadly Jon Oltsik is guilty of perpetuating previously reported lies about Tesla. He should know better.

Tesla is not in trouble or requesting money from the $25B auto industry bailout. Tesla applied for a loan through the Advanced Technology Vehicle Manufacturing Initiative Program which was created by the December 2007 Energy Independence and Security Act. This program provides loans and grants to automakers to encourage development and delivery of next-generation cars -- vehicles that meet higher standards for fuel efficiency and stretch technology beyond the internal combustion engine. The program is aimed to provide ?grants and loans to eligible automobile makers and component suppliers for projects that re-equip, expand, and establish manufacturing facilities in the U.S. to produce light-duty vehicles and components that make meaningful improvements in fuel economy performance.? That is what Tesla is about.

[carbon_14--2008]

Tesla Motors isn't asking for help with the Roadster, that work is done, nor is it asking for "bailout" money.

Tesla is asking for a part of the incentive program for automakers to develop more energy efficient vehicles. The loans Tesla applied for are for their OEM drivetrain business and for their second vehicle, the Model S.

Tesla's goal is to bring the cost down and the production level up on subsequent vehicles to deliver affordable, energy efficient vehicles to the public. This is a perfect match for the federal incentive program.

[solitare_pax]

Could they actually build a car that regular people could afford to buy?

[krb5kdc]

this post seems irresponsible

first the title, "ta ta, tesla" indicated that tesla was going to be acquired by tata

second, even i knew that tesla was simply applying for the its share of the DOE's $25 billion low interest loan program set aside for new technology initiatives before it gets misappropriated to the big 3 auto makers in its entirety

the unwarranted, misdirected and misleading outrage created by this cnet and cbs news post needs to be addressed and corrected

[hoffmkr]

Many of you don't understand Telsa's original business model. They started building a sports car because it had a higher price tag to cover development costs and because they could get the money up front. Telsa have over 1000 cars ordered 1-2 years in advance or more with much of the money already put down. That is how they paid to develop the technology. They have a sedan scheduled for 2010 (or atleast was before the financial issues) that was supposed to drop to the $60K price range with a third generation vehicle even more affordable. People who buy affordable vehicles don't put a ton of money down up front. Also, without automated manufacturing, you have to get high margins per vehicle to pay for development costs. Telsa's business model has been published to develop great technology and then make it affordable to minimize the losses. A loan for a company who's making something technologically positive and is getting stronger financially sounds a lot better than giving the big three money who have been falling down the financial slope for twenty years with less technology gains in the last five years between them than this startup has.

[Thomas, David]

Tesla is trying to push the envelope. Whenever this is done, it's usually the by products that provide the greatest advances. They should get the money.

[afterhours]

I promise you if you give me $400 million right now, I can give you $401 million back in 6 years. I absolutely can.

Can I have the money now?

[afterhours]

Remember during the last election one of the candidates used the words 'wealth redistribution'? That's all this bailout is. Redistribute from smart, hardworking people who were smart enough to buy a decent toyota or honda or hyundai, and we give that money to the makers of very large SUVs, and Hummers, and F-250s and all the male-enlargement vehicles that have been so popular over the last 8 years. I can promise you nearly every exec that is asking for a bailout on Wall Street or Detroit voted against the candidate who used those words. While they get in line for their 9 figure taxpayer gift.

Why aren't the conservatives fully and completely pissed about this? Where are the conservative 'market forces' voices to be heard now? A trillion here, and trillion there -- pretty soon we're talking Weimar Republic.

[ckurowic]

The big 3 suck, give all the money to Tesla.

[benjwah]

"The government doesn't have money of its own - it takes our money in the form of taxes."
- icanspendmyownmoney

It's not your money, it's China's money. Your country doesn't have any money, it's in massive debt to its friends and enemies. I wouldn't cut your taxes until your country pays off what it owes.

Or at least runs a bloody surplus.

[vbuendia]

With all due respect Jon, I think your lack of basic history and erroneous usage of terms made your comments diminish the value of the article. I don't know what your sources are but Tesla is not trying to get bailed out. Tesla has a product that could END our fuel addiction, could END poisonous pollution and could create jobs. If we are going to be offering tax payer money to an industry hat needs it, and we could make a quick polI, I could bet any money that THIS would be the kind of industry that would win our vote and not the big three or the banks... I think you should review your sources, semantics and get some history lessons. It would be great for you and CNET and the environment.

[Heebee Jeebies]

I would have no problem with my tax money going to help Tesla. Better them than the stupidly run Ford, GM and Chrysler. However, my issue with Tesla is that they only seem to care about the high end sports car market. They need to junk that crap and start marking cars for normal people especially if they expect a tax payer handout. I have not intentions of paying for a Tesla car in tax payer handouts and then it being sold to some rich jerk. Get a clue Tesla, design and sell for the masses and then worry about the rich people that have too much money, too much greed and not enough brains to realize that 100,000 for a car is just stupid!

Robert

[v_noronha]

In the first place electric cars have higher emissions than gasoline cars, when you take the exhaust gases of power plants into consideration. Until there is 'clean' production of electricity, the electric car is an environmental lie. Those who buy and drive them are really doing the earth a disservice. No one, least of all the government should be investing in that ridiculous technology.

Diesel engines running on vegetable oil (what they were originally designed for) is a far more practical and viable idea.

[willdryden]

You may now quit promoting this lie. USDOE et. al. have already proven that there is a 20% reduction in pollution even if all the power came from the dirtiest coal power plants in the country. Only 51% of the power is produced from coal plants and it is much easier to clean up one coal plant than 100,000 mobile sources like cars. As the grid gets cleaner, so do electric cars regardless of age. As gas and diesel cars age, they get dirtier.

[i,Jimbot]

The author seems almost gleeful and giddy that an innovative company like Tesla is having problems. Why is that?

[dnyhan]

This article is poorly researched.

Tesla are asking for a loan, to develop and produce their next car - the Model S.
The Model S is a proposed affordable, high quality electric car which will be available to the masses, not unlike the Model T in its day.

The key word here is loan i.e. its not a bail out, because the money will be repaid. The government will actually make a profit aswell making a significant start on freeing Western nations from the scourge of OPEC and oil politics.

So this is the start of disarming the Middle East & Russia, clean power and reduced global warming, and an increase in disposable income for electric car owners
How anyone thinks this is a bad idea is truely beyond me.

[James Anderson Merritt]

Tesla has a big backlog of orders for the Roadster, at least through the next couple of model years. They can sell 'em as quickly as they make 'em. That's not a problem, and not what the requested loan was for. The resources that were requested from the government were resources that the government was ALREADY reserving to accelerate the development of alternative-fuel vehicles. Tesla, having actually shipped a well-received alternative-fuel product and having fairly well-advanced plans to create more affordable models, only asked for what might be construed as the share of that "pie," which they had already earned through deeds, the purpose being to do exactly with the money what the government was trying to encourage: put a more affordable alternative-fuel car on the road and ramp up to significant production of it for the mass market.

As I understand it, Tesla's business model already provides for the development of more affordable models using profit from sales of Roadsters. That is to say, sales of the current product will fund R&D to produce prototypes of future products. But taking new automobile models to PRODUCTION requires much more capital yet. Clearly, they could woo VCs, or even issue an IPO to get more capital when the time came, but I'm sure Tesla saw in the present-day government program a way to speed up their development activities and lay a solid foundation for the ramp-up to significant production, results that certainly seemed the objects of that particular government fund in the first place.

I would rather they not get involved in government's corporate welfare schemes, but it is hard to blame Tesla for trying to acquire any and all resources available to further their plans as quickly as possible.