Tesla Model 3 Cancellations: 63k

Guest post by David Middleton

What do Tesla and OPEC have in common?  The more they produce, the more they lose.

63,000 people have canceled their Tesla Model 3 orders

Bryan Logan

Aug. 3, 2017

About 63,000 people have canceled their Tesla Model 3 orders in the past year, Tesla CEO Elon Musk said during the electric-car company’s quarterly earnings call on Wednesday.

[…]

Musk took the cancellations in stride, saying that Tesla could drive up the Model 3’s reservation numbers with little effort but that doing so wouldn’t serve the company or its growing legion of potential customers.

“It’s like if you’re a restaurant and you’re serving hamburgers and there’s like an hour-and-a-half wait for hamburgers — do you really want to encourage more people to order more hamburgers?” Musk said. People who put down a deposit for a Model 3 at this point most likely won’t see their cars until the end of 2018, according to most estimates.

[…]

Business Insider

“It’s like if you’re a restaurant and you’re serving hamburgers and there’s like an hour-and-a-half wait for hamburgers — do you really want to encourage more people to order more hamburgers?”

Well… Yes.  If you want to actually stay in business… You do want to encourage people to order more hamburgers.  A real business will make more money if it sells more hamburgers.

tesla
Tesla revenue and earnings, 2014-2016 (Yahoo! Finance)

Tesla’s 2016 net loss would have been much deeper had they not cashed in on $122 million in Zero Emission Vehicle (ZEV) credits (corporate welfare).

Tesla’s Federal tax credits will begin to phase out after they deliver they 200,000th PEV.  Based on current forecasts, that will occur in Q3 2018.

federal-credit-phaseout-estimation-chart-750x204
“Current Expectations For $7,500 Federal Credit Phase-Out For Major US EV Makers (*aprox). Grey shaded areas are expected cumulative future sales in 000s. Colored blocks indicate stage of the Federal credit a particular OEM is at.” (Inside EVs)

When other automakers sell enough EV’s in California, the ZEV welfare checks will go away.  Within 1 year of Model 3 full production, the Federal tax credit will start to phase out.  Tesla has yet to even come close to generating a annual profit, despite massive corporate welfare.  The question is: Will the government allow Tesla to go broke?  Or will they get a bailout?

Featured image source:

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MarkW
August 4, 2017 7:56 am

Gov. Moonbeam is trying to set up a corporate bailout for Musk in CA.

Tom Halla
Reply to  MarkW
August 4, 2017 8:05 am

Then who is going to bail out California?

dam1953
Reply to  Tom Halla
August 4, 2017 8:58 am

You and all the other US tax payers can grab a mirror for the answer to the that question.

Bryan A
Reply to  Tom Halla
August 4, 2017 10:06 am

The real question is, do those 63,000 cancellations get their $1,000 each refunded??
That would be $63,000,000 removed from Tesla’s account and Musk’s pocket.
If not then there are more than 370,000 idiotic foolish people willing to part with $1,000 for absolutely nothing in return

Rhee
Reply to  Tom Halla
August 4, 2017 10:48 am

@Bryan the word on refunds is that Tesla is slow walking the refund process, taking up to 6 months to get the thousand dollar check to the folks who cancel

Reply to  Tom Halla
August 4, 2017 11:26 am

@Bryan A, No point in throwing good money after bad. If they don’t get the $1000 back, it is still better than giving more (in 2018) for a car that will not live up to your expectations.

bitchilly
Reply to  Tom Halla
August 4, 2017 2:30 pm

i strongly suspect california would be happy to virtue signal all the way until the state was completely bankrupt and its citizens literally dying.
my personal take on this is the large concentration of people borne from generations of heavy drug takers and people of questionable sanity (possibly due to aforementioned drug taking) that in many other places around the world would be termed clinically insane. in california they are deemed special and generally revered by many.
either that or there is something in the water 😉

Shoshin
Reply to  MarkW
August 4, 2017 8:33 am

Lots of demand for Pet Rocks too. Until there wasn’t.

Reply to  MarkW
August 4, 2017 9:00 am

Therein lies the source of Musk’s genius. The hamburger joint doesn’t need to sell any hamburgers if its profits come from government subsidies.

marque2
Reply to  tim maguire
August 4, 2017 9:54 am

Agreed, but to be fair, if the kitchen is at maximum utilization, you can’t sell any more hamburgers. It might not be cost effective or practical for other reasons to expand, or franchise. Musk claims he is in the same boat, he can’t expand production fast enough to meet demand. Unfortunately his demand is heavily subsidized, like “free hamburgers” and partially due to cult status. Eventually though, the cultists move on – even Apple is starting to see a lesser following.

Reply to  tim maguire
August 4, 2017 10:03 am

Kind of like farmers getting paid for not planting crops.

Reply to  tim maguire
August 4, 2017 11:33 am

Tesla makes no profits, but I bet Musk’s salary is large.

toorightmate
Reply to  tim maguire
August 4, 2017 2:33 pm

There is something very “Gore like” in all this.

Santa Baby
Reply to  tim maguire
August 5, 2017 10:37 pm

It’s like wind farms getting paid for nor producing electricity?

Santa Baby
Reply to  MarkW
August 4, 2017 11:04 pm

ITS easier to fool people than ro get them to undestaned they have been fooled?

Klem
Reply to  Santa Baby
August 5, 2017 3:18 am

Speaking of fooling people, I recently saw an interview of Musk by the BBC. During the interview he suddenly developed a slight British accent. It was hilarious.
I think he fooled the BBC, they were too busy swooning and genuflecting to notice.

Gerry, England
Reply to  Santa Baby
August 5, 2017 6:15 am

Rumour is that the BBC pension fund has shares in Tesla – hence all the free advertising pretending to be serious content the BBC gives Tesla.

MarkW
August 4, 2017 7:57 am

With most companies, when demand exceeds supply, they increase supply.
Musk seems to feel that the best response is to decrease demand.

arthur4563
Reply to  MarkW
August 4, 2017 8:16 am

Obviously you are not familiar with Tesla’s situation – they don’t HAVE enough production capacity in their assembly plant to produce the Model S, Model X and now high volume Model 3. They don’t even have enough parking space for their plant employees – they have to park aways away and bus to the plant.

Michael Jankowski
Reply to  arthur4563
August 4, 2017 12:22 pm

Consistently overpromises and underdelivers. Musk seems to be the one who doesn’t understand Tesla’s situation.

MarkW
Reply to  arthur4563
August 4, 2017 1:14 pm

I see that your love affair with Musk and electric cars is blinding you to the obvious.
Musk could expand production by expanding his factory. Heck, they figured out how to lay down asphalt to enlarge parking lots 150 years ago. If Musk has trouble figuring out how, there are 10’s of thousands of contractors who will be more than willing to do it for him.
The fact is, the Musk isn’t fool enough to spend money to expand production, because he knows that this bubble is getting ready to burst.

Chris
Reply to  arthur4563
August 5, 2017 12:46 am

“Musk could expand production by expanding his factory.”
One of the primary constraints is battery production at the GigaFactory. It’s much less related to floor space in Fremont.The bubble is not going to burst, but feel free to short Tesla stock if you are so certain of that outcome.

Cold in Wisconsin
Reply to  arthur4563
August 6, 2017 2:17 am

If Tessa were actually making money on each model, the economic incentive (and outside capital) to expand would be driving expansion. Shareholders would expect and demand it. But if the survival of the company is precarious, and dependent upon disappearing government subsidies, then it makes sense that they are not expanding. I was considering ordering one, but I think I’ll wait. Perhaps Google will bails him out by purchasing the company. They have plenty of money to waste.

marque2
Reply to  MarkW
August 4, 2017 9:58 am

To be fair, you can’t always increase supply – it might not be cost effective, or practical, esp in the sense of a small restaurant. It might be really successful, but to move to a larger location with a bigger kitchen would be cost prohibitive. Also, queues, bring success. There are several restaurants I know of, that people go to, just because everyone is going, and there are long lines. Then they brag how they got in, even on the low end. I don’t think Tito’s Tacos in Los Angeles would do more business if they opened two locations for instance. Their taco’s are decent, but half the fun is the spectacle of the hour long wait to get to the counter, in one of a dozen 50 person lines.

benofhouston
Reply to  marque2
August 4, 2017 12:29 pm

What they said. If you physically cannot supply more product, trying to keep hype down to minimize backlash and dissatisfied customers is generally a good idea.

george e. smith
Reply to  marque2
August 4, 2017 12:31 pm

There is NO restaurant on this planet (or elsewhere) where I would wait for an hour to get into just to eat. It is a source of ENERGY and CHEMICALS that my body needs to keep me alive, and reproducing my cells as they wear out.
If I could absorb all of that out of my morning shower water, I could dispense with that time wasting chore and all the cooking and dish washing that goes with it.
And no I wouldn’t pay anybody $1,000 to sit and wait for a year for a car or any other form of transportation.
There is something inherently unstable about a product that goes out into a market, which thrives on a healthy and vigorous USED CAR market place; or even a “Pre-Owned” market place for those with more money than sense; when that product is likely to be gasping its last breaths, right about the time it is due for entry into that used car market.
Who wants a product with a limited lifetime battery, that is about to die just after you trade it in for a new one that will have the same damn problem.
I can’t buy batteries that last more than about five years; particularly deep discharge rechargeable batteries, and most especially batteries which may have been repetitively fast charged with a 30 minute fast charger, that beats the crap out of a battery.
So why would I want to buy a car that has such a problem, let alone pay in advance to wait a year or two to get it.
G

Reply to  marque2
August 5, 2017 3:44 am

When I left the Army in 1958 I said I would NEVER stand in line again!

kokoda - the most deplorable
August 4, 2017 8:01 am

Baaaaa, Baaaaa

August 4, 2017 8:02 am

Tesla. Not Telsa.

Bruce Cobb
Reply to  David Middleton
August 4, 2017 9:00 am

Dyslexics untie!

MJPenny
Reply to  David Middleton
August 4, 2017 9:08 am

That’s the great thing about us dyslexics, you write “untie” we read “unite.

Greg in Houston
Reply to  David Middleton
August 4, 2017 9:18 am

Stop Daily Sex!

Patrick Meagher
Reply to  David Middleton
August 4, 2017 10:07 am

I vhae sedvocdir a rcue fro sidleiyxa

Greg in Houston
Reply to  David Middleton
August 4, 2017 10:41 am

Ouy felt tou na e. Housld eb sedvocdire

george e. smith
Reply to  David Middleton
August 4, 2017 12:33 pm

Dylsexia is not a problem for us old focks !
g

yarpos
Reply to  David Middleton
August 5, 2017 1:43 am

Dylexsia Lures!! KO!

TinyCO2
August 4, 2017 8:04 am

He’s now taking an interest in other schemes (like grid batteries) and countries where the funding might not have dried up.

arthur4563
August 4, 2017 8:13 am

Last I heard Tesla Model 3 reservation list was over 600,000, which will take Tesla several years of 24/7 production to satisfy, unless they have another assembly plant up their sleeve. Their problem is NOT demand, it is production capacity. Losing 63k off that list is irrelevant to Tesla’s profit picture, and probably due to 1) the normal attrition of any such list and 2) the imminent arrival of the BMW Series 3 electric, which is priced very close to Tesla’s Model 3 and has virtually the same driving range (230 miles), although the Model 3 has a bigger battery option for ,I think, $7500, that extends the range to 330 miles or so, along with even greater acceleration. Those who are dropping off the list may come back after evaluating its BMW competitor and deciding to go with the Model 3. I’m hoping those $7500 Fed subsidies go away – they were inappropriate for Tesla’s $60K plus cars in the first place. The BMW Series 3 and Model 3 electrics can compete in their price range with gas powered cars without any need for subsidies. The Model 3 pricing begins with a base price of $35K and that does not include any Federal subsidies.

BBould
Reply to  David Middleton
August 4, 2017 8:34 am

I’ve been watching Tesla also and I must agree. The competition coming from almost all major manufacturers will have an effect. I’m unsure about the future of Tesla but this new car is a car for the masses because it starts at 35k if memory serves. I’m on the fence.

Reply to  David Middleton
August 4, 2017 8:39 am

We can only hope that the tax payer funded subsidies actually go away.
I still can’t get a sane answer from the eco/libtards that HATE corporate welfare but can’t justify why a $50,000 luxury vehicle should have a TAX PAYER FUNDED subsidy.

I Came I Saw I Left
Reply to  David Middleton
August 4, 2017 8:40 am

Many people are having trouble getting a refund of their interest-free $1000 loan (deposit). Cash flow problem? A run on the bank might ruin Tesla.
Canceling Your Model 3 Deposit? Don’t Count on a Timely Refund
https://www.wired.com/story/canceling-your-model-3-deposit-dont-count-on-a-timely-refund/

Steve R
Reply to  David Middleton
August 4, 2017 9:41 am

It looks like just such a bailout is already in the works……
http://www.businessinsider.com/tesla-stock-price-california-state-government-bailing-out-2017-7

Bryan A
Reply to  David Middleton
August 4, 2017 10:12 am

Probably waiting for ALL the refund requests to come in to file bankruptcy and have the debt excused. Next Batch AKA Bankruptcy filing

Reply to  David Middleton
August 4, 2017 11:21 am

“David Middleton August 4, 2017 at 8:23 am
“Total orders for the entry-level electric luxury sedan dropped to 455,000 from about 518,000, Musk said…
There’s no penalty for cancelling and the $1,000 deposit is refundable. Quite a few people will probably cancel their reservations as the tax rebate disappears from 2018-2019.”

That sounds like the classic Ponzi scheme promise.comment image?dl=0

“WSJ:
During Wednesday’s call, Ryan Brinkman, an analyst for J.P. Morgan , asked if Tesla expected to generate enough cash to meet such a goal at year’s end. Mr. Musk replied that Tesla has negotiated better payment terms with suppliers and aims to build the Model 3 faster than previous models so the company can sell the vehicles before having to pay the bills for parts. But he noted that having “a cash cushion” for unexpected events is wise.
“We are thinking about debt, but we’re not thinking about an equity raise,” Mr. Musk told analysts.
Deepak Ahuja, Tesla’s financial chief, said the company hasn’t yet tapped $800 million of its credit lines and that it could draw $700 million in tax equity funds and debt from its newly acquired solar business. Tesla finished the first quarter with outstanding debt of $9.67 billion, including long-term notes and capital leases, according to S&P Global Market Intelligence. It raised more than $1 billion through debt and stock earlier this year.”

Tesla, with an outstanding debt of almost $10 billion, burned through $1.2 million dollars last quarter. $700 million plus $800 million will last approximately five months at that rate.
When the Ponzi scheme finally fails, all of those purchasers will find their $1,000 very difficult to recover. Investors will find Tesla shares evanescent.

Reply to  David Middleton
August 4, 2017 11:30 am

My Typo.

burned through $1.2 million dollars last quarter

Should be:
“burned through $1.2 billion dollars last quarter.”

Chris
Reply to  David Middleton
August 4, 2017 12:02 pm

“Barring a bailout, the end of the tax credit and competition from large automaker EV’s will kill Tesla by 2020.”
Sure, that explains why Tesla is getting 1,800 new orders per day. Folks placing orders now will know that the tax credit will be gone by the time they get their car, and they are still placing their orders.

2hotel9
Reply to  Chris
August 4, 2017 1:46 pm

Really? Did you tell them all that? You can rest assured Musk and his henchmen are not telling them the subsidy will end before they get their golfcart.

Bryan A
Reply to  David Middleton
August 4, 2017 12:05 pm

AYUP
P.T.Barnum was correct
A sucker born every minute

john harmsworth
Reply to  David Middleton
August 4, 2017 12:37 pm

Perhaps I’m mistaken but is it a 63K reduction is reserved purchases or a 63K cancellation total? The 63K in cancellations would be from 518,000 while the reduction in reserved orders would be 63K including new orders. If new orders were 100K then cancellations would have to be 163K.

Kurt
Reply to  David Middleton
August 4, 2017 1:56 pm

“David Middleton
August 4, 2017 at 8:35 am
$35k is the base price. With the most common options, the price is closer to $60k.”
This logic has never made sense to me. Tesla is selling an electric car that someone is able to purchase for 35K, and can add optional upgrades for more money. The fact that people buying the car are spending that additional money to get the upgrades seems to prove the proposition that the 35K base car option is affordable, does it not? You seem to be strangely critical of the fact that consumers are voluntarily paying more money to Tesla to get the upgrades. If I’m a business, I see this as a success, not a failure.
From a strictly economic perspective, we should applaud this pricing scheme; if a person does not need a car with the larger battery, or the autopilot upgrades, etc. they don’t have to pay for those upgrades to get the car.

Reply to  David Middleton
August 4, 2017 2:27 pm

Dave: the traditional automakers haven’t a clue. The big bottleneck is cell production. Musk broke ground on a battery factory in 2014 that had a planned output slightly greater than 2013 global production by all cell manufacturers. VW just admitted (June 2017) that they need several plants on that scale which don’t exist. Musk has also spent several year putting in a fast charge network which makes cross country trips straightforward.
My own view is that it is the traditional automakers that are toast if they don’t get their act together although not by 2020

george e. smith
Reply to  David Middleton
August 4, 2017 3:05 pm

My idea of a basic transportmobile at today’s worth next to nothing dollar is $20K drive it out the door, no tips no nothing else; and that is with the first full tank full of ethanol free petroleum gasoline (Benzine to some of us) thrown in gratis. I expect it to be able to go 65 mph on the flat. Have NO interest in 165, 265. 365 or any other top speed extras.
G

Kurt
Reply to  David Middleton
August 4, 2017 4:26 pm

“I’m not criticizing the pricing scheme. I’m just pointing out that it isn’t really a car for the “masses” as it’s been characterized…”
But the evidence you’re using doesn’t support your argument. The 35K base price is what it costs to buy the car. The fact that the purchasers who are pre-ordering also are adding on options for additional money doesn’t indicate that the Model 3 is not a “car for the masses.” To the contrary, it seems to suggest that there are large numbers of people who are not only willing to pay 35K for a Model 3, but who will pay that and more.
Unless you have data showing most people only able to afford a 35K car would opt for something other than the Model 3, there’s no point to be made here. All you have is evidence that people pre-ordering the Model 3 (in droves) are paying even more than 35K.

2hotel9
Reply to  David Middleton
August 4, 2017 6:21 pm

I spend 35 grand on a vehicle it will be at least 3/4 ton capacity and 4 wheel drive, or 1 ton/2wheel drive.

MarkG
Reply to  David Middleton
August 4, 2017 6:31 pm

“Unless you have data showing most people only able to afford a 35K car would opt for something other than the Model 3, there’s no point to be made here.”
From what I’ve read, it appears that the base model of this car costs $10k more than a loaded Civic, and has far less features and half the range. Why would anyone in their right mind with $36k to spend buy it over a Civic?
A few years ago, one of the dealers here was advertising a new car for $9.995. The only problem was that no-one wanted a car with no mod cons, and the manufacturer didn’t make many of them so you couldn’t find one in stock. If you actually bought one, you probably ended up paying closer to $20k, and the advertised price was just for… advertising.

Kurt
Reply to  David Middleton
August 4, 2017 8:23 pm

“David Middleton
98-99.9% of people only able to afford $35k for a vehicle, don’t buy Teslas.”
That’s a meaningless statistic. Until about a month ago, that number was 100% because up until now those only able to afford a 35K car couldn’t buy a Tesla. Now they can, but they have to wait in a line until those who were sufficiently wealthy to fork over $1,000, years in advance, get theirs first. Unless you have some kind of a time machine to look into the future, you have no factual basis to conclude that the Model 3 really isn’t a car for the masses. You’d have to have evidence showing that those only able to afford a 35K car wouldn’t find the version of the Model 3 offered at that price acceptable, relative to other 35K cars. You have none.
I suspect that there will be throngs willing to but a 35K car that can get the equivalent of 90+mpg, even at today’s relatively low gas prices.

Kurt
Reply to  David Middleton
August 4, 2017 8:37 pm

“From what I’ve read, it appears that the base model of this car costs $10k more than a loaded Civic, and has far less features and half the range. Why would anyone in their right mind with $36k to spend buy it over a Civic?”
Because the Tesla will get about twice the fuel economy, you can charge overnight and eliminate the vast majority of your fuel stops, and it will drive a lot better, Also, remember that the majority of households in the U.S. have more than one car. If you buy the Tesla as the daily commuting car and have another for road trips, that 35K car may very well save you more than 10K over its life just from the fuel savings. Don’t discount the practicality of a 35K electric car.
It bears repeating that the fact that so many of the pre-orders for the Model 3 are willing to pay extra for the added features seems to suggest that as long as Tesla can ramp up production, it will indeed be a car that masses will buy.

2hotel9
Reply to  Kurt
August 5, 2017 5:01 am

[snip . . . mod]

Kurt
Reply to  David Middleton
August 4, 2017 9:37 pm

“The average Model 3 reservation holder expects to pay $48k and is not “among the masses… These are not people who can only afford a $35k vehicle. The Chevy Bolt is what the Model 3 is advertised as.”
Again, so what? You’re sampling a set of people willing to put a $1,000 deposit down on a car, and making the non sequitur that because such people are wealthy, and will pay more than the $35k base price for added options, that the base option car for 35K must not be desirable to those who are not as wealthy as those who can afford to make an advance reservation. You’re irrationally drawing conclusions about a set of people not sampled, based on the preferences of a set of meaningfully different people who are sampled. For all you know, hundreds of thousands of people per year will be willing to buy the Model 3 at the base option or above.

Kaiser Derden
Reply to  arthur4563
August 4, 2017 8:54 am

actually not selling 65K cars will HELP the Tesla profit picture … when you lose money on every car you less, selling less cars makes sense … if Tesla sold 0 cars he would still have better profits than he ever has as a company … in fact my electric car company is more profitable than Elons 🙂 … I’ve never sold a car and never made a profit (or a loss) …

MikeP
Reply to  Kaiser Derden
August 4, 2017 9:31 am

Actually, could I receive a subsidy for not producing cars? It works for politically connected “farmers” …

The Reverend Badger.
Reply to  Kaiser Derden
August 4, 2017 12:50 pm

At a party I once boasted, quite truthfully, that my company was more profitable than 24 of the constituents of the FTSE100. Yes, the 24 that posted a loss.

george e. smith
Reply to  arthur4563
August 4, 2017 12:36 pm

What “Profit Picture” were you referring to. Tesla survives on charity; it has no profits.
G

George Tetley
Reply to  george e. smith
August 5, 2017 7:01 am

I have just formed a new Company ! It is called ” Move-u”
With ” Solid Fuel-cell ” technology ( cost per mile $0.000021 )
Delivery time 40 (working ) hours
Price $5,000
$1,000 with order ! ah refundable…..Ah!

MarkW
Reply to  arthur4563
August 4, 2017 1:18 pm

If the future is so rosy, why isn’t Musk building a second plant?
Perhaps he knows more about the future of electric cars than you do?

bitchilly
Reply to  arthur4563
August 4, 2017 2:40 pm

the big subsidies always come at the early stage for the people that could afford the product without them. the same happened everywhere with solar panels on private homes . in the uk the average person could not afford the cost of the panels when they first came to market, so those that could got in at the highest subsidy point.
wind turbines and biomass are the same. in the uk the biggest benefactors of tax payer subsidies for “green” energy generation were the major land owners .
i always laugh when i hear people complain about payments to the disabled or unemployed. while there are people in each category that are on the take ,the actual subsidies to the wealthy and large corporates are an order of magnitude greater. i believe the same situation exists in most of the developed nations.

steven F
Reply to  arthur4563
August 4, 2017 9:52 pm

What this article didn’t mention is that after the loss of 63,000 orders there are still 455,000 pre orders on the book. Additionally the number of preorders is still growing but slowly.

yarpos
Reply to  arthur4563
August 5, 2017 1:44 am

absolutely Arthur, losing 63,000 previously committed customers is irrelevant, just ask any business owner.

JimG1
August 4, 2017 8:17 am

63, 000 compared to what? Is there any number of “normal” or average order cancelations to compare to for other vehicles?

Sheri
Reply to  David Middleton
August 4, 2017 9:02 am

Other cars are sold on lots by car dealers. You can drive them home as soon as you make the first payment.

JimG1
Reply to  David Middleton
August 4, 2017 10:49 am

Sheri,
Fyi, many cars are ordered as well as bought off of lots. Just wonder what order cancelations are like in the real car market.

RPT
Reply to  David Middleton
August 4, 2017 1:39 pm

Hardly a cover charge, it is after all refundable!
However, I suspect that this cancellation may partly be due to people who never intended to buy a car, but rather believed they could sell an early delivery at a profit, and are now loosing faith.

Chris
Reply to  David Middleton
August 5, 2017 12:56 am

“No other production vehicles require a $1,000 cover charge to get on the buyer’s list or has an 18 month waiting period.”
So what? Good on Musk for being able to pull off what others could not. There hasn’t been a successful new car company in the US since Chrysler. Car mfg is a very capital intensive business, he’s been able to inculcate enough demand and interest in Tesla to get consumers to help fund his business. Why is that a bad thing if he is open about it?

2hotel9
Reply to  Chris
August 5, 2017 5:08 am

[snip . . . mod]

dan no longer in CA
August 4, 2017 8:21 am

I follow a few electric car blogs. Last month, the Chevy Bolt outsold every other model of plug-in car in the US. http://insideevs.com/monthly-plug-in-sales-scorecard/ but the news from the press just fawns over Tesla. !!The Model 3 is in production!! OMG they delivered 30 cars last month!!!

Doug
Reply to  David Middleton
August 4, 2017 9:40 am

It is interesting the in “the Millionaire next Door”, it is noted that the F150 is the most common vehicle purchased by the affluent, with 30% of the nation’s millionaires owning one. So much for the Tesla appeal to the high end.

Reply to  David Middleton
August 4, 2017 11:37 am

“Doug August 4, 2017 at 9:40 am
It is interesting the in “the Millionaire next Door”, it is noted that the F150 is the most common vehicle purchased by the affluent, with 30% of the nation’s millionaires owning one. So much for the Tesla appeal to the high end.”

Working trucks are utilitarian; needed and used by people around the world to actually accomplish work.

Chris
Reply to  David Middleton
August 4, 2017 12:04 pm

“Wake me up when EV’s out-sell Ford F-Series pickup trucks.”
As the graphic shows, there are far more car models than truck models, so your statement is relatively meaningless.

2hotel9
Reply to  Chris
August 4, 2017 1:47 pm

The number one seller, and that is the best come back you can think up?

Ill Tempered Klavier
Reply to  David Middleton
August 4, 2017 6:13 pm

Amen. What do I drive? F-150 4×4 long box. Why? Because I can haul my tools (saws, drills, hammers, wrenches, welder, cutting torch, whatever) and also go fetch the materials for just about any project I get involved in. When I go out gigging, my B-3 and twin Leslie cabinets fit in nicely along with almost all the rest of the band’s gear. Just for fun, tried a (not very) Smart belonging to an acquaintance of my daughter’s. After we crammed a Yamaha plank keyboard, lts stand, and a Peavy Vyper 30 amp in, he could barely get in to drive it.
Sure some people like “cowboy Cadilacs,” (must be a guy thing) but people who have work to do buy what they need to do it with.

MarkG
Reply to  David Middleton
August 4, 2017 6:37 pm

“So much for the Tesla appeal to the high end.”
Self-made rich people generally get rich by not wasting money.

Chris
Reply to  David Middleton
August 5, 2017 1:00 am

David Middleton said: “Ford sold 77,895 F-series pickup trucks in June. Total PEV sales in June were just 17,182 vehicles.
Wake me up when the combined total of PEV’s overtakes the sales of Ford F-Series pickup trucks. I won’t want to miss that milestone. I would ask to be woken up wen any single PEV make or model overtakes the F-Series, but I doubt that will be possible in 2120.”
There are 7 models in the F Series family. So your 77,895/month is 11,000 per model. Shall I wake you up when the Tesla Model 3 delivers more than 11,000 cars in a single month? Hint – it’s going to be before 2020.

2hotel9
Reply to  David Middleton
August 5, 2017 6:51 am

[snip . . . mod]

Chris
Reply to  David Middleton
August 5, 2017 12:57 pm

David Middleton said:”I don’t have a handy breakdown of the F-Series; but I don’t think it’s a even distribution. I think the F-150 is the dominant model of the series.
So, wake me up when the Tesla Model 3 outsells the Ford F-150.”
David, there are 7 F-150 Models, just as I stated. The XL, XLT, Lariat, Raptor, King Ranch, Platinum and Limited. Shall we make a bet that the Tesla Series 3 will not sell more than 11,000 cars per month by 2020?

2hotel9
Reply to  Chris
August 5, 2017 6:35 pm

“there are 7 F-150 Models” And they out sell Teslas. Why? They are functional and affordable. When is Musk going to produce anything to match it?

Chris
Reply to  David Middleton
August 5, 2017 11:28 pm

David Middleton said: “The F-Series models are the F-150, F-250 and F-350. The XL, XLT, Lariat, Raptor etc. are trim and option packages, not distinct models.”
Since Ford makes them, I think Ford would be the authority on this. Here is a link to Ford’s web site, which allows you to compare the different models. They call them different models, not different trim packages. https://www.ford.com/trucks/f150/2017/compare-models/

Trebla
Reply to  dan no longer in CA
August 4, 2017 9:28 am

I agree. The Chevy Bolt sounds like a great little car at a reasonable price.

Bryan A
Reply to  Trebla
August 4, 2017 10:15 am

Little being the operative word. It is tough to get inside without stepping on your own feet

john harmsworth
Reply to  Trebla
August 4, 2017 12:45 pm

Another “great” Chevy small car, to join the historic ranks with the Chevette, the Monza, the Cobalt and the Cavalier! No thanks!

Tom Halla
Reply to  David Middleton
August 4, 2017 12:51 pm

The Vega also had a terrible engine.

john harmsworth
Reply to  Trebla
August 4, 2017 2:30 pm

Good catch, David! The North american Lada! Lol

Reply to  Trebla
August 4, 2017 2:37 pm

Trebla – difficulty that GM has is that the Bolt won’t scale without a lot more investment in cells.

Will Nelson
Reply to  dan no longer in CA
August 4, 2017 3:18 pm

On one hand Cris has a point. As an “F-series” owner myself (150) I have often squinted at their sales numbers. The numbers are for a “series” which include a very wide range of models compared to sales of a whole bunch of different car models, that is, the car sales are more diffuse over the range. On the other other hand all those car models represent a whole bunch of model types that can’t fairly be lumped into a too broad category called “cars” for comparing to the F-series. So, to be fair, we should compare sales numbers of just the F-150 all by itself against any one ZEV model. Who knows, the orders of magnitude might be very close…

Will Nelson
Reply to  Will Nelson
August 4, 2017 3:18 pm

Sorry Chris, I meant Chris.

Chris
Reply to  Will Nelson
August 4, 2017 10:13 pm

Will, thank you for your point, which David Middleton completely ignored. I just checked how many models are in the F series. There are 7. So to be fair, his 77,000 figure for June should be 11,000.

rbabcock
August 4, 2017 8:24 am

Tesla has to refund the deposits on the 63,000. Not chump change for a cash flow challenged company.

Kaiser Derden
Reply to  David Middleton
August 4, 2017 8:56 am

guaranteed that the banks lend him money based on the escrowed deposits …

I Came I Saw I Left
Reply to  David Middleton
August 4, 2017 8:57 am

That money certainly isn’t in the depositor’s hands, and it’s not just sitting there doing nothing.

Tom in Florida
Reply to  rbabcock
August 4, 2017 9:48 am

Did someone say Ponzi?

Gary Hoffman
Reply to  rbabcock
August 4, 2017 3:12 pm

And I hope that every single person who does not get a refund check promptly sues Tesla in small claims court.

wws
August 4, 2017 8:37 am

They’re way cool to look at, but still….
government subsidized toys for very rich boys.

Reply to  David Middleton
August 4, 2017 8:49 am

Last week I drove past an “S” that was being used as a limo.

Yirgach
Reply to  David Middleton
August 4, 2017 1:48 pm

The Model 3 is about as boring as it gets.
For that price you could get a used Volvo or even an older 5 speed SAAB and really have vehicle which you can drive.

Javert Chip
Reply to  David Middleton
August 4, 2017 2:54 pm

Wow. A used Volvo.

Bill Illis
August 4, 2017 8:45 am

The Tesla Model 3 is just an ugly car. Who wants to drive around in that. The design alone will kill this car once the customers start to see what it really looks like.
http://media.caranddriver.com/images/media/51/10-tesla-model-3-843-photo-667958-s-original.jpg
http://blog.caranddriver.com/wp-content/uploads/2016/04/2018-Tesla-Model-3-105-626×382.jpg

RPT
Reply to  Bill Illis
August 4, 2017 1:46 pm

Resembles a toad if you ask me!

john harmsworth
Reply to  RPT
August 4, 2017 2:32 pm

Maybe if you kiss it, it turns back into a…. subsidy!

RPT
Reply to  RPT
August 4, 2017 3:29 pm

John H
Would be nice, but in this case I believe the process is irreversible!

CapitalistRoader
Reply to  Bill Illis
August 4, 2017 4:00 pm

I saw one parked in a Denver alley yesterday, in a ritzy part of town. Not ugly, not beautiful. Just a car.

Reply to  Bill Illis
August 4, 2017 7:34 pm

That electric car is slower than this old car. A 55-year old technology beating Elon’s “state-of-the-art” technology. You must know nothing about cars to like Elon’s cars. Those people who cheer the Tesla car launch think a supercharger charges the battery LOLcomment image

Chris
Reply to  Dr. Strangelove
August 5, 2017 1:05 am

So what? You’re comparing a performance car against a general purpose sedan. I guess by your logic a Toyota Camry is a crap car because it has a 0-60 figure slower than a Shelby Cobra.Gee, some folks need room for more than 2 people. Some folks need cargo room.

2hotel9
Reply to  Chris
August 5, 2017 5:11 am

[snip . . . mod]

Reply to  Dr. Strangelove
August 5, 2017 2:03 am

Then why go electric when you have a Camry? Because they are powered by coal power plants? Because they have good acceleration? That’s why they advertise the 0-60 figure. Not good enough for grandpa Shelby. BMW M5 sedan can do better

Chris
Reply to  Dr. Strangelove
August 5, 2017 11:36 am

Dr. Strangelove, some folks think climate change is real and want to do something about it. Why do I need to explain this to you?

2hotel9
Reply to  Chris
August 5, 2017 6:29 pm

Climate change is real, humans are not causing it and can not stop it. Get over yourself, you are not all that important.

Chris
Reply to  Dr. Strangelove
August 5, 2017 1:02 pm

David Middleton said: “If Tesla aficionados think they are doing something about climate change by purchasing PEV’s… then the Gorebal Warming cult is stronger than the Apple and Tesla cults combined.”
MIT spent 4 years analyzing this, and came to the conclusion that the answer is yes. What’s your evidence that they are wrong, David? http://news.mit.edu/2016/electric-vehicles-make-dent-climate-change-0815

2hotel9
Reply to  Chris
August 5, 2017 6:38 pm

Climate changes, constantly. Humans are not causing it and can not stop it. Period. Expend resources on something useful, not the lie of man caused blahblahblah.

Chris
Reply to  Dr. Strangelove
August 6, 2017 12:10 am

David Middleton said: “Even if 90% of vehicle owners joined the Tesla cult, a 90% conversion to EV’s would require a 25% increase in electricity generation. ”
Here is a sample load curve: https://www.eia.gov/todayinenergy/detail.php?id=130 There is low demand at night, so clearly enough capacity if EV charging loads were added at night. Most Americans own their own house, so nighttime charging plug access would not be a problem. And EVs are far better for urban pollution issues. I really don’t see the purpose in arguing against them, even if one does not believe in AGW and the need for action.

schitzree
Reply to  Bill Illis
August 5, 2017 7:55 pm

That nose looks like whoever designed it didn’t realize it wasn’t going to need a front grill or radiator.
○¿●

Craig
August 4, 2017 8:47 am

It’s hard to wrap your mind around the idea of “bailing out” a business that has never made money.

Kaiser Derden
Reply to  Craig
August 4, 2017 8:58 am

I like to say that my electric car company is more profitable than Elons … when you lose money on every car you sell it actually makes sense to want to sell less of them 🙂 (I guess 🙂 )

john harmsworth
Reply to  Kaiser Derden
August 4, 2017 12:53 pm

If I give you -1000 dollars, will you not make one for me? If so, do you want to mail me a cheque or do a direct deposit?

Steve R
Reply to  Craig
August 4, 2017 9:45 am

Its easier to imagine when you note that California state retirement system is among its major shareholders.
http://www.businessinsider.com/tesla-stock-price-california-state-government-bailing-out-2017-7

Steve R
Reply to  Steve R
August 4, 2017 9:46 am

Oops, that was supposed to be a reply to Craig above.

August 4, 2017 8:50 am

nice

Chas Wynn
August 4, 2017 9:07 am

RE: ‘No other production vehicles require a $1,000 cover charge to get on the buyer’s list or has an 18 month waiting period.’
That would be Soviet Russia and their not much lamented Trabant. A scary portent for us perhaps?

Martin A
Reply to  Chas Wynn
August 4, 2017 2:23 pm

Trabant was E German.

Mike Smith
August 4, 2017 9:20 am

There will be a lot more cancellations as soon as the subsidies run out.

Moderately Cross of East Anglia.
Reply to  Mike Smith
August 4, 2017 11:08 am

Didn’t the Trabant actually work and some are still running decades after their hapless owners finally got them. I wonder how many electric cars will still be working after one decade and the size of the mound of discarded battery packs they will each have gone through.

ReallySkeptical
Reply to  Moderately Cross of East Anglia.
August 4, 2017 11:47 am

as far as I can tell, as long as you switch out the battery packs and tires, an EV could run indefinitely in a place like CA.

MarkW
Reply to  Moderately Cross of East Anglia.
August 4, 2017 1:26 pm

You could switch out an engine and drive train for a small fraction of what switching out the battery pack will cost.
The engine and drive train will also last about 10 times longer than the battery pack as well.

Mike Smith
Reply to  Moderately Cross of East Anglia.
August 4, 2017 1:28 pm

Although an EV has some reliability advantages, electric motors do fail; coils burn out, bearings seize. And EV’s are not immune to other relatively expensive repairs — failure of the power steering, the air conditioner, electronics. We’ve experienced all of those on our conventional cars in the past few years.

john harmsworth
Reply to  Moderately Cross of East Anglia.
August 4, 2017 2:35 pm

With Trabant- you only jack up radiator cap and put different car underneath. Much cheaper and nowhere to go in Soviet Russia anyway! California just copy cat USSR!

Ill Tempered Klavier
Reply to  Moderately Cross of East Anglia.
August 4, 2017 6:23 pm

My kraut husband says a good mechanic can keep one running fairly well, but disowns them as an example of German engineering.

2hotel9
August 4, 2017 9:20 am

Ya know, everybody keeps telling me what an unparalleled genius Musk is, how he is the most intelligent, creative, caring and dynamic human being to ever live. And the more I hear him speak the more one name keeps coming to mind. Elmer Gantry.
Tesla appears, to me, to be one big, convoluted and intricately timed grift. From what I can find in the public domain his primary source of income is tax money from various governments with absolutely no prospect that those governments will get ANY of that money back, ever. And people applaud him for it. What a sweet scam

AZ1971
August 4, 2017 9:21 am
jorgekafkazar
Reply to  AZ1971
August 4, 2017 11:05 am

AZ, here at WUWT, we like our graphs to have both axes identified. I immediately recognized the ordinate units to be quatloos per cubic gimoig, but less familiar readers might not know that.

Steve from Rockwood
August 4, 2017 9:28 am

I’ve been thinking for a long time that the California state government is genius, pure genius. They are transferring their energy grid and automotive industry both into local (state) industries, much of it based on debt and Federal government money. On its own, California is the world’s 5th (or 6th) largest economy. The US cannot afford to let it fail. California politicians know this.
Tesla will not fail and neither will the green energy programs in California. This is a great strategy to keep industry within the state, even if it is inefficient and loses (costs more) money. Brilliant.
And when it comes time to bail out the underfunded pensions for teachers, fire fighters, police, municipal and state workers, just wait for the next Federal Democratic government. Politicians will always give away your money to stay in power. We know it and they know we know it. That is why government is growing into business (like subsidizing electric cars). Eventually so many people will work for the government or a company that is subsidized by or needs bailing out by the government that socialism will have succeeded. That is when we all win. Just ask Venezuela. They are getting tired of winning.

MarkG
Reply to  Steve from Rockwood
August 4, 2017 6:42 pm

“The US cannot afford to let it fail. ”
Why not?

MarkG
Reply to  MarkG
August 4, 2017 7:48 pm

So they can afford it, but won’t.
Except the Federal government doesn’t have enough money to bail out the states, when it already owes something like $20,000,000,000,000 to its debtors.

Resourceguy
August 4, 2017 9:29 am

Is there any moral dilemma if one screams past a Tesla vehicle stuck on the side of the road with no charge left? Or could it be considered an eye for eye in Muslim doctrine?

climanrecon
Reply to  Resourceguy
August 4, 2017 10:34 am

No need to worry, a recovery vehicle will come along soon, recharging via a … gas-powered generator.

dan no longer in CA
Reply to  climanrecon
August 4, 2017 1:10 pm

Or just install a diesel powered charger like this one:comment image

jorgekafkazar
Reply to  Resourceguy
August 4, 2017 11:07 am

I recommend a friendly “meep-meep!” as you pass. Waving is optional.

MarkW
Reply to  jorgekafkazar
August 4, 2017 1:28 pm

Which finger should I use while waving?

August 4, 2017 9:34 am

Best short I have ever seen. Better than Bombay, on which I made a small fortune. Question is when to pull the trigger. Musk says wants to keep cash above $1 billion. They have 3 and will burn 2 2h17 on the Model 3 launch. Means a major financing in 4Q17. He says leaning debt not equity. I doubt banks would lend, so means another multibillion bond sale. Judging how that goes might clue the short timing. Another possibility is when 6months of “production hell” doesn’t end in 6 months. So yearendish.

Taylor Ponlman
Reply to  ristvan
August 4, 2017 9:39 am

Not sure why Musk is so bad at business. My solar/wind conglomerate has been at break even since I started thinking about it, and that’s without a dime in subsidies. /sarc off

Steve R
Reply to  ristvan
August 4, 2017 9:49 am

Tesla would be foolish not to use equity for their next round of cash.

Chris
Reply to  ristvan
August 4, 2017 12:07 pm

Go ahead and join the hedge funds that have lost $500M shorting Tesla.

2hotel9
Reply to  Chris
August 4, 2017 1:51 pm

Perhaps you could list them all for us? To help people avoid such reckless hedge fund operastions, of course.

Chris
Reply to  Chris
August 5, 2017 1:08 am

“Perhaps you could list them all for us? To help people avoid such reckless hedge fund operastions, of course.”
Here you go. Google is your friend, 2hotel9. It took me 10 seconds to find the link. https://www.cnbc.com/2017/08/03/hedge-funds-set-to-lose-hundreds-of-millions-on-wrong-way-bet-against-tesla.html

2hotel9
Reply to  Chris
August 5, 2017 5:18 am

[snip . . . mod]

Tsk Tsk
Reply to  ristvan
August 4, 2017 6:25 pm

The market can remain stupid longer than you have money in all likelihood. Yes, reality is likely to catch Tesla eventually, but this is such an emotional stock that I wouldn’t touch it going in either direction.

EmptyTomb
August 4, 2017 9:36 am

Hard-core and lifelong auto industry guy here.
Most of you folks are missing the point when applying hard, cold logic to Tesla’s market position or it’s eventual success (or failure) as more established players begin to enter the e-car fray.
Purchasing a vehicle is almost always an emotional decision. Were that not true, we would all be buying or driving 4-year old, 4-cylinder, white Toyota Camrys. In fact, the demand for such an appliance would be so high that Toyota would have to figure out how to make and sell 4-year old cars.
Financials and politics aside, Tesla has been able to imbue their brand with an emotional appeal that is unsurpassed in the auto industry and in consumer products in general. Their ability to sustain that appeal is what predicts ultimate success or failure. One might argue that Tesla is making operational decisions that will negatively affect the emotional connection they have built with their fans and customers. I am not among that group.

Steve R
Reply to  EmptyTomb
August 4, 2017 12:11 pm

I think if you really look into the matter, you will discover that “emotional appeal” is quite limited.

Chris
Reply to  EmptyTomb
August 4, 2017 12:13 pm

Hey, a voice of reason. Tesla makes good products. Yes, they are expensive – more so than their competitors – but customers are still lining up. Now, if they massively bungle their mfg scale up, that loyalty will change. But for now it is intact.
And for those who say it cannot last, that people will not pay a premium – that is exactly what people said about Apple. And that prediction has been proven wrong for a very long time.

Chris
Reply to  Chris
August 5, 2017 1:12 am

Agreed, Musk would rather lose customers in the queue than ship crappy products. I doubt Tesla will ever be a mass mass market car company like Ford, GM or Toyota. But for those of us that think a move to electric cars is important, Tesla has done more than any company in the world to catalyze the automotive industry to push forward in this area. Without Tesla, I suspect that hybrids would have been the main focus for the next 20 years, with only tepid efforts on EVs.

Patrick MJD
Reply to  Chris
August 5, 2017 5:24 am

“Chris August 5, 2017 at 1:12 am”
They will be expensive garden ornaments in a few years, that is for those who can afford one, a garden that is.

Chris
Reply to  Chris
August 5, 2017 11:40 am

PatrickMJD said: “They will be expensive garden ornaments in a few years, that is for those who can afford one, a garden that is.”
Nonsense argument, but hey, if it works for you, so be it. The batteries are good for at least 10 years. For anyone who has a remote clue about engineering, they know that a battery plus motors has fewer failure points than an ICE.

Reply to  EmptyTomb
August 4, 2017 4:56 pm

i drive a 4 year old white camry. well, grey. but i would have gone white just as easily.

ShrNfr
August 4, 2017 9:39 am

Always remember that every reservation is an interest free loan to TSLA.

August 4, 2017 9:41 am

I’m not a Tesla fan, but the headline about cancellations is silly. Of course some people are going to cancel a reservation. But the number of reservations is rising rapidly. Tesla has done a good job of creating demand for the car. The question will be whether they can make money in the long run.
http://www.businessinsider.com/tesla-model-3-reservations-hit-1800-per-day-2017-8

Chris
Reply to  David Middleton
August 4, 2017 12:18 pm

9,000 per week makes up that 63,000 in 7 weeks. Big deal. And your 200,000 statement about cancellations is pure conjecture. And it ignores any positive impacts of Tesla 3s in the market having on orders. So far the car is getting rave reviews.

Chris
Reply to  David Middleton
August 5, 2017 1:24 am

“Unless Congress changes the law, Tesla will get killed.”
First, your statement assumes that folks that have put down their $1,000 have no idea that the cap on EVs for the tax credit is 200,000 per company, or that Tesla is currently sitting at 125,000. Telsa lists the various programs here: https://www.tesla.com/support/incentives And they say “Most programs are limited to a total dollar amount that can be dispersed or will expire on a certain date.”
Tesla fans are pretty tech savvy, so most should know about this – for example, Tesla has a very active forum which is part of the main corporate web site: https://forums.tesla.com/forum/forums/updated-projection-us-tax-credit-phase-out-updated-070317-after-ems-tweets-m3
But yes, some may not do the math. So there could be some fallout. But certainly new folks signing up will know they have zero chance of the rebate. Also, 1/2 the orders are from outside the US, so those are unaffected by US policy.

2hotel9
Reply to  Nicolas Nierenberg
August 4, 2017 1:27 pm

So Musk is conning 1800 people per day out of $1000? And anyone really thinks he is going to produce that number of $65,000 “cars”. Do the math, Musk claims 600,000 people are in line to buy this car, and there are 1800 more people EACH day getting on the list. Wow, what a sweet scam. And how many has he actually, in reality, not on paper, produced so far? Just such a sweet scam.

Chris
Reply to  2hotel9
August 5, 2017 1:26 am

You state that it’s a scam but provide zero proof that it is.

2hotel9
Reply to  Chris
August 5, 2017 5:17 am

[snip . . . mod]

yarpos
Reply to  2hotel9
August 5, 2017 2:02 am

The IRS in the US has a general rule that a business must make a profit in 3 years of the last 5 years to be considered a business, rather than a hobby. Why is it that Tesla is allowed to even sell shares?

Patrick MJD
Reply to  2hotel9
August 5, 2017 5:22 am

“Chris August 5, 2017 at 1:26 am”
You provide no proof it isn’t.

Chris
Reply to  2hotel9
August 5, 2017 11:42 am

PatrickMJD, it was 2hotel9 that made the accusation. Should not he provide the proof?

2hotel9
Reply to  Chris
August 5, 2017 6:32 pm

Musk is a conman, very smooth, very glib, and that is all. According to you he is getting 1800 people per day to give him $1000, that is a sweet con, right there.

Chris
Reply to  2hotel9
August 6, 2017 12:14 am

“Musk is a conman, very smooth, very glib, and that is all. According to you he is getting 1800 people per day to give him $1000, that is a sweet con, right there.”
It’s not a con in the slightest. It’s been done for decades at the very high end of the car market and in many other sectors. It’s only a con if he doesn’t deliver them a car, or refuses to give them back their money.

Paul Penrose
August 4, 2017 9:49 am

I’m really curious as to why anybody would care whether Tesla makes a profit or not, except of course investors and possibly existing car owners. Now, I would not favor any kind of bail-out should they fail, but that’s my attitude towards any business. And even in the case of a future bail-out, I would blame the government, not Tesla/Elon. I just don’t understand the Elon Musk hate. Sure he makes a lot of money taking advantage of government subsides and tax credits/loopholes, but then so do many other people/businesses, like Apple, Google, etc. Heck, I took a big education credit last year because my son was in school and living at home. I’m sure that some disagree with that particular “subsidy”, but I claimed it legally, just like Elon is doing, so am I so bad for doing that? I pay over 50% of my earnings in taxes if you include all Federal, State, and local taxes and fees. If I can legally claw 1% back, I’m going to. And so would all the Elon Musk haters out there.

Greg in Houston
Reply to  Paul Penrose
August 4, 2017 9:57 am

I for one do not fault anyone for taking full advantage of government regulations. Even the Kochs say this – it would be stupid not to. I haven’t read all the comments, Paul, but did anyone say it was “bad” to accept a rebate?

Steve from Rockwood
Reply to  Greg in Houston
August 4, 2017 11:30 am

Taking advantage of a subsidy is one thing. Basing your business model around it is another.

Greg in Houston
Reply to  Greg in Houston
August 4, 2017 12:08 pm

No it’s not, Steve. It happens all the time, and usually because that’s the intent of the subsidy. But one who bases a business model on government subsidies does so at the whim of politicians. (I am not defending subsidies by the way.) Homebuilders expect to build a certain number of homes per year, and their projections for new homes are based in part on the deductibility of mortgage interest – a subsidy.

Chris
Reply to  Greg in Houston
August 4, 2017 12:28 pm

“Taking advantage of a subsidy is one thing. Basing your business model around it is another.”
Exactly, Greg. By Steve’s logic the homebuilding industry is not sound. And much of farming -subsidies have been part of that sector since the 1970s if not earlier. The same is true in many other sectors. You can call loans from the Ex-Im bank a subsidy. Does that mean that Boeing is as guilty as Tesla?

john harmsworth
Reply to  Greg in Houston
August 4, 2017 1:29 pm

We are the fools for allowing our elected governments to “play big shot” with our money. They really have no idea what they are doing and cumulatively it hurts all of us a great deal. They can barely accomplish the tasks that are properly theirs like education.

Tsk Tsk
Reply to  Greg in Houston
August 5, 2017 9:13 am

“Exactly, Greg. By Steve’s logic the homebuilding industry is not sound. And much of farming -subsidies have been part of that sector since the 1970s if not earlier. The same is true in many other sectors. You can call loans from the Ex-Im bank a subsidy. Does that mean that Boeing is as guilty as Tesla?”
The homebuilding industry is NOT sound. Did you forget 2007? The mortgage deduction is a massive inefficiency in the market places which inflates the prices of houses.
Farming subsides ARE a problem for the same reasons.
Boeing IS as guilty as Tesla (although not as guilty as Airbus).
I don’t know what you think you proved, but it certainly didn’t vindicate subsidies.

Chris
Reply to  Greg in Houston
August 5, 2017 11:44 am

Tsk tsk, my intention was not to vindicate subsidies, but to say they are a common part of business practice. One can debate the merits, but remember that other countries will offer them regardless of what the US does.

2hotel9
Reply to  Paul Penrose
August 4, 2017 1:29 pm

Its our tax money he is taking, and I want it returned with interest.

Paul Penrose
Reply to  2hotel9
August 5, 2017 7:19 am

Are you just being selective here, or do you think everybody should return all “subsidies” and tax credits they have received?

2hotel9
Reply to  Paul Penrose
August 5, 2017 5:43 pm

Musk is a conman, you consider him to be Jesus reborn. You worship Al Gore, too?

Reply to  Paul Penrose
August 4, 2017 2:52 pm

Paul Penrose: I agree. And anyway didn’t GM get a vast bailout a few years back (I’m not an American). If handouts are on offer, people take them whether they agree with the principle or not. The Chinese are supporting their nascent EV industry too, and if the US doesn’t do likewise it may not have an auto industry by mid century

Chris
Reply to  John Hardy
August 5, 2017 1:28 am

We can debate the merits or demerits of subsidies. China has subsidized solar, steel, chip manufacturing, ship building and other sectors. Europe has subsidized unprofitable farming and shipping for decades. So calling out Tesla for these subsidies is ignoring the fact that the same thing happens in many industries.

yarpos
Reply to  Paul Penrose
August 5, 2017 2:06 am

How is it a business if it doesnt make a profit long haul? How can the be allowed to issue shares?

Paul Penrose
Reply to  yarpos
August 5, 2017 7:24 am

The goal of a business is usually to make a profit, but there are a few exceptions (Sally Mae for example). Just because they all don’t succeed at that goal changes nothing. In fact, most businesses startups do fail. It’s entirely possible that Elon started Tesla not to make a profit, but to advance the state of the art in electric vehicles. You see, internal combustion engines won’t work on Mars.

2hotel9
Reply to  Paul Penrose
August 5, 2017 6:13 pm

Sally Mae and Freddie Mac were not “businesses”, they were schemes to defraud the tax payers and collapse the mortgage industry by pulling mortgages which had been let to people who had no ability to pay them together into packages and then foisting them off on other financial institutions. And they worked precisely as designed.

FerdinandAkin
August 4, 2017 9:51 am

And the Double Jeopardy categories are:
Will the government allow Tesla to go broke? Will they get a bailout?
“I will take Get A Bailout for 500 Billion Alex!”

2hotel9
Reply to  FerdinandAkin
August 4, 2017 1:28 pm

Will that be so the people he is scamming get their money back?

Paul Penrose
Reply to  2hotel9
August 5, 2017 7:26 am

It’s not a scam if he provides people with what he promised. So far, I haven’t seen him promise anything he hasn’t delivered.

2hotel9
Reply to  Paul Penrose
August 5, 2017 6:27 pm

Far as I can see all he has done is con people out of money, in several directions, so he can live the caviar dreams&champagne wishes lifestyle Robin Leach espoused all those years ago. You seem to be in absolute lust with the man. Exactly how do you profit from his grift? Must be one hell of a payout.

Chris
Reply to  2hotel9
August 6, 2017 12:18 am

“Far as I can see all he has done is con people out of money, in several directions, so he can live the caviar dreams&champagne wishes lifestyle Robin Leach espoused all those years ago. You seem to be in absolute lust with the man. Exactly how do you profit from his grift? Must be one hell of a payout.”
And you seem to have an absolute, irrational hatred of the man. Why do you care so much about him and Tesla? Federal tax credits are going away, so there is nothing to whine about with regards to your tax dollars going to waste. As long as you are not signing up for a Tesla, whyshould you care?

Paul Penrose
Reply to  FerdinandAkin
August 5, 2017 7:25 am

My vote would be NO. But it all depends on who we, as voters, put into the White House and Congress over the next couple of elections.

getitright
August 4, 2017 10:04 am

Once a new boy on the block invokes the Gull Wing fad it’s downhill all the way.
Just ask Bricklin.

Resourceguy
August 4, 2017 10:46 am

Debt free and loving it—-thanks in part to reliable, used gasoline engine vehicles and staying away from Calif. and NY.

Bruce Cobb
August 4, 2017 10:51 am

Those who peddle green sleaze will eventually get slimed.

Tenn
August 4, 2017 12:43 pm

I’ve always thought tesla made a huge mistake – they should have created a luxury, small volume, car. This would serve to experiment/demonstrate their technology. Then focus on licensing/manufacturing the tech for other car makers to “convert” their cars using tesla tech. An tesla electric Ford focus, and tesla electric Chevy Malibu, etc.
They would be come a parts supplier with drop in tech to electrify any existing model of vehicle. Let Chevy and Ford worry about the high volume manufacturing – they are very good at it. Tesla would just worry about the perfecting the battery and drive train systems only. plus their other pursuits (soar panels and batteries).
Try to become the AC Delco, not the GM, of the auto world.
And it would have been easy – rather than buying ZEM certificates, the car companies could buy the drive trains and batteries from Tesla, and create their own electric vehicles instantly. And they would never “top out” of the price support – tesla could always move on to another manufacturer.

Steviek
August 4, 2017 12:50 pm

I don’t like styling of model 3.

dan no longer in CA
Reply to  Steviek
August 4, 2017 1:17 pm

Every time I see a silver Model 3, I think of the cheesy robots in the Doctor Who “Pyramids of Mars”
http://ichef.bbci.co.uk/corporate2/images/width/live/p0/2x/lb/p02xlb5h.jpg/624

Javert Chip
Reply to  Steviek
August 4, 2017 3:24 pm

Steviek
Two comments to “I don’t like styling of model 3”:
1) So, don’t buy one.
2) So what?

yarpos
Reply to  Steviek
August 5, 2017 2:00 am

styling is completely subjective

markl
August 4, 2017 1:23 pm

California will bail out Tesla if it came to that. It’s their virtue signaling company….. high tech, provides supposedly green jobs, first modern automaker outside of Detroit in the US, provides pollution free transportation, lets the world know how committed they are to ‘Climate Change’. What’s not to like for Californians? With a lock on Progressive government who’s to say no? They’ll just tax all their Capitalists.

john harmsworth
Reply to  markl
August 4, 2017 1:32 pm

Isn’t that the place where it rains so much? Except when it doesn’t.

john harmsworth
Reply to  john harmsworth
August 4, 2017 2:39 pm

Hell, it rains money if you’re a funny looking kid with a crazy dream!

yarpos
Reply to  john harmsworth
August 5, 2017 1:58 am

yes the permanent drought , changed its mind

Felflames
Reply to  markl
August 4, 2017 2:33 pm

Haven’t all the Capitalists moved to Texas yet?

Chris
Reply to  Felflames
August 5, 2017 1:31 am

No, not remotely the case. But thanks for asking.

August 4, 2017 2:29 pm

I’m going to order one …
just for the pleasure of canceling my order.
Tesla = coal burning car.
Government subsidies MUST end.

Gary Kerkin
August 4, 2017 2:58 pm

Thanks David Middleton for the John Clarke video on the European Economy. Along with many other Kiwis, I mourn his death about 3 months ago. A Kiwi himself, he came to prominence portraying a cartoon farmer character, Fred Dagg, then shifted to Australia making a business of stirring their politics and those of other countries. Search YouTube for John Clarke. He even made some pithy comments about climate change. If you really want a good laugh, look for the video clip “The Front Fell Off”.

Robber
August 4, 2017 3:19 pm

Musk has promised to ship the world’s biggest battery to South Australia (129 MWhr) before year end to bail out SA’s 50% renewables electricity grid. How many Tesla batteries does that equate to?
Some Teslas have 100 kWhr batteries, so that’s about 1,290 Teslas parked side by side and hooked up to the grid – giving, not receiving power.
Alternatively, Tesla Powerwalls being sold to backup home rooftop solar have a capacity of 13.5 kWhr, so the world’s biggest battery simply needs 9,500 Powerwalls lined up side by side.
Or what’s the capacity of a submarine’s batteries? SA is about to start making submarines.

RPT
Reply to  Robber
August 4, 2017 3:33 pm

But conventional submarines are the only place a hydrogen fuel cell makes sense.

Griff
Reply to  RPT
August 5, 2017 1:22 am

there has been a quiet revolution in the tech used in submarine batteries…

Patrick MJD
Reply to  RPT
August 5, 2017 5:20 am

“Griff August 5, 2017 at 1:22 am”
Reference?

Menicholas
Reply to  Robber
August 4, 2017 8:24 pm

“…giving, not receiving power.”
Son, wronger words have rarely been committed to print.
I suggest you look up the definition of the word “battery”.
Then think again.

August 4, 2017 4:17 pm

I realize more everyday the TARP was the worst possible social/economic president since the New Deal itself. Every credit/central planning excess is now modeled for nationalization by stealth. Certainly healthcare is on the track but junk alternative energy related holds the golden get-out-of-jail card as well.
Tesla is national embarrassment yet I expect them to be untouched by subside cuts. The default process a form of hostage taking.

Reply to  cwon14
August 4, 2017 4:22 pm

“Precedent”

Warren Blair
August 4, 2017 4:43 pm

Musk a soft crook low enough to pass-off on the esteemed name of true genius Nikola Tesla.

August 4, 2017 4:54 pm

Bah, so they lose a couple of their subsidies. They have like 7 more layers of government handouts they’re sucking on. They’ll be fine.
And I thought the fix was already in to extend the subsidies.

Warren Blair
August 4, 2017 5:12 pm

Ye shall be restrained and connected at the one end to a mercury-arc-rectifier and at the other a Tesla coil of no less than 30,000 volts.
If your mind is not ameliorated to the satisfaction of the panel the procedure shall be repeated . . .

August 4, 2017 7:57 pm

Elon Musk fancies himself the real-life Iron Man. That is just hubris. Stan Lee created the character in 1963 before Elon was born and Stan’s inspiration was Howard Hughes. Elon’s real hero is Nikola Tesla, the archetype mad scientist. Here the similarity is obvious except Tesla was also a genius, Elon is just madcomment image

Reply to  Dr. Strangelove
August 4, 2017 10:31 pm

Why all this hatred of Mr Musk. Anyway it wasn’t him, but the original founders, who chose the name “Tesla”.. It is actually highly appropriate because their cars are powered by three phase AC induction motors

Reply to  John Hardy
August 5, 2017 12:37 am

Because he’s “staggeringly dumb” and Tesla is a complete failure by his own admission. I give him credit for his honesty here:
they had “no idea what we are doing,” and characterizing their original efforts as “completely clueless,” Musk admitted that he wanted to invest 99 percent of the company’s Series A funding, to avoid having investors and friends lose money on the endeavor.
Musk says that the company was founded in 2003 based on assumptions which “turned out to be staggeringly dumb.”
Musk admitted that the early Roadster “was completely unsafe,” it “broke down all the time,” and it “didn’t really work.”
Musk’s ambitions for increased Tesla production are nearly laughable… The recently-introduced Model X SUV has had so many quality-control problems,
Musk also pointed out that the biggest problem with the Model X—those ridiculous “falconwing” rear doors—hasn’t even been fixed yet.
http://www.roadandtrack.com/new-cars/news/a29378/elon-musk-admits-to-shareholders-that-the-tesla-roadster-was-a-disaster/
That’s all folks! Shall I now talk about his ridiculous plan to colonize Mars? Oh that’s his rocket exploding in a great fireball. Who wants to ride Elon’s bomb? I mean rocket LOLcomment image

Chris
Reply to  John Hardy
August 5, 2017 1:34 am

Dr. Strangelove said: “Because he’s “staggeringly dumb”….
Yeah, a guy who started a breakthrough car company, a rocket company, who is innovating in solar roof tiles, and who co founded Pay Pal, which revolutionized online payments, is staggeringly dumb.

2hotel9
Reply to  Chris
August 5, 2017 5:13 am

[snip . . . mod]

Chris
Reply to  John Hardy
August 5, 2017 1:39 am

John Hardy said: “Why all this hatred of Mr Musk.”
Excellent question. He gets trashed for getting deposits and having wait lists – something other companies would do if they could get away with it. Both are common in the very high end car market, he has been able to do that for a mass market car. Bizarre criticism. He’s pulled off starting an extremely capital intensive business from scratch, something that hasn’t been done in 100 years, and he gets pilloried for that. But because he thinks AGW is real, and he’s an advocate of getting off fossil fuels, he gets attacked here on WUWT.

Reply to  John Hardy
August 5, 2017 1:44 am

That’s what he said. Call him a liar. Fanatic fool!

Warren Blair
Reply to  John Hardy
August 5, 2017 1:47 am

Yes we know all that. There’s a thousand other entities more worthy of using that ‘trade mark’ but no one has presumed to because no one would seek to borrow legitimacy in such a manner from such an esteemed name. It’s just opportunistic and Musk should have changed the name upon becoming CEO.

yarpos
Reply to  John Hardy
August 5, 2017 1:57 am

Yes Chris, the operative word is “co-founded” , no sign that he was the intellectual powerhouse or the lucky passenger when it comes to technology.

Reply to  John Hardy
August 5, 2017 2:37 am

“I’m personally spending an enormous amount of time on the production line,” said Musk, according to Mashable. “My desk is at the end of the production line. I have a sleeping bag in a conference room adjacent to the production line, which I use quite frequently.”
He’s not camping in for fun. He’s in charge of product design and quality. He prides himself as an engineer, a physicist by education and writes technical papers. He admits many faults despite fans denying it was his fault. Being rich doesn’t make one a great engineer or scientist.

2hotel9
Reply to  John Hardy
August 5, 2017 5:04 am

[snip . . . mod]

Chris
Reply to  John Hardy
August 5, 2017 1:36 pm

“Yes Chris, the operative word is “co-founded” , no sign that he was the intellectual powerhouse or the lucky passenger when it comes to technology.”
Oh good grief. Fine, only give him 10% credit for Pay Pal. It doesn’t matter in the slightest. Telsa has jump started the EV market throughout the planet. Before Musk, it was hybrids with EVs an afterthought. And SpaceX. And Solar City. And the solar tiles business. And providing an impetus for Hyperloop.
It absolutely baffles me how people, 99% of whom have very modest personal accomplishments, go out of their way to trash him. The planet has around 7B people. Name me 5 that have done more in the business world in the last 10 years.

TimTheToolMan
Reply to  John Hardy
August 6, 2017 12:11 am

Dr Strangelove says

Because he’s “staggeringly dumb” and Tesla is a complete failure by his own admission. I give him credit for his honesty here:

Musk doesn’t have the luxury of decades of experience in the car industry and his electric cars have their own set of issues too. Not only is Musk producing the cars, he’s also putting in the charging stations across the US, a massively capital intensive exercise and he knows he has to do this before he’ll get any sort of acceptance. Its chicken and egg and its expensive.
And he’s building the giga factory for the batteries he needs, another massively capital intensive project. Frankly with only $10B debt, he’s doing far better than most in the US. If you’re especially worried about where the US taxpayer money is going, I’d recommend studying this…comment image
Then consider why your tax dollars should be turning soldiers into millionaires…oh no wait…

yarpos
Reply to  John Hardy
August 6, 2017 3:27 am

” Name me 5 that have done more in the business world in the last 10 years.”
I know you will have some subjective soft measure about genius, innovation (even when other are doing the same) and virtue, but seriously its a business , so based on profit and ROI the most companies in the S&P will do for a start.

TimTheToolMan
Reply to  John Hardy
August 6, 2017 4:38 am

yarpos writes

I know you will have some subjective soft measure about genius, innovation (even when other are doing the same) and virtue, but seriously its a business , so based on profit and ROI the most companies in the S&P will do for a start.

And as a business one might consider its market cap. Particularly in relation to other car manufacturers.
http://ei.marketwatch.com//Multimedia/2017/06/09/Photos/MG/MW-FO167_auto_c_20170609143025_MG.jpg
The key words were “done more” not “most profitable” and you might have forgotten that building assets in the manufacturing plant, giga factory and charging network are not “soft measures”. You might think its all on the back of tax payers but GM was given over 10B dollars in 2009 as its bailout and it wasn’t even as an incentive for strategic direction that electric cars/renewable energy are…
There is so much hate here for Musk and I dont understand it at all. Dont like electric cars? Dont buy one.

Menicholas
August 4, 2017 8:14 pm

““It’s like if you’re a restaurant and you’re serving hamburgers and there’s like an hour-and-a-half wait for hamburgers — do you really want to encourage more people to order more hamburgers?””
Upon reading these words, a notion suddenly popped into my head quite unbidden: Hamburgers are the muscles of dead cows, ground up into a paste, then pressed, then thrown onto a scorchingly hot plate of metal and nearly incinerated, until every protein in the entire dead squishy matrix is denatured and unrecognizable as being what it once was.
And then I decided to do something dramatic!
I leapt up from my comfy sofa and threw a couple of burgers on a plate of scorchingly how metal…same as I always do when I have such gruesome thoughts.
Hamburgers are murder!
Juicy, delicious flame-broiled murder!
Mmmmm…burgers….*slobber/drool*
https://youtu.be/gpQzJe0z5Qk?t=1m1s

yarpos
August 5, 2017 1:50 am

Tesla have just announced a price drop on the X and the S. So if you are losing money on each car you produce , you lower the price. I guess you make it up on the volume…..no, wait, umh, never mind

Kurt
Reply to  yarpos
August 5, 2017 3:39 am

The marginal cost of production for the Model S is reportedly around 33k, well below the sales price. The oft-stated assertion that Tesla loses money on each sale of the Model S is premised on the mistaken calculation of assessing sunk costs (engineering, manufacturing equipment etc) into the cost of each vehicle. These are fine for determining whether to start a venture and the period of recovery, but you can’t use sunk costs to determine the sales price. Drug manufacturers understand this well – it’s why they agree to sell the Canadians their drugs at steeply discounted prices.

Tsk Tsk
Reply to  Kurt
August 5, 2017 9:17 am

It’s all sunk costs? Explain his negative free cash flow then.

Tsk Tsk
Reply to  Kurt
August 5, 2017 9:19 am

And big pharma sells it’s drugs at price controlled prices to Canada and Europe because they know they can recoup their costs in the only major free market on the planet: the US.

Tsk Tsk
Reply to  Kurt
August 5, 2017 9:19 am

Ugh. “its” not it’s. Not enough Dew yet this morning.

TimTheToolMan
Reply to  Kurt
August 6, 2017 4:46 am

<Tsk Tsk writes

It’s all sunk costs? Explain his negative free cash flow then.

Do you know what’s included in the costs? How about the provisioning of the charging network? Or the building of the giga factory? And tooling up for the Model 3 even?
Other car manufacturers have decades of experience with their supply chains. Tesla is experiencing the pains of massive growth.

Gamecock
August 5, 2017 5:36 am

63,000 cancellations out of 500,000+. I don’t think there is any information that can be teased out of that data. Meh.

Chris
Reply to  Gamecock
August 5, 2017 11:47 am

Nope, there is not. Other than some people don’t want to wait 2 years to get the car they wanted.

Andyj
Reply to  Chris
August 5, 2017 5:15 pm

Chris, nobody was misguided here. They all wanted a smaller, cheaper Model S by 2019. I’ve been following this very closely, so here’s my take. They didn’t figure on the competition catching up and the “3” to have the same features as the “S”. Those who have, decided to bail and get another EV earlier.
Somebody said the Cobra was faster? Here’s a Tesla powered Cobra that’s considerably faster. The race follows the stills. – It’s scary!

Patrick MJD
Reply to  Chris
August 6, 2017 1:43 am

Is that was fluid filled radiator with an electrically powered cooling fan?

Sara
August 5, 2017 5:16 pm

So, does anyone want to guess how long it will be before Musk/Tesla says that nasty word ‘bankruptcy’?

2hotel9
Reply to  Sara
August 5, 2017 6:17 pm

Musk never will, he has insulated himself with several layers of cutouts and deaddrops so he will appear the squeaky clean choirboy of the Church of Man Caused Globall Warmining, and image he has casrefully crafted.

Andyj
Reply to  Sara
August 5, 2017 6:32 pm

Sara, David, not noticed Musk is not about collecting money but building an empire. All the reserves are reinvested. There’s little doubt he’s going to be the Google of his field.
The detractors here made fools of themselves over Musk too many times already. It’s getting a bit embarrassing now.

Zeke
August 5, 2017 9:47 pm

David Middleton links: Tesla’s Projected Earnings Are Sensitive To ZEV Credits – What If They Go Away?
Anton Wahlman
“Tesla got $139 million from this government program [Zero Emissions Vehicle], even if the check comes directly from the other automakers, not from a government treasury. It’s a tax-and-subsidy in everything but name….As it turns out, there is one scenario which would have the potential for California itself to wake up and question the ZEV program. It has to do with California’s non-electric car buyers having to bear the full burden of these huge electric car subsidies that currently are borne by all the other customers of Ford (NYSE:F), General Motors (NYSE:GM) and the other automakers outside of California.”
Oh for a word picture of the Economics of Californians! Wait, here it is:
“In every group of fifty, there’s always that one who does something to drive up the costs for everyone else, without paying the bill himself or herself. He or she drinks half the punch bowl, and then pukes on the carpet. The other forty-nine pay for the damage.
In the automotive world, that one in fifty is California. Despite having the nicest climate in the country, a few cultists have indoctrinated themselves into an obsession with the idea that California has a problem with its weather, temperature, etc. In order to fix this problem with the weather, Californians must be forced to buy electric or hydrogen cars. By 2025, 15.4% of the cars sold in California are mandated to be such cars: here.”

Zeke
August 5, 2017 10:21 pm

“Think about it. This is usually what happens when one state decides to tax a product. Residents in other states don’t pay another state’s sales tax. Or even an excise tax such as that on a cigarette pack. If one state adds a $4 per pack tax, that means that those people pay – not the people in another state.
What California is doing with the ZEV mandate is effectively imposing a tax on the people who don’t buy an electric (or hydrogen) car. It’s a tax in all but name. The difference is that California is getting away with consumers across all other geographies paying for it! It ought to be obvious that this is insanely unfair, economically as well as politically. I’m surprised that the automakers have given California a free pass on this – thus far.
The same thing goes for all other goods in society. If California imposes some law that makes it more expensive to build a house there, the guy who is building a house in Wyoming doesn’t suffer.
If the automakers don’t act on this, the consumers around the country have a case to bring against California. Why should they pay for subsidized luxury car consumption by hippies and billionaires in San Francisco?”
~~~
So the “credit” is really a check from people who bought gas engine cars and trucks, and the “market” for EVs is really a California government mandate. There ought to be a reversal of this, where you pay me back my check and also a fee for tormenting the English language like that.

nevket240
August 6, 2017 3:43 am

Melon has ‘first mover’ advantage, at the present time. When the other cars Co’s start ramping up their product line it will be a different story. No money(subsidy) no honey(sales.)
http://www.businessinsider.com/tesla-sales-stopped-in-hong-kong-tax-break-for-electric-cars-scrapped-2017-7?IR=T
regards

ivankinsman
August 8, 2017 4:20 am

Anybody who sets out to criticise Tesla is a communist. Tesla started production with 1,000 workers. By 2013, this had risen to 3,000, and to 6,000 people in June 2016. Anyone who wants to see Tesla fail in its production and sale of state-of-the-art electric vehicles wants to see the livelihoods of its American automobile workers taken away and an increased burden put on the state via social security payments. Why are commentators here not applauding the decision of Elon Musk, Tesla’s founder and CEO, to produce American cars with American workers? What a bunch of Reds.

ivankinsman
Reply to  David Middleton
August 8, 2017 5:10 am

Business exist for making a profit and creating jobs but we can argue this until the cows come home.
I looked at this report. The Devonshire Research Group seem to be a rather obscure, contrarian research outfit based in Boston. This is an article by Forbes magazine which I think is rather better known for its business-related research and opinion:
https://www.forbes.com/sites/greatspeculations/2015/09/01/teslas-business-model-highlights-what-the-shift-to-electric-means-for-the-auto-industry/#56bfa1e13523

Chris
Reply to  David Middleton
August 8, 2017 8:01 pm

“Outside of the Communist world, businesses don’t exist for the purpose of creating jobs. Businesses exist for the purpose of make a profit.”
Amazon has proven the inaccuracy of that statement for the last 20 years. In the early years they lost money, then barely broke even. It is only now, in roughly year 20, that they are making any profit at all – and that is still quite small as a % of their total revenues. I agree that companies do not exist for the sole purpose of job creation, but the vehemence of the attacks on Musk, who has created thousands of good paying jobs in America, is astounding and shameful.

Tom Halla
Reply to  Chris
August 8, 2017 8:13 pm

Bezos made his money off stock appreciation, not dividends. He was willing to go for market share, and investors in Amazon agreed with his strategy.

2hotel9
Reply to  ivankinsman
August 8, 2017 5:42 pm

Tesla has been dead a very long time. Cacth up, buttercup.

CapitalistRoader
Reply to  2hotel9