Car Buyers Get Hijacked by Crony Capitalism

Bad auto laws keep costs high and stifle competition... even in Texas.

Gov. Rick Perry is fond of saying that Texas is "wide open for business." A couple of months ago he was in Illinois offering hope to local companies suffering from burdensome government regulation. "There is an escape route to economic freedom," he said, "a route to Texas."

He had a point. His state offers businesses room to roam. But there is an exception: Tesla, a maker of luxury electric cars, which has found that the road into the Lone Star State is a dead end.

Tesla offers a new kind of car, which this year was named "Car of the Year" by Motor Trend. It also has a new way of selling -- directly to consumers, without going through a franchised car lot.

It says the old system inflates the cost of buying a car. It has no faith in existing dealers, who mostly handle gasoline-powered vehicles. "How do you sell the future if your business depends on the present?" a Tesla official has asked.

But that approach faces many obstacles. No fewer than 48 states ban or limit direct sales of automobiles. Some states allow Tesla to sell its cars through company-owned stores. Some allow Tesla to open showrooms but not sell cars in them.

Texas is virtually closed for business. The Austin American-Statesman reports: "You can visit one of the two galleries Tesla Motors operates in the state -- one in Austin, the other in Houston -- but employees can't tell you how much the car costs. They can't offer you a test drive. They can't even give you their website address. And if you buy one, the car is delivered by a third party -- in a truck that's not allowed to have Tesla markings."

The state senate in North Carolina has approved a measure forbidding sales except through franchised dealers. After Tesla opened a store near Denver, the Colorado legislature passed a law to prevent it from opening any more. Illinois, by contrast, allows Tesla to sell cars at company-owned outlets.

The effort to prevent direct sales comes from existing car dealers, who like the arrangement they have. They claim to be trying to prevent "unfair competition," but the competition they prevent looks unfair only to those who profit from a protected market.

Bob Glaser, head of the North Carolina Automobile Dealers Association, told the Associated Press, "It's a consumer protection, and why we say that is a dealer who has invested a significant amount of capital in a community is more committed to taking care of that area's customers."

But deciding who will take better care of an area's customers is normally left up to those customers. If Tesla treats them badly, it's not likely to survive. Ask the former owners of online retailers like Lillian Vernon and RedEnvelope, which went from success to bankruptcy.

The correct complaint about Tesla is that it relies so heavily on federal loans and tax credits aimed at promoting greater fuel efficiency. But General Motors got some help, too, and no one is trying to punish it.

There is no reason to expect direct sellers to mistreat consumers. Amazon has become a $60 billion operation by serving them better or cheaper than local stores. Michael Dell made his fortune shipping computers directly to consumers. At this point, direct sales are not a fearsome leap into the unknown.

Glaser conjured another reason why the people at Tesla should not be allowed to operate as they prefer. "You tell me they're gonna support the little leagues and the YMCA?" he demanded. Tesla says, actually, it will -- not that sponsoring youth athletics is, or should be, required to do business in America.

A more honest assessment came from Bill Wolters, president of the Texas Automobile Dealers Association, who fears that "if they change the franchise laws, it allows every other manufacturer to come in and do what Tesla is going to -- compete with our family-owned businesses."

Among those li'l ol' businesses is Red McCombs Ford in San Antonio. McCombs used to own the San Antonio Spurs and the Minnesota Vikings, and his net worth is about $1.4 billion. But never mind that. Since when is "compete" a bad word in free-market Texas?

This is not about protecting consumers or even assuring the survival of Little League baseball. It's about established businesses leveraging government power to enrich themselves. They get the express lane to themselves, and consumers get left by the side of the road.

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  • ||

    God Damnit Texas, seriously.

    Pull your head out of your ass.

  • KMA Too||

    Ya know, I never realized, or even fully knew, that TX pulled this shit. But, now that I've read about it, I whole-heartedly agree, Nate.

  • Loki||

    TX has never been the truly 100% free market libertopia that some people seem to think it is. Their main selling point is that they're not as bad most states, and their state taxes are low.

  • ||

    I love this state, but we do some retarded ass shit. I blame the liberals in Dallas and Austin. (And the crazy socons)

  • AdamJ||

    As an Austinite, I take offense (although not really). Austin certainly has its flaws, mainly that the people have never met a bond election (tax increase) they didn't like. But way better than dealing with the looney social conservatives and blood-thirsty racists that are so prevalent elsewhere in the state.

  • AdamJ||

    And total side bar here, but am insane in preferring an income tax to a property tax? I realize that if we had an income tax, we'd probably have a property tax and sales tax too, but if I had to choose one or the other I think I'd rather have an income tax.

  • Thomas O.||

    And go through ANOTHER too-big-to-be-reformed shitpile of tax breaks, tax credits, and millions of pages of rules?

    Thanks but no thanks, I like my state's income-tax-free status.

  • Agammamon||

    Look, as screwed up as this is, I find it hard to drum up sympathy for Tesla.

    Live by crony capitalism, die by crony capitalism.

  • Weapon||

    And when has Tesla done anything crony?

    Check Tesla's records for lobbying and campaign contributions. They are virtually none existent.

    In comparison, these dealerships spent millions on lobbying and campaign contributions.

  • Overt||

    Tesla as a company exists solely because of crony capitalism. They received ridiculous subsidized loans to buy and use capital. And now everyone thinks they are all successful because they are "profitably" selling "high margin" cars whose margin would be completely erased if buyers didn't get $12,000 to $15,000 checks from the government for our purchase.

    A bunch of rich investors at tesla taking taxpayer money in order to get more tax-payer money from well-to-do liberals so they can drive luxury cars? Sorry, that is crony capitalism.

  • Overt||

    And BTW: Tesla's CEO, Musk, has been a pretty good poster child for chronieism

    http://freebeacon.com/obama-do.....thrilling/

  • Weapon||

    The government is not giving Tesla checks for 12k-15k for each purchase.

    As far as loans goes, they paid back the loan in full with interest. Considering in loans you pay mostly interest first, then principal and the speed they repaid the loan. It was't such a subsidized loan with that considered.

  • Overt||

    "the government is not giving Tesla checks..."

    Please. I never said that. I said that buyers are being given checks to buy teslas. And they are. And you have to be willfully obtuse to fail to understand that giving a buyer a check to buy a car is pretty damn close to just giving the check to the company itself.

    The loan helped Tesla get its capital. Then, based on their sales of subsidized cars to the rich, they were able to get a high valuation in their IPO. They then turned around and used this money to pay off the loan.

    Their initial capitalization, operating revenue, salvation from bankruptcy, inflated margins and profitability that justifies their market capitalization- everything- is completely a factor of their ability to get the government to support them. With guaranteed loans early on, and now with guaranteed margins- the government basically guaranteeing to investors that they will be profitable.

  • Sevo||

    ..."the government basically guaranteeing to investors that they will be profitable."

    Pretty sure there are investors who hope that, but I'm also pretty sure quite a few are betting on the bigger fool hoping so.
    Right now, Tesla not only benefits from the buyers' subsidies and the market in tax credits, but it's also getting free charging stations for the cars it offs to get those rents (think HP printers and inks).
    Those will remain free as long as there aren't too many Teslas. And Musks' plans to provide battery-swap stations are extremely pie-in-the-sky, hinging on all sorts of government hand-outs in all likelihood.
    This is VW under Der Fuhrer at the risk of godwining; government motors, except for the rich instead of der volk.

  • Weapon||

    Sevo, its not getting free charging stations. Tesla is giving free charging in their supercharger stations. Each car pays 2k to charge at a supercharger.

    The amount of cars on the road doesn't matter as each car will fund 2k towards the charger. Not only that, Tesla is able to make profit off the chargers by using batteries to buy electricity at night from the grid, and sell electricity at peak hours. This helps mitigate the costs as well.

    And since the batteries are already there are the supercharger, they double up for their battery swapping program.(I am going to guess the batteries will be rented but idk we will see at 8pm pst).

    There is also no government program that funds battery swapping. why exactly are you resorting to making things up and making assumptions? Did a Tesla run over your dog or something?

  • Sevo||

    Weapon| 6.20.13 @ 7:38PM |#
    "Sevo, its not getting free charging stations. Tesla is giving free charging in their supercharger stations. Each car pays 2k to charge at a supercharger."

    Strange that a google search for 'free electric car charging stations' gives me this:
    "These chargers, and future additional charging stations, will serve customers with clean, Hetch Hetchy hydroelectricity. The charging units are monitored for energy usage, fuel savings and greenhouse gas reductions and their energy is available to the public at no-cost through 2013."
    http://www.sfwater.org/index.aspx?page=516
    Your lying is getting tedious

    "There is also no government program that funds battery swapping."
    And I claimed nothing of the sort, asshole.

    Look, you've been shilling for this sleazebag all day. Do you work for Tesla?

  • Weapon||

    Sevo,

    The chargers your linking to are not Tesla superchargers. They are funded by the city as part of an infrastructure roll out.

    Even then, the chargers your linking to are only free for 1 year.

    As for when you said this, who is the person who said this?

    " And Musks' plans to provide battery-swap stations are extremely pie-in-the-sky, hinging on all sorts of government hand-outs in all likelihood."

  • Weapon||

    The buyers are not getting checks to buy Teslas, the buyers are getting none refundable tax credits. That means that you get to pay less taxes, but you won't get a penny from the government itself. That said considering the amount of 7.5k does not even account for 10% of the average car sold, and Tesla's backlog, it is highly unlikely that it effecting sales just yet.

    Actually, the money used to pay off was a 2nd offering, not the IPO.

    Tesla ran into financial issues in 2009, before the loan. The ones who saved Tesla was Mercedes investment. The government also cannot guarantee margins. So you know, ZEV credits will be dried up by the end of the year. Even without ZEV credits, Tesla will be profitable with 25% margins.

  • Sevo||

    Weapon| 6.20.13 @ 7:30PM |#
    "The buyers are not getting checks to buy Teslas, the buyers are getting none refundable tax credits."

    Look, asshole, your sophistry is getting insulting.
    So you presume the people posting here are as stupid as you? Or are you trying to get 'clever' and slide one by.

  • Weapon||

    "Look, asshole, your sophistry is getting insulting.
    So you presume the people posting here are as stupid as you? Or are you trying to get 'clever' and slide one by."

    I prefer to use the actual meanings of words and not their liberal interpretations. I am not asking for perfect grammar or spelling here, just making concise points without diluting the meaning of words into talking points.

    I am also not presuming anything about anyone's intelligence. That said, it is hard to take anyone who resorts to insults seriously. Simply because psychologically, humans resort to insults when they have nothing to counter an argument.

  • Overt||

    "That means that you get to pay less taxes, but you won't get a penny from the government itself"

    Let's see here. If I buy a Bimmer I pay 75k and X in taxes. But if I buy a Tesla, I pay 85k and X - 10,000 in taxes. If you really want to be a pedant, you can call it an offset in fees owed or forgiveness for dues. But either way, the net affect is the same- the consumer paid more to Tesla, but their net balance is the same.

    "That said considering the amount of 7.5k does not even account for 10% of the average car sold, and Tesla's backlog, it is highly unlikely that it effecting sales just yet."

    It is not 7.5k. It is anywhere from 10k to 15k. Those states where Tesla happens to have presence- CA, CO, MA, etc- happen to be the places where those subsidies are highest.

    10% is huge and your bald assertion- without evidence to the contrary- is absurd. Without the tax credit the car costs people 10 - 15k more than a comparable car. With the tax credit, the car is competitive with comparable cars. This isn't brain surgery.

    "Even without ZEV credits, Tesla will be profitable with 25% margins."

    They will have 25% margins because they can charge $80k for a car whose closest competitors sell for $65k. Without those subsidies (which are different from the emissions credits), tesla would not be making anything near respectable margins.

  • NotAnotherSkippy||

    Oh God, I am absolutely sure this is the same putz (Weapon) I was debating on another site. The same guy who claimed that "net profits don't matter." Or that SG&A and R&D don't really count as expenses. TSLA got $68million from CA on top of the $7500 per car they got from the feds. And on top of that they get to use all of the infrastructure for free. How's that, you ask? Well TSLA owners don't pay any federal gas tax. How's that for problem of the commons and freeloading?

    Operationally TSLA still lost money last quarter. Even if you want to ignore the tax credit and the $68million in ZEV imposed by CA, then you still have to count the $10.7MM they booked from retiring the federal loan. That means they made a whopping $550k pseudo-profit in their "wildly" successful quarter (again excepting the millions upon millions they got from the government). Oh, and they didn't pay the loan back with interest. They paid it back with your tax money. $7.5k * 5100 vehicles = $38.25MM. The interest that the taxpayer "received" was about $26MM, so not only did you loan them money, but you actually PAID them to borrow money. Great job if you can get it...

  • Weapon||

    "But either way, the net affect is the same- the consumer paid more to Tesla, but their net balance is the same."

    Not exactly, if say most of your earnings are in other countries and you don't pay much taxes here in the US. Then you won't be able to utilize the credits in full.

    "It is not 7.5k. It is anywhere from 10k to 15k. Those states where Tesla happens to have presence- CA, CO, MA, etc- happen to be the places where those subsidies are highest."

    Tesla has presence everywhere. And so you know MA has 7.5k. CA at 10k is one of the bigger states but other then California, most of the orders are in 7.5k states.

    "10% is huge and your bald assertion- without evidence to the contrary- is absurd. Without the tax credit the car costs people 10 - 15k more than a comparable car. With the tax credit, the car is competitive with comparable cars. This isn't brain surgery."

    That 10k-15k is covered by the fact that you have 95% less maintenance and much lower fuel costs.

    "They will have 25% margins because they can charge $80k for a car whose closest competitors sell for $65k. Without those subsidies (which are different from the emissions credits), tesla would not be making anything near respectable margins."

    If average sell price is 94k. 25% is 23.5k profit. Even if all the states tomorrow gave everyone 15k for EVs. The profit would be 8.5k which is around 9% profit. That is on par with other luxury cars.

  • Danno||

    Texas also gets quite a bit of Federal dollars from taxpayers.

  • ChrisO||

    Texas was essentially founded by a crony capitalist. It's a fundamental part of the state's DNA.

    Auto franchising laws are really the same species of rent-seeking as alcohol distribution laws. Affected consumers are a large but diffuse and poorly informed group that has no chance of competing for lobbying influence with small, highly motivated groups like car dealers and beer/wine wholesalers.

  • AdamJ||

    Didn't they just take the teeth out of the beer distribution cartel?

  • Gray Ghost||

    Considering the two beer bills recently passed by the Leg this session were largely written by the distributors, I'm going to say the cartel's teeth are doing just fine.

  • The Late P Brooks||

    Elon Musk is not a hero of capitalism.

  • ChrisO||

    No one's saying he is, but that doesn't mean he should be barred from selling his wares in Texas without setting up a silly distribution network more suited to Fords and Toyotas.

  • Ray||

    Tesla is whining about crony capitalism. Be still my heart.

  • AlexInCT||

    ^^^ THIS.

    When it is not a company sucking on the government's teas - meanign the tax payer subsidizes inefficiency - wake me up so I can bother to care.

  • Loki||

    Crony capitalists always bitch and moan when other cronies try to screw them. They're a lot like TEAM hacks in that way.

  • Weapon||

    And when has Tesla done anything crony?

    Check Tesla's records for lobbying and campaign contributions. They are virtually none existent.

    In comparison, these dealerships spent millions on lobbying and campaign contributions.

  • KPres||

    Correct me if I'm wrong, but aren't they getting a $10,000 subsidy on each car?

  • Sevo||

    KPres| 6.20.13 @ 3:42PM |#
    "Correct me if I'm wrong, but aren't they getting a $10,000 subsidy on each car?"

    Depending on the state it may be more or less, but Tesla isn't getting that.
    Folks, RTFA:
    "What the EV startup did make its money from, is selling its zero-emission vehicle credits, a by-product (and legitimate part) of its main business. In doing so Tesla made $68 million from these credits, as well as a further $17 million from selling Greenhouse Gas emission credits."
    http://theenergycollective.com.....g-its-cars

    Tesla does NOT sell cars! They sell tax credits they get from the cars! The cars are the vehicle (sorry) to collect the credits, that's all.
    They made $87M last year from the credits and probably lost their shirts on the cars.

  • Overt||

    Sevo- while they may get supplemental money from carbon trading, they also make significant money from sale of their Tesla sedan. Financial analysts are swooning for them because they make 20 - 25% margins on these cars, which is spectacular for a luxury car maker.

    Of course that implies that the car they sell for 75,000 is making around 15k in profit. Most of that would be erased if customers weren't getting 10 - 15k in rebates from the government.

    So yes, they are profiting quite a bit from selling cars. They get 15,000 in profit, some rich liberal gets a fancy car, and the only one who has to pay is the government!

  • Weapon||

    The amount of money they make from carbon trading is 17 million which is the ghg credits. The 68 million is ZEV credits which are not carbon credits.

    As far as margins go, Tesla is not making 25% margins just yet. They will be making 25% margins without any credits by end of the year.

    The price of the car is 70k-110k depending on options. Currently the average price sold is around ~94k. Customer gets 7.5k none refundable tax credits, but they would have no effect on Tesla's profitability in the short term.

    Also, the car is being bought by liberals, conservatives and moderates. It really is an awesome car. It is hard to explain, you just have to test drive one to understand.

  • Sevo||

    Weapon| 6.20.13 @ 5:05PM |#
    "The amount of money they make from carbon trading is 17 million which is the ghg credits. The 68 million is ZEV credits which are not carbon credits"

    Sol? It's $87M or government rent.

  • Weapon||

    Government rent would imply that the money comes from the government. But the money doesn't, it comes directly from the other automakers as they buy these credits. Without Tesla, the automakers would be paying 2x more for the credits.

    But again, even without the credits, Tesla is capable of being profitable. Wait till the end of this year and you will see. But like any corporation, if the opportunity is there to make money, you make use of it. They aren't the ones passing these laws either.

  • Sevo||

    Weapon| 6.20.13 @ 5:49PM |#
    "Government rent would imply that the money comes from the government. But the money doesn't, it comes directly from the other automakers as they buy these credits."

    You don't know what the hell you're talking about.
    Government HAS no money. ALL government rents are extracted from the population at gunpoint and distributed to the favored folks.
    If you don't like being called an idiot, stop being one and learn something before you stick your fingers on the keys

  • Weapon||

    Setvo, the money for ZEV credits does not come from the population either. ZEV credits are also not at federal level but at state level.

    It is plain obvious to me Stevo that you have no clue what your talking about, but I can tell you that without resulting to insults.

  • Sevo||

    Weapon| 6.20.13 @ 7:44PM |#
    "Setvo, the money for ZEV credits does not come from the population either."

    Yes, asshole, it comes from unicorns.
    Go away.

  • Weapon||

    Sevo, if you did your research you would know that ZEV credits are bought by other manufacturers. The price of the ZEV credits are based on supply and demand.

  • Overt||

    People would not be buying it if not for the 10,000 - 15,000 in tax credits unless they reduced their price down to less attractive prices. Their gross margins right now are 17% and their forecasted margins are 25%- this is what values their company so high. And yes, it is upwards of 15k because of state incentives.

    But those margins would disappear overnight if the subsidies were gone. As would the valuation of the company.

    I'm not just spitballing here. I priced out a tesla when I was shopping for a commuter. I agree that it is a beautiful car. But even when I factored in the very generous 14k i'd have gotten from Fed + CO, it made only a little sense. A Tesla with the performance of an A6/535/E450 costs a little more than those models heavily loaded, and doesn't have many of the gadgets like HUD, Nightvision, parking assist, lane keeping or adaptive cruise.

    Take away the subsidy and you would be paying $80,000 for a car that competes with (and has fewer features than) a fully loaded, $63,000 A6 or $72,000 well loaded 535i.

    Tesla's profitability, and therefore its attractiveness to investors and therefor its ability to payoff loans is ALL due to laws enacted by people Musk has given tens of thousands of dollars to. Pretty nice ROI.

  • Sevo||

    Overt,
    Please see Sevo 5:24.
    I'd like to know how you figure Tesla is making any money at all on the cars, given those numbers. I simply do not see it.
    BMW sold some 1.7M vehicles in 2012. Porsche sold some 150,000, both of pretty well developed tech, and their margins aren't anywhere close to what you're claiming.
    Tesla sold perhaps 5,000, absorbing the development costs for brand new technology spread over that number.
    I need to have some evidence.

  • Overt||

    Sevo- make sure you are comparing apples to apples. I'm talking gross margins not overall operating margins.

    Right now it costs them about 83% of a car's selling price to manufacture it (Cost of Goods Sold). This does not include the money they are sinking into R&D, charging stations, etc. It is just the costs associated with buying materials and assembling the car.
    (Prior to being acquired by VW, Porsche's gross margins were reported in the upper 40's)

    I agree that the overall profitability of the company has a lot more factored into it. But gross margins are nevertheless important in valuing a company, because they are all you have after a company stops its capex-intensive expansions.

    But, as I point out earlier, those high margins are only there because Tesla is selling cars at a 10k (at least) premium due to the tax rebates.

  • NotAnotherSkippy||

    http://financials.morningstar......ture=en-us

    TSLA had an operating income of -$6MM. If you only want to look at GM then they had a GM of 96/562=17.1%. But, if you remove the $68MM they got in forced transfer payments for the ZEV credits but still give them the $7500 per vehicle they steal from you and me, then their GM was 28/494 = 5.6%. And again that's gross margin. Their net margin without the subsidies and transfer payments is negative. Big surprise there.

  • Weapon||

    Overt, first of all, only 1 state you get up to 15k with state and federal. then 1 state giving 13.5k(with federal). then 1 state giving 12.5k(with federal), then 1 state 11.5k(with federal), then 1 state giving 10k with federal. That makes only 5 states out of 50 that give 10-15k. Then 1 state giving 8.1k(with federal). The remaining 44 states give nothing and you only get 7.5k federal.

    Considering the sum of the incentive and the backlog, even without the federal incentives Tesla would not need to effect the price. Tesla even raised the price by 2.5k and it had no effect.

    As far as calculating costs, you have to factor in fuel costs and maintenance costs differences. As far as features such as adaptive cruise, lane keeping, park assist, they are coming in software update I hear. You also get some features the others don't have.

    If its so easy to do that with only a few 10s of thousands, who do I need to contribute to get that? Because in reality, if you want to get your way, you need to pay millions, not a few thousand. As I mentioned before, at best for a few thousand you can get an email.

  • Overt||

    "Overt, first of all, only 1 state you get up to 15k with state and federal. then 1 state giving 13.5k(with federal). then 1 state giving 12.5k(with federal), then 1 state 11.5k(with federal), then 1 state giving 10k with federal. That makes only 5 states out of 50 that give 10-15k. Then 1 state giving 8.1k(with federal). The remaining 44 states give nothing and you only get 7.5k federal."

    Yeah and guess where the majority of sales are? It isn't in those other 44 states. That alone should tell you the value of those extra dollars.

    "Tesla even raised the price by 2.5k and it had no effect."

    Man, on your next googling for "facts" spend some time reading about supply and demand. Read about what happens when a supplier cannot meet current demand at a given price. They increase their price. But that price cannot be supported once their production increases. see? it's easy.

  • Sevo||

    "Sevo- while they may get supplemental money from carbon trading, they also make significant money from sale of their Tesla sedan."

    No, they don't. They may be claiming a ridiculous margin, but they are recovering costs.
    See: "Take away the revenue sources that are a byproduct of Model S sales--both enabled by legislation, as a testy OpEd in the Wall Street Journal points out--and the financial adjustments, and the company lost $91 million on building and selling its cars"
    http://www.csmonitor.com/Busin.....ctric-cars

  • Overt||

    Check the records. Elon Musk gave over $100,000 to the obama campaign in 2012. His company SpaceX has a nearly billion dollar contract with NASA and his car company got nearly half a bill' in loans from the government.

    I have a lot of friends in the VC sector, and you should be outraged by what happened to the Tech Sector in 2008. All these VC funds who had once been investing in companies that would disrupt and create wealth are now dumping money into sure bets like solar companies and Electric vehicles- because they know the gubmint will bail them out

  • Weapon||

    Looking at Musk's record for 2012, I see that he gave 35k to obama. But that is 2012, as the loan program was made in 2007 and funded in 2010 I don't think that money had any influence on that part. Not to mention Tesla did pay back the loan in 1 year with interest.

    As far as Space X goes, here is the question, can anyone other then Space X send supplies to space yet? To add to it Space X is doing it cheaper then any other country. So its not exactly a bad deal here.

    As far as solar and EVs go, has the government ever bailed out a solar or EV company? Considering bankruptcy of Solyndra, Fisker, A123, BP and the likes, I wouldn't call those "sure bets".

    The reason why Tesla is doing so well is because unlike the companies I mentioned above, Tesla actually has some really nice technology. So while every other EV manufacturer is creating compliance golf carts, Tesla is trying to make the best car in the world. And best of all, while many others are trying to export jobs to china, they are making jobs here in the US.

  • Overt||

    Man you are shilling for this guy. Funny how your first argument (Tesla doesn't engage in political influence buying) suddenly changed to "Well yeah, maybe Musk does it but it is either immaterial or necessary".

    Suffice it to say, you don't know what you are talking about. Musk has been giving tens of thousands of dollars to influential candidates, legislators and executives FOR YEARS.
    http://www.campaignmoney.com/p.....p?cycle=06

    And that's just money to election campaigns. He also has a long history donating to various PACs and other such firms.

    If your argument is that Musk/Tesla are just doing what everyone else does, then FINE, but don't say they aren't active participants in this fucked up system. Your attempts to google for rebuttal points can't change that reality.

  • Weapon||

    To be fair, current US law sees corporations as entities. So my statement has not change and is still factually correct.

    If I were to guess, most of the contributions were to speak to politicians about SpaceX. The sums are so tiny they would be irrelevant to influencing any politician financially

    But for the sake of arguments lets look over the stuff Tesla benefited from

    ATVM loan was under the Energy Independence and Security Act of 2007, written by Nick Rahall.(He is not one of the people who received any campaign money)

    Now lets look at who he contributed and how they voted:
    Feinstein - voted for
    Stabenow - voted against
    Vote was 65 - 27.

    I am not saying that Musk does not participate in the crony system like everyone else. I am making the following points:

    1-Tesla has nothing to gain from the government, most of these laws were passed without him participating. That said, now that the dealers are doing what they are doing, Tesla might have to lobby

    2-I mentioned above that he lobbied and contributed for spacex. So again I am not denying that anywhere. But in that sector, lobbying and contributing is the only way

    With all that said, look at the sums he contributed. Do you honestly think those tiny sums is enough to influence a politician at federal level? The best you can do with that kind of money is send them an email and see if they are interested. If you took all the money he contributed over all time, its not enough to fund 1/10th of 1 senator's campaign

  • Sevo||

    "1-Tesla has nothing to gain from the government, most of these laws were passed without him participating. That said, now that the dealers are doing what they are doing, Tesla might have to lobby"

    So you're both an idiot and a sleazy liar?!
    Go away.

  • Weapon||

    "So you're both an idiot and a sleazy liar?! Go away."

    Pretty sure these boards are public to the extent of the ToS of this site. Not your house. If you don't want to see me here, you will have to be the one to go away.

    With that said, how am I lying exactly?

  • Sevo||

    "With that said, how am I lying exactly?"

    Asshole, where are you NOY lying?
    Go away.

  • Weapon||

    Sevo, I have not lied in this conversation once(to my knowledge).

    And again with the foul language, sigh.

    If you have a point to make it, make it.Just because you have no retort does not mean you have to stoop yourself down to that level.

  • Sevo||

    Weapon,
    You are either an idiot or a liar.
    Go away

  • Overt||

    "To be fair, current US law sees corporations as entities. So my statement has not change and is still factually correct."

    Do you really think people are reading these pedantic equivocations and saying, "Oh if you put it that way, Weapon was right all along."? Statements like the quote above are face-saving distractions. nothing more.

    Oh it's also wrong.
    http://nlpc.org/stories/2012/0.....es-schemes

    "Similarly, Musk’s Tesla Motors spent $480,000 from 2007 to 2011 to lobby Congress, the White House, EPA and DOE on climate and energy issues."

    "1-Tesla has nothing to gain from the government, most of these laws were passed without him participating."

    Horsecrap. Laws aside (which Tesla did lobby for), decisions about loans and decisions to continue proposing/passing subsidies for rich folk to buy cars are all dependent on the executive and legislative branches that Musk/Tesla is pumping money into.

    "With all that said, look at the sums he contributed. Do you honestly think those tiny sums is enough to influence a politician at federal level?"

    You simply don't know what you are talking about, Weapon. For every dollar directly contributed to a candidate, there are 100's donated to "special interests groups" and brought in through bundling.

    If you, having been wrong and forced to backpeddle on your every claim so far, you continue along this line, then I suppose you are too far deluded for further discussion.

  • Sevo||

    You bet Tesla is introducing all sorts of new business models!

    "What the EV startup did make its money from, is selling its zero-emission vehicle credits, a by-product (and legitimate part) of its main business. In doing so Tesla made $68 million from these credits, as well as a further $17 million from selling Greenhouse Gas emission credits."
    http://theenergycollective.com.....g-its-cars

    This is not an automobile company, it's a company whose product is tradding governmen rents,

  • Weapon||

    Keep in mind, Tesla is a startup. Obviously its not going to become profitable selling cars in 1-2 quarters. They are taking advantage of all things that are available to them. Its not like they are the ones who created the program.

    Tesla will be profitable selling automobiles by end of this year.

  • Sevo||

    Bulllllllllllllllllllllllllllllllll
    Shit.
    I noticed you sort of side-stepped your question about 'crony' above.
    Tesla is nothing BUT a crony operation; there would be no company absent that.

  • Weapon||

    Are you saying you can create a new successful car manufacturer in america and be profitable in the first 2 quarters of production selling cars?

    (Considering there has't been one in 50 years.)

    And explain how I sidestepped my question about crony capitalism?

  • Overt||

    Very few people expect a new company to be instantly profitable. That is why investors have multi-year investment horizons.

    Mr Musk has spent considerable money electing candidates who create laws that line his pockets with money.

    I visit Silicon Valley for work all the time, and it is simply mind boggling how all these liberal well-to-do people congratulate themselves on being soooo progressive when they use tax payer money to buy themselves a luxury automobile.

    "Only free-range, organic baby-seal fur for my coats. I'm socially responsible." puke.

  • Weapon||

    Laws such as? The point is most of the laws that are helping Tesla make money predate his political contributions.

    Most of the contributions seem to be stemming from Space X rather then Tesla. For Space X, it is 100% impossible to do business without getting support from government members. You can't legally even launch a rocket without NASA's approval after all.

    I agree that silicon valley is filled with a lot of junk. But just because it is filled with a lot of bad, does not mean there aren't exceptions to the rule.

  • Overt||

    No you are wrong. Tesla has been pouring money into CA and National politics since at least 2004 according to political trackers. In 2007- prior to his bailout at Tesla, he was supporting Barbara Boxer and others.

    In addition to his profit from NASA contracts and US Subsidies for Luxury Cars, he also is the principle investor in SolarCity, which benefits immensely (installing solar panels) from government tax rebates and subsidies.

    At the least he is a pathological rent-seeker, basing his business plans on the promise of government money. I believe his long history of financial contributions to these same politicians make him a chronie. but I suppose YMMV

  • Weapon||

    Overt, the latest money given to Barbara Boxer was in 2d half of 2007, the EISA was passed in first half of 2007. Most of the donations of 2004 and overall were on behalf of SpaceX.

    As far as making money of NASA contracts, you do realize he is making it exponentially cheaper then anyone else in the world? So technically, SpaceX is saving government money. On top of that, there is 0 way to get into space without approval from NASA.

    Is he being opportunistic? Yes. But considering how little he donates at best he is getting to talk to them with an email.

    The only law that he had any influence on so far was a law to let Tesla sell their cars in Texas. And that bill never even got voted on(due to much bigger lobbies on other side).

  • Sevo||

    Look, asshole, your apologia is convincing no one.
    You're an idiot with some sort of fixation in puffing a sleazy crony-capitalist 'company'
    I don't know what it is and really don't care, but you may as well quit proving your stupidity on a public board.
    Go away.

  • Weapon||

    Sevo, I am not trying to convince you of anything. You can believe that pigs grow on trees, that is fine, its your life. But it does not change the fact that your statements lack any factual bases.

  • Sevo||

    Weapon,
    You're a lying asshole.
    Go away

  • Sevo||

    Weapon| 6.20.13 @ 3:35PM |#
    "Are you saying you can create a new successful car manufacturer in america and be profitable in the first 2 quarters of production selling cars?"
    No, you idiot; learn to read! I can't and neither can that lick-spittle Musk.

    "And explain how I sidestepped my question about crony capitalism?"
    Fine. You asked "And when has Tesla done anything crony?"
    And I listed how Tesla exists solely on the basis of trading government rents.
    Do you have an inkling of what 'crony capitalism' means? How stupid are you?

  • Weapon||

    "No, you idiot; learn to read! I can't and neither can that lick-spittle Musk."

    I am glad both of us are mature enough to hold a conversation without resulting to insults. But right, no one can do it in 2 quarters, but Musk can do it in 4-5 quarters.

    "Fine. You asked "And when has Tesla done anything crony?"
    And I listed how Tesla exists solely on the basis of trading government rents.
    Do you have an inkling of what 'crony capitalism' means? How stupid are you?"

    That is incorrect, Tesla's existence has nothing to do with it being profitable or not in the short term.

    That said, I do not see anything that falls under "crony capitalism". But people's definition varies. So you would have to provide your personal definition of the term.

  • Sevo||

    "That said, I do not see anything that falls under "crony capitalism". But people's definition varies."
    No, it doesn't, You are an idiot.

  • Weapon||

    "No, it doesn't, You are an idiot."

    Yes it does, your using a pretty liberal definition of the phrase so I am asking for exactly how you would define it.

    And again,can we stop with the childish insults?

  • Sevo||

    "And again,can we stop with the childish insults?"

    Can we stop with the lefty habit of redefining words?
    The company makes money only because of government rents and the CEO is a major contributor to politicians.
    There may be other examples of crony-capitalism, but that is about as direct as you're going to find.
    The rest of your comments are nothing other than opinions stated as projections; if you'd like an adult conversation, act like one.

  • Weapon||

    "Can we stop with the lefty habit of redefining words?"

    So why are you redefining words then? I have on numerous occasion asked you to provide your personal definition of phrases and you could not.

    "The company makes money only because of government rents and the CEO is a major contributor to politicians"

    The amount Tesla and the CEO spent on contributing to politics is almost insignificant. Most of the contributions were on behalf of SpaceX.

    "The rest of your comments are nothing other than opinions stated as projections; if you'd like an adult conversation, act like one."

    They are official SEC filing statements from Tesla. So far I would actually like some facts from you instead of made up accusations with 0 evidence. I mean I am assuming you went through Tesla's financial reports personally since your acting like you know something right?

  • Sevo||

    Asshole, your sophistry is cute and sleazy.
    Go away.

  • AdamJ||

    Goddamn you two are tiring

  • Sevo||

    Here's a mouse; click your way elsewhere.

  • ||

    Chapman better not let John K. Ross know he's stomping on his turf.

  • Mark22||

    I think the auto franchising laws are stupid. However, how hard can it be for a car company to set up "independent" dealerships? And Tesla itself has been feeding so much at the government trough that it is hard to muster much enthusiasm for it.

  • Weapon||

    You can't. Most states have laws that make it illegal for automobile manufacturers to own a dealership. Tesla has an "independent" dealership in Massachusetts and the dealers are working hard to take their license away.

  • Mark22||

    Why do you restate the obvious? The dealership in Massachusetts is owned by Tesla, so by definition, it is not independent.

    What Tesla can do is find people and help them with loans, legal support, real estate leases, materials, consulting etc. to set up an independent dealership. That is, someone else actually owns the dealership. I don't think that's significantly more expensive for Tesla, and it should meet all the legal requirements.

  • Agammamon||

    Anyway, considering how much a fething Tesla cost, the people who want one won't find it much of an imposition to travel to the next state over to purchase one.

  • Weapon||

    While this may be true, why should this be the case? What next, they then have to pick up amazon orders in the next state too?

    You do realize also this is more then just not being able to purchase. They are also not allowed to tell you the price or tell you what website to go to. They also can't answer customer questions.

  • Sevo||

    Are you worried there won't be a bigger fool for your stock?
    You've got apologies by the ton, and crocodile tears for poor little Tesla, but little else.

  • Weapon||

    I don't have any stock in Tesla actually.

    What apologize are you talking about? and there is nothing to cry over.

  • Robert||

    So Texas is one of 96% of states with this arrangement? That's a long way to justify a headline!

  • Rigoberto||

    If I recall correctly, Porsche tried Tesla's direct approach some years ago and gave up.

    I have a pretty good practical understanding of the retail automobile business, and I would say that, underneath the support for youth sports and community programs, new car franchise owners are as crooked, venal, and devious as any ghetto pawnbroker.

    Mostly well-barbered, manicured, and fitted with the finest in haberdashery, they consider themselves upstanding members of their churches and communities.

    Not so.

    Lackwits and minority customers are really put through the ringer--no quarter given.

    If car dealers didn't give so much money to politicians, they'd be tarred and feathered and run out of town on a rail.

    Direct selling must be given a chance. It will give consumers a fair break.

  • Sevo||

    "Direct selling must be given a chance. It will give consumers a fair break."
    disregarding that Tesla really sells cars as a sideline, why do you think they could do better than Porsche?

  • Bgoptmst||

    http://obriengreene.com/2013/0.....la-motors/

    Take this for what is worth (to you). There is a decent explanation of the emission credits that have helped "profit ability." I addition, there is also a discussion on how investors betting Tesla would fail actually spurred growth when they were forced to pay for their options.

  • Anders||

    This is some crazy ass Austin crap.

    Texas gets most things right, but Austin is 20 square miles of straight up communists (and that is being kind).

  • HaydenGalloway||

    It could be argued that since Telsa received billions in grants and special treatment from the federal government, they were cheating and should be penalized by Texas. Otherwise it would be unfair to other car companies who cannot compete fairly in the free market with a company the federal government is helping. Basically this is a form of canceling out crony capitalism. Tell me if you agree..

  • Jony||

    Auto parts, wholesale market in China, http://www.autothere.com

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