Skip to comments.Mitt Romney: Tesla Motors is a ‘Loser’
Posted on 10/04/2012 1:13:21 AM PDT by Cincinatus' Wife
Mitt Romney labelled electric carmaker Tesla Motors a loser during Wednesday nights U.S. presidential debate.
The Republican candidate took a jab at Tesla while discussing tax breaks to energy companies. He criticized U.S. President Barack Obama for providing $90 billion in breaks to the green energy world.
Now, I like green energy as well, but thats about 50 years worth of what oil and gas receives, Romney said. You put $90 billion like 50 years worth of breaks into solar and wind, to Solyndra and Fisker and Tesla and Ener1. I mean, I had a friend who said, you dont just pick the winners and losers; you pick the losers.
While Solyndra and Ener1 went bankrupt and Fisker is struggling financially, Tesla has shown signs of recovery.
The company is currently paying back $465 million in low-interest loans from the U.S. Department of Energy.
........Still, Tesla is not without its struggles. The carmaker cut its forecast for 2012 revenue due to a slower-than-expected rollout of the Model S, according to Reuters.
Musk commented in June about the impact that Romney would have on the electric car market if he wins Novembers presidential election.
Im not sure hes really against them [electric cars]. He may not be as for them as, say, President Obama is, he said. I think Romney would have a minor impact; I think President Obama would probably have a more positive impact.
(Excerpt) Read more at mashable.com ...
September 25, 2012: Tesla shares drop after cutting outlook [amends loan agreement with U.S.Energy Dept] ".........Already the company's largest shareholder, Musk may buy 33,311 more shares, the company said in the filing. Tesla, whose investors include Toyota Motor Corp. and Daimler AG, said it now expects to exceed its plan to produce 20,000 of the electric cars next year, when it projected it would earn its first profit.
The company amended its loan agreement with the U.S. Energy Department and may need to do so again if it fails to raise enough money from investors. Tesla plans to begin repaying its Energy Department loans in the fourth quarter.........."
September 26, 2012:...........The Model S is an all-new vehicle which we are producing with new employees using new equipment, the company says in a filing with the Security and Exchange Commission. As our main focus is on quality, we have methodically increased our Model S production at a rate slower than we had earlier anticipated.
........As of this week, Tesla has built 255 Model S cars, and has reached a weekly production rate of 77 vehicles, Jerry Hirsch reports in the Los Angeles Times. The company wants to produce cars at a rate of 400 a week. It hopes to build 20,000 cars in 2013. ...." - Clouds Gather Even As Tesla Garners Positive Reviews
October 3, 2012: An Update from Elon Musk - By Elon Musk, Chairman, Product Architect & CEO " Now that our financing round is complete, I would like to clear up some misconceptions that arose last week as a result of our filing a public market financial prospectus. SEC rules rightly limit interaction with the press during a financing round to prevent companies from promoting stock. Unfortunately, this made it difficult for me to respond properly when some journalists gained the wrong impression.
Public company financing documents are fundamentally about ensuring investors are informed about every possible risk, even those that are highly improbable, and one has to describe those risks using language that is discomforting at best. Consistent with those principles, we described a relatively pessimistic scenario for Tesla, which was incorrectly interpreted by some to be what we thought was the most likely scenario.
Most importantly, what did not come across well was that we raised the funds simply for risk reduction. Barring any disasters internally or with suppliers, Tesla is actually on the verge of becoming cash flow positive and will not have to spend any of the money raised, at least until we embark upon a major new vehicle program. In the public call with investors, I tried to make this point, but perhaps should have emphasized it more: we expect Tesla to become cash flow positive at the end of next month.
However, given that we do have a global supply chain and that floods, fires, hurricanes or earthquakes can cause supply chain interruptions and halt production, we thought it would make sense to raise capital to protect against such an event. In fact, an important consideration in doing this financing round was that we went through just such a crisis recently with a supplier that had a flood in their factory. This caused a shortfall in shipments and delayed production until we could find another solution................."
May 29, 2012 (Ricochet) Elon Musk Shows Us How to Thrive in the Government-Directed Economy ...."Those who know how to navigate an economy driven by the state will succeed. They do so regardless whether the market has determined their product as the best or notsometimes it has, sometimes it hasnt. Sometimes the consumer has no real ability, thanks to the aforementioned mix of laws and regulations, to go in another direction. Sometimes the only consumer is the government, meaning the appropriators, bureaucrats, and administrators who dream fondly of working some day for the contractor titans they fuel with other peoples money.".....
Sept 18, 2012 [PJ Tattler] - Elon Musk SpaceX Head Obama Bundler?
April 15, 2012 (National Legal and Policy Center): Taxpayers Subsidize Forbes 'Green' Billionaires' Schemes........Musk, best known as co-founder of the company that became PayPal, is Chairman of SolarCity and CEO of Tesla. According to the Center for Responsive Politics, SolarCity spent $535,000 in 2009 and 2010 to lobby Congress and the Department of Energy on climate legislation, the Recovery Act, green workforce training and development, and provisions in various legislation relevant to solar development. SolarCity has sought to extend a program, due to expire at the end of 2012, that delivers to manufacturers an upfront cash grant in lieu of a 30 percent Investment Tax Credit (called the Section 1603 grant program). So far, according to DOE reports, SolarCity has received more than $66 million from that program.
The company also won a partial guarantee from DOE of a $344 million loan that will place up to 160,000 rooftop solar installations on military housing across the country..........."
“...Tesla has even more questionable connections:
Tesla brings political pull, as well. A former Tesla board member, Steve Westly, is an Obama bundler who raised hundreds of thousands of dollars for the president in 2008 and for his 2012 re-election campaign. His Westly Group was also a financial supporter of Tesla Motors until Tesla went public in 2010, and Westly continues to back the company.
Teslas founder and CEO, Elon Musk, is a hearty political contributor who has primarily backed Democrats, including Obama. According to published reports, another Tesla investor is Nick Pritzker, a donor to Obama and a cousin of Penny Pritzker, the national finance chair of Obamas 2008 campaign....”
“’Now, I like green energy as well, but thats about 50 years worth of what oil and gas receives,’ Romney said.”
Hoo boy, that one’s gonna leave a mark! In one short statement, Romney put Obama under the microscope on the green energy issue, and deflated his issue about tax breaks for oil companies.
Tesla previously said it would begin repaying loan principal in December, as required under the lending agreement. Its repayment schedule for interest on the loan began in February, according to last weeks filing.
One amendment to the loan repayment terms was a reduction in the amount of funds Tesla was required to hold in a repayment fund, Musk said yesterday.
In discussions with the DOE, Tesla has never asked for or even hinted at postponing repayment of the loan, he said.
We did suggest that holding nine months worth of principal payments in advance in a reserved account was a bit extreme and, moreover, was never part of our original loan agreement, Musk said. The DOE agreed and reduced the advance payment reserve account to six months. Source
Musk is a master, as are many of those who made billions on the Internet Bubble, of misdirection. There have been, and are, many scams in the green business. Solyndra was a no-brainer. No one builds a semiconductor manufacturing plant in Fremont. The moment I saw it, knowing a fair amount abour solar electric conversion, and in the semiconductor business, I got the smell as well. A half million square feet of new building when Silicon Valley is becoming a ghost town is too obvious a fraud. The whole solar electric business is mostly a fraud. Too few understand how little recoverable and convertible energy their is in each square meter of incident sunlight - 5 to 10 watts after losses, considering that about six hours of each day's sunlight is useful, on clear days.
Tesla, which was to have moved into the enormous plant Toyota abandoned in Fremont, the NUMI plant, is also an obvious fraud. But the investors are being protected by Obama’s cabal, and will get out just before the whole thing collapses, which may be after November, if voter fraud doesn't offset the clear preference indicated by the first debate, or if Obama doesn't only give away cell phones, but promises everyone on government assistance a new Tesla, and a rebate to cover the enormous jump in electric utility bills.
I'm sure the CFO has his bankruptcy court documents ready, and that all the investors are well acquainted with the terms. After Tesla fails, formally, Musk will get his half million or so termination bonus as Solyndra’s bundler/CEO did, and the terms of the loan contracts will limit the damage to investors, or they wouldn't have invested. It is clever redistribution of wealth among the wealthy. Obama doesn't care; he's got Penny Pritzger buying him the 36 million dollar estate in Hawaii. Obama has shown himself to be a world-class con man, but the 'marks' are getting tired, and too poor to milk for much longer.
....and a cult of personality.
The MSM has been churning out one hyped "Elon Musk is a genius" glowing puff piece after another. Now they're beginning to look a bit closer, and though subtle, telegraphing caution to investors and buyers.
It’s an amazing economic strategy....pick up a loser company...make it look possible...put money with political figures...get them to give you government loans...prepare for default and bankruptcy....walk out the front door with five to ten million in your pocket. It’s amazing now that this is such a common practice.
Thanks for those details. I have great respect for people with new ideas and especially willingness to risk all their own money and put all their time and energy into a new business. But that’s mostly not what we are seeing. Normally the market sorts out the scammers, but now the government is backing them. My impression is that these “investments” are simply shenanigans by wealthy Californians who figured out how to get the government to assume most or all of the risk.
Very accurate and very well said!
All it needs is a “green” chicken roosting on the back of the empty Obama chair.
So, Clint was right. Big surprise.
It’s obvious that Elon Musk is about to sell Tesla Motors to Toyota, since Toyota could use the technology to develop more advanced plug-in hybrid electric vehicles (PHEV’s) and eventually long-range battery electric vehicles (BEV’s). Musk will now concentrate on SpaceX, which is a venture with a much higher financial payoff in the long run.
A vulture would also work. LOL.
Base Price: $58,570 - $106,570
...and that's all I've got to say about that.
Loser?! These are scams with a fancy, sexy, high end hook!
Those perpetrating them know full well exactly what they’re doing
“[Tesla] is currently paying back $465 million in low-interest loans from the U.S. Department of Energy”
But not from actual sales.
Don’t worry about it, though. GE will join the EPA (or some other Obama agency) and buy those overpriced Teslas.
Do you think there is enough there, politically or in IP (Intellectual property upon which patents are often filed) to justify a Toyota investment? Obama tried to twist Toyota's arm to keep NUMI around so its 2000 union employees wouldn't be laid off. Toyota wouldn't buckle, even after being threatened with tariffs on pickup trucks. The scam is clever, but produces nothing for the nation and nothing for real investors. Look what Obama did to Calpers' investors when he bought GM and divested millions of retired public employees of their investment in GM and gave ownership to the unions. Even the prime bond holders had their investments stolen. Investors in Solyndra and Tesla have government guarantees to minimize the risk that that private sector investors take all the time.
Toyota has been supporting battery research in a number of Universities, including UC Berkeley, for decades. My distant recollection is that Tesla was founded by a gadfly Stanford “green” professor, who likes sports cars. I knew some of those. Most of them weren't good enough to get the research grants awarded by private corporations.
The Tesla is a rather ordinary electric sports car with sexy bodywork that would drive around thirty miles if you drove it like it looked. One of the less obvious clues is when the always empty Tesla sales office is located across the El Camino from the very 'tony', Stanford Shopping Center, in one of the nation's wealthiest communities, Menlo Park, its parking lot filled with unsold automobiles. Musk had money to burn after 'cashing out'. Tesla is a toy for engineers who have figured how to play politics. Some engineers have a talent for selling half-baked ideas to naive business school guys, knowing they can "bail" long before commercially viable prototypes must be delivered. Tesla was perfect because it looks great, and few government people or cfo types have a clue about what is under that pretty skin. The government types have no responsibility to deliver anything, and will probably have a new boss in less than four years anyway.
There used to be body kits that an industrious DIY could put on a souped up Chevy. Tesla is a body kit on an a powerful electric motor with a lot of batteries in the trunk.
I wonder if Presidential Science Adviser John Holdren, Stanford grad, who has never done any science, but learned his game from Paul Ehrlich at Stanford, who wrote imbecilic books that were wrong on every prediction, but loved by bourgeois Marxists, drives a Tesla? He must have endorsed the Tesla and Solyndra investments, and may have a fiduciary interest in either or both start-ups. Tesla's founder has a position related to what Holdren held at Berkeley, but he builds things and did some engineering with a conservation theme. He must have a good block of founder's stock, and will do fine when reality catches up with Tesla. More power to him.
Ehrlich and Holdren preach zero population growth, global cooling, then global warming, and predicted world starvation by the 1980s, and draw awards and big speaking fees for preaching nonsense. Holdren, former Berkeley Energy and Environment professor, whose best writing was for Ramparts, now holds the Theresa Kerry chair at the Kennedy School at Harvard, when not advising Obama, and will return to Cape Cod after Obama takes the dive and moves to Hawaii on Penny Pritzger's dime. Some eyebrows might arch if a good Marxist is seen driving a car that looks like a Ferrari, even if it only goes thirty miles on a charge. These people are world-class polemicists and 'snow job' artists, who excuse their incompetence as real scientists and developers by preaching revolution.
If an idea has merit, we have developed a remarkable institution, venture capital, where successful former developers direct the savings of those willing and able to take the risk by funding the long range dreams embodied in 'start-ups'. If the ideas were good, the start-up is usually offered a buyout, which involves many risks to the buyer. Private investors take the risk, and have a strong incentive to realistically assess the competence of the developers, and usually, to hold them to milestones, since most start-ups come back for a second or third round of investment. Get the government out because its investments are almost always politically motivated, and the entrepreneurs in government are risking our money, without asking our opinions. That is what governments do, and why they must be constrained as our framers intended, and so specified in our Constitution.