Tesla Goes Begging for Federal Funds
As you know, I have a love / hate relationship with the Tesla electronic roadster. So, I snorted my coffee a little when I read an article in Sunday’s New York Times by Randall Stross, “Only the Rich Can Afford It. Should Taxpayers Back It?” (Not providing a link because you have to have a free NYT user account to read content there, but I do highly recommend the piece.)
Stross comes right out and calls Tesla’s technology “woefully immature” and describes the pricetag as “don’t-even-ask expensive.” (That would be $109,000 for the Roadster.) So, here’s the deal. The company has applied for a $400 million low-interest federal loan under the Congressional loan package passed last year. ($25 billion for the development of fuel-efficient technologies.)
Stross asks a good question. Should those funds be used for the “2008 Bailout of Very, Very High-Net-Worth Individuals Who Invested in Tesla Motors Act?” Tesla has eaten through $145 million in capital already and has $40 million lined up from private investors to keep going. However, Tesla says without the federal funds, it can’t move forward on a less-expensive, second generation, five-seat model or work on necessary improvements to the vehicle’s lithium-ion batteries.
As the article points out, Tesla is talking as if such things as major advancements in battery technology happen quickly. They don’t. It could be ten years before the existing 1000-pound battery pack is down to a more respectable 500 lbs. And the competition is coming on strong with less expensive vehicles like the all-electric Mini E or the much-anticipated Chevy Volt with comparable performance. Then there’s the fact that Tesla’s production schedule is less than impressive. They claim to be assembling 15 cars a week, but to date, they’ve delivered only 80 roadsters mainly to billionaire customers in Silicon Valley.
With the American automotive industry — in particular GM — poised on the brink of collapse, and with all that portends for the American workforce and consumer, I’d say let Tesla continue to hold its paw out to its wealthy patrons and use taxpayer money for more substantive purposes.