Tesla opposes using advanced vehicle fund for Detroit bailout
When the Detroit automakers went to Washington to press their case for financial assistance to get through their current cash crunch, the hope was to get $25 billion from the $700 billion fund that was set up to bail out Wall Street. The Bush administration was having none of that however, and by the time the CEOs headed home, the only idea that was getting any traction was to free up the money that had been set aside in the 2007 Energy Bill to fund development of more efficient cars. The Detroit 3 however, were not the only ones eyeing that pot of money. Tesla Motors is just one of groups applying for low interest loans from what is known as the Advanced Technology Vehicle Manufacturing Incentive Program (AVTM) fund. In a new post on the Tesla Motors blog, Vice President of Business Development Diarmuid O'Connell doesn't express an opinion one way or the other on whether Congress should help Detroit. However, he does make it clear that the Silicon Valley EV company doesn't believe the AVTM fund should be used as the source of the bailout. The same finance market issues that have put the Detroit companies in jeopardy have hurt Tesla's plans to raise cash to pay for new manufacturing facilities and development of new vehicles. Tesla needs a piece of that pie.
[Source: Tesla Motors]
Reader Comments (Page 1 of 1)
Jim 4:27PM (11/28/2008)
Tesla's existence does not effect the economy of the country. In the overall view of things Tesla is a small business. Besides any opinion from silicon valley is so biased against U.S. auto companies it makes the importance of what they have to say..............worthless.
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Max 11:26PM (11/28/2008)
Jim:
"any opinion from silicon valley is so biased against U.S. auto companies"
??
-> If you're part of the UAW I feel sorry for you.
dave b 5:03PM (11/28/2008)
I hate bailouts, but Jim, I agree. Tesla, instead of seekig help, just terminates its employees. Why not seek some assistance rather than firing your lifeblood?
Moreover, the smallcap size of its company is meaningless in the grand scheme.
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Red 6:52PM (11/28/2008)
So because a small company IS a small company they're irrelevant to the grand scheme? Interesting point of view, considering at one point, GM, Ford and Chrysler were all considered "small companies" at one point. Much like Apple, Microsoft...well...you get the idea. Sure, they're big companies now, but my point is, in regards to electric vehicles, we're likely to see an emergence of "small companies" because of the viability, relevance and accessibility of the concept on a somewhat wider scale. To suggest that Tesla, or any other start-up is any less important to the "grand scheme" is inaccurate. They may not employ hundreds of thousands of people, but growth at such a time as this, is massively important because many of the "large companies" are becoming less and less relevant to the grand scheme (look at how many have gone under in 2008 alone and double that for 2009).
That said, I personally find Elon Musk and arrogant jack@ss and don't think he deserves a dime...
Chris M 2:41AM (11/29/2008)
How do you know "they weren't seeking assistance"? Seems to me that they'd already applied for financing from the DOE, as well as raising funds from various venture capital funds, and are doing some lobbying in DC as well.
If "layoffs" is grounds for disqualifying any government backed loans, then the "Detroit 3" would surely be disqualified, as they have done far bigger layoffs than Tesla.
jake 5:53PM (11/28/2008)
They may be meaningless in terms of size but they do qualify for the AVTM fund and that will help them manufacture the Advanced Technology Vehicles that the Advanced Technology Vehicle Manufacturing Incentive Program was supposed to fund.
Right now the Detroit 3 wants to carve that out to help them keep afloat. I think any of the companies who are looking to recieve funds from that program has the right to complain no matter how small they are.
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why not the LS2LS7? 4:33PM (11/29/2008)
So what has Tesla changed, Sam?
Folks:
The Tesla has $35,000 worth of batteries in it. And don't say "it's a new technology, it'll drop quickly", because there are 1 billion LIon batteries sold each year in cell phones alone. If you count iPods, power tools and other doodads, you're probably talking over 2 billion. It isn't a new technology, it's already fallen down the initial price curve. Future price drops will be incremental, not drastic.
Blackbird Highway:
That's not my argument at all. That's your argument. And isn't it amazing how when you make up an argument you wish to call stupid, it comes off sounding like a stupid argument?
A Tesla isn't practical for most people, and it isn't going to be soon. Not Whitestar, nothing. Right now only lead-acid can make an affordable electric car, and those are still marginal on performance. And even if they weren't, those who don't own their own houses cannot install a charge to charge it anyway!
How about if Tesla wants to make new advanced vehicles, Musk diverts some of his money from making rocket ships?
And is isn't like Tesla isn't on the public teat anyway. They'll be receiving lots of my San Jose tax dollars to set up their new facilities.
BlackbirdHighway 9:06PM (11/28/2008)
Well, if it's a choice between giving the money to Tesla to develop advanced vehicle technology that will help us cure our oil addiction, or giving the money to GM so they can keep selling Hummers, I would favor Tesla.
Anyone want to bet that shortly after getting the money, GM cancels the Volt program? Right now the Volt serves a purpose, to reel in taxpayer dollars, but once that's done they will no longer need it.
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why not the LS2LS7? 12:07AM (11/29/2008)
When Tesla makes a car that matters to more than 1% of the population of the US, then they can say how they should get a piece of any pie.
Right now they make very high priced, few low practicality vehicles. We might as well say Saleen deserves a cut of the money.
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Chris M 2:53AM (11/29/2008)
By it's very nature "Advanced Technology Vehicles" are bound to be more expensive than the standard everyday vehicles, at least at first. But the knowledge learned by those first high priced models will help to develop lower cost vehicles, and eventually make that advanced technology cost competitive to or even cheaper than the old standard.
Indeed, that is the Tesla plan - Start with a high performing high price high profit margin sports car, then use the knowledge gained from that to produce a less expensive model, then cut costs further for the next model, working the price downward.
BlackbirdHighway 8:08AM (11/29/2008)
The first cell phones cost about $1500, and they sold very poorly, only to wealthy folks.
We certainly should have done everything we could to prevent those "very high priced, few low practicality" products from continuing in the marketplace. We should have given massive, free taxpayer money to the old line phone companies who wanted to keep making land line phones, and drive those upstarts right out of business.
That's your argument, and it doesn't make a bit of sense.
Richard 11:41AM (11/29/2008)
Tesla is seeking funds for development of new, lower cost models. It's doing fine with the roadster as only deposits have been received from the sales of the roadsters. When cars are delivered, final payments are due. So Tesla is in great shape as soon as delivery of cars is ramped up. GM on the other hand has a history of promising cars and then changing the specs. Look at the original design of the Volt. It was bold and beautiful. Now it is mundane and looks like the cruze, to which they are using as test mules. Tesla deserves at least part of the funding as they already had a newer electric model in the design stage. A greater achievement than GM can produce with it's endless resources at its disposal. GM deserves to go down and then restructure with less costly methods of management. UAW needs to die!
Sam Abuelsamid 12:16PM (11/29/2008)
That's right, Tesla hasn't changed anything since the Roadster was announced.