On Bailouts and Sports Cars (response to NYT hatchet job on Tesla)

[n2doc]

Jason McCabe Calacanis
Posted November 30, 2008 | 06:36 PM (EST)

Today, Randall Stross takes apart Tesla Motors' request for a $400m government loan in an illogical, factually incorrect editorial that screams of a "Kill The Affluent!" ethos that spreads every time the market crashes. Putting aside the issue of bailouts--which many of you know I'm against--let's look at Stross' reasoning.

According to Stross, Tesla shouldn't get a *loan* because:

1. According to the title: "Only the Rich Can Afford It."

2. Battery pack life isn't moving fast enough: "But 8 percent, compounded, would bring too few benefits, too late to Tesla: it would take nine years to halve the price of its battery pack."

3. Randy says there is no upside to the loan: "Can you conceive any way that federal dollars could be put at greater risk -- and for no equity in return, keep in mind -- to benefit fewer people?"

4. Stross says the Tesla isn't ready for prime time: "its all-electric technology remains woefully immature and don't-even-ask expensive" and "The Roadster is not much more than a functioning concept car that sells for $109,000."

These points are all, well, somewhere between short-sighted and outright false, leading me to think that Randy's big problem with a *loan* to Tesla is that he needs to write a piece that appeals to the short-term sentiment of the country right now ("damn the billionaires!") rather than one that pursues the actual truth. Car technology needs to advance, and the best place for that to happen in in Silicon Valley. If the government is going to give loans to any car companies, it should be the ones that have the best chance of successfully innovating, not the losers who haven't competed for decades.

So, let's take a moment to fisk* Randy's story:

more:
http://www.huffingtonpost.com/jason-mccabe-calacanis/on-bailouts-and-sports-ca_b_147261.html

Good stuff. I read the NYT article and was appalled by it.

[shoeshock]

1. the fed and the treasury

hey, they print it, so they can spend it....

if you could print money like that, would you not throw a couple of billion here
and a couple of billion there...


you are poor, live with it !

[HillbillyBob]

3. I hope that was :sarcasm:

The tesla actually represents forward looking tech. Like anything that is a new route it is going to be expensive at first. The more it is made the better the price gets.
Look at flat screens, I recall when they first came out LCD tvs were like 7,000$ for a moderate size, I have wanted one and yea I am poor, but I have other things going for me.
I have been watching the prices on them fall. Tiger Direct had a 52 sony bravia for about 1500, when they were several thousand a couple years ago.
It appears that Tesla manu is looking at how to get a better charge /longer range battery and very impressive performance rivaling some of the best IC gasoline performance.
on edit.
I would rather see Tesla get a big loan to make more moderately priced cars than give to GM/Ford/Chrysler who have been making the same thing over and over when they knew at the first energy crisis that oil will not last for ever.
In fact in the late 50s early 60s one of their own geologists told them that we would reach peak oil in the 70s, if I recall correctly.
I loved having a big car that would go fast and lots of power. I had 2 Pontiacs that were very
impressive size wise with 455/4bbl, but I went to a VW 412 sedan, it did not have the raw power but got 34mpg and would go as fast as the BombDeVille and the Gran Prix I had, took about 90seconds longer to get to 145, but sure handled better.

[comtec]

2. We need to op-ed the HELL out of the NYT

Scum!

The Tesla is a great concept car, and their designs on AFFORDABLE electrics with REAL-WORLD ranges is great!
The fact that this new technology will be HATCHETED like the EV-1 was by GM is a disgrace!

An AMERICAN car company has innovated from the ground up and HAS THE FACILITIES to get bigger with LESS cost than re-tooling GM!

Oh well, so much for moving forward.

[phantom power]

4. Would they use that $400M to build an affordable version of their car?

Because if their plan is to keep building $80K sportscars, I wouldn't bail them out either.

[n2doc]

5. That is what the article said. n/t