From the article: “About a decade ago, Tesla rigged the dashboard readouts in its electric cars to provide “rosy” projections of how far owners can drive before needing to recharge, a source told Reuters. The automaker last year became so inundated with driving-range complaints that it created a special team to cancel owners’ service appointments.”
All I am saying is that he built Tesla and SpaceX with government (taxpayer) money.
And that’s a bad thing? Isn’t the entire purpose of that government money to spur development? Seems like it is working as intended then?
There’s no shortage of reasons to hate Elon, but using government subsidies for their intended purpose seems like a strange one.
Yes it’s bad. Competing for market share should be balanced and free of government intervention. How does a company (small or large) hope to compete against a company that is being subsidised.
Tesla can then undercut their competitors as they don’t need to make a profit. They’re subsidiesed.
Then the government has also imposed regulations for car manufacturers, that if they don’t sell enough EVs in the year, they have to pay a penalty by buying carbon credits.
Well Tesla sells those carbon credits. So they can undercut their competition, entice consumers with lower prices and recoup the losses through subsidies and selling these credits. All thanks to government intervention.
Basically screwing competition and screwing you. As these have knock on effects.
Those other companies can qualify for the same subsidies. Sometimes it’s a first mover advantage (subsidies change over time), and sometimes it’s not. But AFAIK, Tesla and SpaceX don’t get any subsidies that other companies couldn’t qualify for. Maybe there are some that foreign companies can’t get, but that’s not unique to the US (see AirBus vs Boeing).
That said, I’m generally against subsidies. For example, I think the EV subsidies have essentially just changed into additional profit margin. Look at what happened to Tesla Model Y prices when subsidies changed, it basically dropped by the amount of the subsidy reduction. If we removed EV rebates today, I think car companies would drop prices by about that much, which means those rebates are essentially pure profit. I don’t think that’s the case for SpaceX though, but I don’t know enough about that industry to know for sure.
Thanks for saying what I was trying to say.
I would probably say that was their purpose from the beginning. Companies aren’t going to do something unless there is profit to be made. The subsidies exist to create that profit.
Now you could say that manufacturers are charging more and the customers are paying more because they know part of the cost will be reimbursed with the subsidies. But that doesn’t seem sustainable for long, because all it take is one manufacturer to start dropping prices to attract customers. Then everyone would drop prices to match. We weren’t really seeing that previously because everything was supply constrained. But now we seem to be seeing that happen with Tesla at least, they’ve been dropping prices in the USA recently.
Why would they? The only reason Tesla dropped prices is because the government capped the subsidy based on sale price, so Tesla dropped just enough to qualify for the subsidy.
We shouldn’t be subsidizing these at all for precisely the reason you stated: we’re largely supply constrained. The EVs that don’t sell well are super unattractive (e.g. Chevy EVs are priced right but have had a ton of recalls, Nissan Leafs didn’t have nearly enough range, etc).
What we should be doing instead is jacking up the cost of fossil fuels based on CO2 load, and do that for imported goods as well (estimate a CO2 load for all products and tax accordingly). It would have a similar effect of making EVs more attractive, but it would hit consumers directly instead of indirectly through an unrelated tax burden. I propose that these tax revenues be paid back to the population in the form of a “stimulus” check with no restrictions as a form of reparation for producing CO2 (or maybe we use it to fix Social Security in the short term). As people move to greener products, the “stimulus” would naturally go down.
But no, we did it in the least productive way possible. Instead of discouraging use of fossil fuels, we’re rewarding companies for increasing profit margins.