NYT scribe: No bailout for Tesla-buying 'centimillionaires*'
'Moore's Law doesn't govern batteries' - well, duh
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A New York Times columnist has launched an attack on the idea of electrocar poster-child firm Tesla Motors receiving "bailout" federal loans, saying that the company's products are toys for the super-rich. Tesla says that the only reason it wants the government money is to finance the production of more affordable cars; the existing $100k Roadster supercar is expected to start turning a profit shortly without further investment.
Writing in his regular Digital Domain slot at the Gray Lady last Friday, history PhD and business prof Randy Stross had some harsh comments to make.
"Why should taxpayers fork over the capital that Tesla needs? The Roadster is not much more than a functioning concept car," he wrote.
The historian, who has written many books on Silicon Valley and inventors, believes that companies like Tesla rely on Moore's Law-style rapid improvements to their technology. But he has bad news for Tesla.
"Batteries are based on chemistry and have nothing to do with Moore’s Law," says the San Jose State University bizprof.
PayPal hecamillionaire Elon Musk, Tesla's main financial backer and helmsman, has only ever suggested a "weak Moore's Law" in terms of batteries. But Stross - quite the whiz with numbers - points out that Musk's hoped-for eight per cent annual improvement in Li-ion battery performance would take nine years to halve the price. Apparently Stross knows something Musk doesn't, because he states categorically that this will be "too late" for Tesla.
The biz svengali then goes on to speak approvingly of mainstream motor firms' plans to build plug-in hybrids, able to run on batteries for a short daily commute but with conventional engines included for greater range when required. (Tesla does, in fact, plan to offer "range-extended" motor-plus-battery options in its mass-market design, if it can get the finance to build it.)
Stross seems to approve of charging one's car up at the mains in some cases, however.
"For households that install their own power-generating solar panels, electric cars can rightfully claim to attain truly zero emissions today," he writes.
Let's have a think about that. One of Stross' favoured cars is the Mini E, which boasts a 35 kilowatt-hour (kWh) battery able to propel it 150 miles, according to makers BMW. A 40-mile commute should thus be a matter of just nine kWh. A "typical" 20 square metres of home solar panels might generate as much as four or five kWh each day, so you'd only need to leave your car hooked up for two days on average to achieve a single "truly zero-emission" commute.
If you had room for 40 square metres of panels (that's a very big house) it would only take one day, though you'd still need to go to work at night, or store the power at home in some (very efficient) way, or get into smart-grid 'leccy dealing or something.
Anyway. Tesla says that in fact it does not require any bailout for the Roadster supercar. Mr Musk says the firm will need no further money in order to become "cash flow positive" based on existing Roadster and powertrain sales.
What the company says it would like is money under the US Department of Energy's Advanced Technology Vehicle Manufacturing (ATVM) scheme, set up in September to encourage fuel-efficient cars. Tesla says it applied for ATVM loans last month, before the latest money-market convulsions, in order to set up a factory to build the planned Model S - which ordinary Americans might be able to afford, as opposed to Stross' Roadster-buying "billionaires and centimillionaires"*.
However, there are now plans by some in Washington to shift the ATVM tech-encouragement funds into a bailout plan for America's big-iron motor mammoth companies.
"Tesla Motors is applying for the Department of Energy loans in the truest spirit and intent of the program," says Tesla veep Diarmuid O'Connell. "The company does not endorse the diversion of the ATVM resources for a bailout of any kind."
But Stross of the NYT is having none of it. Tesla shouldn't get any "bailout", he says.
"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?" he asks.
Well, can we? ®
*Whoops. You probably mean hecamillionaire, Mr Stross. A centimillionaire would, of course, be unable to afford a $100k Roadster.
COMMENTS
EV1?
Probably more like OILLLLLL = Profits than cost, safety, etc. Why would they spend a fortune on developing something which would be in direct competition to 99.99999999% of their othre products which (at the time) was doing so well?
It's probably correct that they "used" the EV1 project in order to discredit the very idea of leccy cars. So people would rather buy their gas guzzlers. Notice how many "enlarged" GM models came out after EV1 was caned?
The EV1
Well, if the EV1 was so fabulous, and GM produced it...why aren't they now turning out more of them since they surely have all the technology still at hand? There had to be some big drawback to them to keep them off the market with the obvious demand for such a vehicle. Cost? Safety? Someone; out with it!
Corbin Motors?
Anyone remember those? They had a nice car called the Sparrow EV for around $13k somewhere around 2000. They had sold about 50 or so units by the time I found out about them, but sometime later the whole thing went bankrupt.
The actual vehicle looked funny, but it had an interesting concept: it was a one-person vehicle. The reasoning was that there are a zillion cars with only one person driving them, so it made sense to do a small one-person EV for these trips. Unfortunately, my student budget was too low to even afford one of these, and I'd bet that was the same case for the rest of us watching this exposition. Those with money prefer to spend their $$$ on stupid SUV's.
Tesla, however, seems to be running profitable, and might deserve a grant (NOT bailouts) to keep on their roadmap. They should show GM how to do the EV1 right. Hell, even Wagoner said that GM should've never killed the EV1!
However, I still have that matter of not having any outlets to power an EV. Oh well...
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