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Tesla Was Cash Flow Positive Last Week, CEO Musk Says

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Re: Tesla Was Cash Flow Positive Last Week, CEO Musk Says

#151

Post by vidarh »

temphn wrote: post #113
Jach wrote: post #108

Earlier quoted context omitted.

I've heard two lines of reasoning used to justify those and similar expenses: 1. The government, which can be considered as a sovereign corporation, has a moral obligation to run at a loss because certain ventures are "inherently unprofitable" 2. If Tesla is a big success, the tax revenues from the increased capital in the market (directly from Tesla itself but also all the things it influences) will pay for the loss…

Well, so, I'm an empiricist on this. Absolutely one can point to companies like Tesla (or defense contractors in an earlier time) which received a ton of government money and by any objective measure did push technology forward. But one can also point to companies like Google which received only $25M in venture funding and certainly went on to create ridiculous amounts of wealth by any measure. And I believe this is…

Your Easter Bloc examples are a pretty good case against planned economies under oppressive dictatorial regimes, not against government grants to provide incentives for the market to move in certain directions.

> Then it's not a fair fight anymore

That's missing the point. Government interventions of the type in this thread are aimed at providing a fighting chance for the guy that doesn't have the money for a gym or a trainer, to see if his unorthodox ideas of how to fight will actually prove to be worth anything.

There might very well be arguments against these types of interventions, but it will have to be a different argument than against what we usually consider bailouts.

Bailouts for failed businesses employing well established existing technology is an entirely different beast.

Re: Tesla Was Cash Flow Positive Last Week, CEO Musk Says

#152

Post by mpyne »

to3m wrote: post #145
toddmorey wrote: post #117

Earlier quoted context omitted.

Totally disagree. While not at gasoline car levels, Tesla has certainly passed the 'toy' mark in range. What's the range on a 5 series tank? 500 miles or so? 300 miles is more than enough to cover my daily needs at least. I imagine it is for most people, unless you fill up more than once every two days.

I suspect the issue is as much the comparative inconvenience of refilling as the actual range. In fact, 300 miles sounds perfectly adequate. Many cars won't go much further before they need more fuel. But if refilling involved more than spending 5 minutes at a petrol station (of which there are plenty, everywhere) it might start to sound a bit less reasonable...

But on the other hand, I don't have a gas station at my house... I could have a charging station though.

Re: Tesla Was Cash Flow Positive Last Week, CEO Musk Says

#153

Post by nathan_long »

king_magic wrote: post #74
nathan_long wrote: post #65

Earlier quoted context omitted.

Define "highest quality". I'd say "of most utility to the largest number of people." By that metric, the market picks the highest quality of winner pretty much by definition. Exceptions I can think of are cases where individuals don't have enough info to decide (eg, a product will cause cancer, but the company can get rich before consumers find out) and Tragedy of the Commons issues (eg, every individual has incentiv…

> By that metric, the market picks the highest quality of winner pretty much by definition. I dunno, Windows and Internet Explorer has been the "winner" for the past few decades ;-) By the metric you mention ("of most utility to the largest number of people."), yes, they are "high quality". By many other metrics, they are not the highest quality products. Jokes aside, I absolutely want the market involved as well. I…

>> I think the market is fairly efficient, but it has it's downsides (e.g., the great patent wars - I'd hardly call that market efficiency).

I agree, but since patents are government-granted monopolies, that's really an example of government intervention rather than market freedom

>> I don't think the government has all the answers - but I don't think the market does either.

Agreed. By itself, the market can be ruthless. One proper role of government, in my view, is to ensure fair play.

Another is to provide incentives, when necessary, for research and infrastructure needed by society at large. ARPANET is a good example: a government initiative carried out by private contractors which never would have been undertaken by entrepeneurs.

Re: Tesla Was Cash Flow Positive Last Week, CEO Musk Says

#154

Post by nathan_long »

king_magic wrote: post #74
nathan_long wrote: post #65

Earlier quoted context omitted.

Define "highest quality". I'd say "of most utility to the largest number of people." By that metric, the market picks the highest quality of winner pretty much by definition. Exceptions I can think of are cases where individuals don't have enough info to decide (eg, a product will cause cancer, but the company can get rich before consumers find out) and Tragedy of the Commons issues (eg, every individual has incentiv…

> By that metric, the market picks the highest quality of winner pretty much by definition. I dunno, Windows and Internet Explorer has been the "winner" for the past few decades ;-) By the metric you mention ("of most utility to the largest number of people."), yes, they are "high quality". By many other metrics, they are not the highest quality products. Jokes aside, I absolutely want the market involved as well. I…

BTW, Windows has been the market winner for good reason: more usable and universal than Linux, and cheaper than Mac. It's not my favorite, but there you go. IE has ridden Windows' coattails; few Mac users and no Linux users have ever used it.

Re: Tesla Was Cash Flow Positive Last Week, CEO Musk Says

#155

Post by mpyne »

temphn wrote: post #87
stephenhuey wrote: post #5

Great news! Here's hoping they're able to place superchargers across the country within a year as planned. As much as one part of me wants to see Elon Musk succeed just to prove Romney wrong for calling Tesla a loser, it's more important to see Tesla do well for the benefits we may reap from companies like this trying to make better solutions and provide excellent competition to the status quo. That being said, I'm f…

I would argue it is possible to believe both that Tesla is a great company and that Romney was generally right in that many of the green investments have indeed been losers (Solyndra, A123, Beacon Power, Abound Solar, ...). Lest we forget, Romney is/was a pretty great investor and entrepreneur himself, just like Elon Musk. It's unfortunate that Romney included Tesla in his list of green losers - he did start this fig…

> The government is not just any old company or investor, the government has guns and can compel action in a way that others cannot. As such it is very powerful to have as a investor and very dangerous to have as a competitor. Too dangerous.

I get what you're saying but I really wish people would quit bandying about the "government has guns" line. I'm one of the zillions working in the USG and I can tell you that the left hand doesn't hardly even know what the left finger is doing most of the time, let alone the right hand (and this is often by design, to avoid exactly what you're talking about).

If you want to discuss hypotheticals of gov't gone astray then that's fine but then we could also discuss those hypothetical meteors that might hit your corporate HQ (hope you've been doing your disaster recovery planning).

Or we could quit acting like starting a business in the U.S. is really just like starting a business in a country run by a junta, or that investing in civilian-run businesses that further a societal and national goal is just like establishing a command economy.

Re: Tesla Was Cash Flow Positive Last Week, CEO Musk Says

#156

Post by lutze »

temp453463343 wrote: post #105
dave1619 wrote: post #86

Tesla Motors is in great shape. I've been following the company for a while and recently drove the Model S. Amazing car in almost every way. What struck me was that it's not an incremental improvement but really a radical (might I say disruptive) improvement in terms of ride quality (super quiet), handling (low center of gravity with skateboard powertrain), electronics (17" touchscreen), cargo space (heard of the fru…

I think it's a bit of a shame that they're playing the game on the same terms as the other car companies. You're absolutely right that each model seems to target a particular "class" of cars. I think a little more adventurous designs would have been great. For instance I think it would have been perfect if they made a Tesla land-yacht in the style of 70's cars. Big, heavy (lots of room for extra batteries), nice cush…

Isn't the point to promote electric cars as "normal" though? Anything too weird might put off potential adopters.

This is a good strategy IMO, getting rid of the engine is enough of a paradigm shift for now!

Re: Tesla Was Cash Flow Positive Last Week, CEO Musk Says

#157

Post by Gustomaximus »

temphn wrote: post #87
stephenhuey wrote: post #5

Great news! Here's hoping they're able to place superchargers across the country within a year as planned. As much as one part of me wants to see Elon Musk succeed just to prove Romney wrong for calling Tesla a loser, it's more important to see Tesla do well for the benefits we may reap from companies like this trying to make better solutions and provide excellent competition to the status quo. That being said, I'm f…

I would argue it is possible to believe both that Tesla is a great company and that Romney was generally right in that many of the green investments have indeed been losers (Solyndra, A123, Beacon Power, Abound Solar, ...). Lest we forget, Romney is/was a pretty great investor and entrepreneur himself, just like Elon Musk. It's unfortunate that Romney included Tesla in his list of green losers - he did start this fig…

In regard to loan value it is overly simple to only look at the value to government in getting loan repayment back. Think of the tax revenues they got from the employees, the industries built to support these companies etc. So even when Solyendra didnt pay back the loan the govt has probably seen a fair wack of money come back in other routes to offset the loan loss. And if Tesla succeeds they will see many billions flowing back in taxes from the company itself, employees and the industries that work with tesla. Much more than any amount loaned.

Re: Tesla Was Cash Flow Positive Last Week, CEO Musk Says

#158

Post by natural219 »

temphn wrote: post #113
Jach wrote: post #108

Earlier quoted context omitted.

I've heard two lines of reasoning used to justify those and similar expenses: 1. The government, which can be considered as a sovereign corporation, has a moral obligation to run at a loss because certain ventures are "inherently unprofitable" 2. If Tesla is a big success, the tax revenues from the increased capital in the market (directly from Tesla itself but also all the things it influences) will pay for the loss…

Well, so, I'm an empiricist on this. Absolutely one can point to companies like Tesla (or defense contractors in an earlier time) which received a ton of government money and by any objective measure did push technology forward. But one can also point to companies like Google which received only $25M in venture funding and certainly went on to create ridiculous amounts of wealth by any measure. And I believe this is…

Very nicely put. While I agree on almost all accounts, I think it's worth noting that while market forces are in general efficient allocations of capital, it may be possible to identify particular areas of research or technology that the market, for some reason or another, in not incentivized to pursue. The best historical example of this is the Manhattan project. Sure, given enough time, defense entrepreneurs would eventually research and develop the same technology, and maybe at a much lower cost. However, the time-value of obtaining the bomb first could arguably justify the enormous expenditure (something around $20 billion in today's dollars). Now, like I said, this is mostly playing devil's advocate -- as an economics student, I tend to agree with you for most investments. However, I do think that out of all potential investments, green energy has the best case for justifying spending these billions of dollars.

Put another way, if we could pay $50 billion to develop a renewable, clean energy source right now, then it would probably be worth it -- even if it would take Elon Musk only 10 years to do it and for $50 million.

Re: Tesla Was Cash Flow Positive Last Week, CEO Musk Says

#159

Post by paul »

yid wrote: post #88
dave1619 wrote: post #86

Tesla Motors is in great shape. I've been following the company for a while and recently drove the Model S. Amazing car in almost every way. What struck me was that it's not an incremental improvement but really a radical (might I say disruptive) improvement in terms of ride quality (super quiet), handling (low center of gravity with skateboard powertrain), electronics (17" touchscreen), cargo space (heard of the fru…

Great comment, thank you. I'd just like to add that the "frunk" isn't new -- I've been stashing my gym bag in my Porsche 911's frunk for years (it's a rear-engined car). Edit: While I absolutely live the Model S, I can assure you that exceeding stalwarts of the 5-series category, like the BMW M5, will not be as easy to disrupt as the market the Model S aims for.

I have an M5 and would definitely consider getting a Model S instead if I needed to replace my car.

Re: Tesla Was Cash Flow Positive Last Week, CEO Musk Says

#160

Post by vidarh »

dkokelley wrote: post #96
enraged_camel wrote: post #78

Earlier quoted context omitted.

Your argument is flawed and this can be demonstrated with countless examples. For example, it is difficult to have social order when your elderly and your poor are dying on the streets. This is why we have welfare and social security.

OK. Let's look at my argument. I posit that the core purpose of government is social order. I also imply that this is primarily provided through rule of law (police and legislatures) and sovereignty (military protection). You state that it is difficult to have social order without welfare and social security, because the poor and elderly would be dying on the streets. This example doesn't dispute my core argument tha…

This might be an interesting argument from the point of view of pure philosophy or ideology, but it is a pointless argument when discussing practical politics. It does not matter which is the primary means of providing social order.

It is particularly pointless because "being a government" is not an interesting measure outside of the realms of philosophy and ideology. There are very many governments that would have done the world a great service by ceasing to "be a government".

Personally, I'd argue that a government that provides no welfare are often a net negative - many of the early nation states saw enormous societal harm resulting from law enforcement and military being used as a bulwark against the effects of the lack of working welfare systems.

E.g. I'm from Norway. A large proportion of the Norwegian emigrants who settled in the US (like the Irish) came during periods of extreme poverty and often starvation in Norway (Norway didn't become wealthy really until oil finds in the 60's, and until at least the 20's it was really a quite poor country). Poor people could get forcibly put to work in poor-houses, as they were in many other countries. Yet the state at the time used the police to restrict emigration:

You needed permission, or you could get thrown in jail for trying to leave. It was seen as essential in order to provide social order. As it was in many other countries.

> Here is how I support my claim that police and military are the primary means of providing social order. Can our government exist without welfare? It has. Can it exist without the public school system?

Can it exist without government run police? Many governments have historically largely deferred policing to volunteers (UK for example, where volunteers still have a role in policing). Without military? There are examples of that too - the modern nation state with standing armies is a relatively new invention and prior to that at least some societies had what amounted to functioning governments without military or police - Iceland, for example, which had a functioning parliament and established laws and court system for hundreds of years before it got a government run police and military.

While the nature of a government that is not a monopoly provider of violence and force is by necessity very different, that does not mean they can not exist.

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