[shasheene]

The Economist recently did a good article on the financing of Elon Musk's companies that flew under the radar of Hacker News that probably warranted further discussion [1] [2]. (Though the author of that piece completely misses the relative importance of each company to Musk, suggesting "he could try to sell [...] SpaceX, through gritted teeth, to a defence firm")

It's unfortunate there's a bit of a reality distortion field around discussion Elon Musk's companies sometimes. Maybe because everyone wants his companies to succeed...

[1] http://www.economist.com/news/business/21709061-entrepreneur...

[2] http://www.economist.com/blogs/economist-explains/2016/10/ec...

[patrickk]

> Maybe because everyone wants his companies to succeed...

Surely the only ones who don't want dramatically cheaper space launches, cheaper, widely available solar PV installations and attractive, affordable electric vehicles are deeply entrenched incumbents whose continued profitability involves polluting the planet, or those who really hate the environment for whatever reason.

There are valid criticisms you can level at Musk (I wouldn't like to be a direct employee), but taking on the Wall Street quarter to quarter thinking with enormous, risky endeavours that have the potential to completely revolutionise some of the biggest industries out there (energy and transport) takes an extreme type of individual to succeed.

[rtpg]

Considering how most of his current businesses exist thanks to gov't incentives/tax advantages in the domains, there are legitimate criticisms to the way in which his businesses are run.

Though I think it's proof the system works! Offer tax incentives for electric cars, get electric cars. Though it seems like Musk isn't making a super sustainable business just yet....

Solar City is arguably "good solar", but that company hasn't done well enough to hold up on its own, getting the Tesla bailout.

Tesla's made the great push for electrics, and that's awesome.

Also, I imagine there are many people who do _not_ want SpaceX to waste its time sending stuff to Mars, but want it to be a successful sattelite launching company. Meanwhile they're a sattelite launching company that blows stuff up more than average

[biehl]

You mean "Considering how most of his current businesses exist with some subsidies to slightly counter the massive government subsidies to fossile fuel companies and polluting-car externalities" ?

[celticninja]

It's odd how these subsidies are somehow seen as a negative for Tesla, when they are not tesla specific, they apply to all EV regardless of manufacturer, in addition the incumbents have been getting subsidies and bailouts for longer than Tesla Motors has existed and it would take a huge amount of government support for tesla to come even close to say GM in terms of public money received.

[greglindahl]

Not odd at all. Greenpeace attacks Apple for using the same environmentally-unfriendly materials that everyone else uses... because Apple is popular. The subsidy-for-Tesla narrative is driven by folks who either don't like the government, don't think climate change exists, or don't like the hype around Elon/Tesla.

[nickik]

There are just as many people who point Tesla subsidy as proof that "the market" does not produce good outcomes by itself, and that government subsidy was vital for all solar power and EV vehicles.

Bith sides are full of shit.

[tomp]

> his current businesses exist thanks to gov't incentives/tax advantages in the domains

What do you mean? It's not like the oil/petrol car/traditional space launch industries exist without government subsidies... This is basically just levelling the playing field (and ensuring a better future)!

[rtpg]

sure, like I said I like the system.

Just that some people out there innovate without taking subsidies, and some people would find that to be a "purer" form of success.

[patrickk]

> Considering how most of his current businesses exist thanks to gov't incentives/tax advantages in the domains, there are legitimate criticisms to the way in which his businesses are run.

Many of his Detroit competitors wouldn't exist/would be a shadow of their current selves if it wasn't for a massive bailout in 2008. Why is this never mentioned? If this is how low the bar is set (bailing out large, badly-managed companies) then why shouldn't the government provide incentives for exciting new industries that promise to provide huge wealth and employment in the future?

Furthermore, many of Tesla's non-US competitors are given generous subsidies, e.g. German car makers[1]

> Offer tax incentives for electric cars, get electric cars.

Everyone always mentions this also, what about fossil fuel subsidies (a gigantic, highly-profitable, self sustainable industry)? To tune of $5.3 trillion per year globally[2] You could argue that the loan provided to Tesla (now paid off in full, with interest, ahead of schedule) was just leveling the playing field.

What about the devastating human rights impact of backroom dealings with the likes of Saudi Arabia? What is a few hundred million in subsidies compared to cloak and dagger political dealings with with one of the most repressive, backwards regimes on the planet, simply because they are the main oil producer? [3] The funders/supports of Al Qaeda, the Taliban, ISIS, provider of most of the 9/11 hijackers, not to mention the same people who spread their twisted branch of Islam in European countries, by refusing to take Syrian refugees from the conflict they fund, instead funding extremism in Europe through Wahhabist mosques [4] [5]. When the solar PV industry and the EV industry become mainstream and cost competitive with fossil fuels (a process well underway [6]), this backwards regime will collapse in on itself through the lack of funding, and will totally cease to matter strategically. So we get a cleaner environment, and less human rights abuses in the world.

> Though it seems like Musk isn't making a super sustainable business just yet....

Using profit as the only measure of a sustainable business is another classic example of Wall Street short term bullshit. Amazon ploughs most/all of it's revenue into expanding it's operations, withholding profit, and they are currently valued at $390bn[7] Granted, it's still possible that Tesla will fail, but even if it does, Tesla will go down in the history books as the company who finally made the car industry get off it's ass and actually take advantage of lithium ion batteries to mass produce attractive electric cars, getting the world off the oil addiction in the process.

> Also, I imagine there are many people who do _not_ want SpaceX to waste its time sending stuff to Mars, but want it to be a successful sattelite launching company. Meanwhile they're a sattelite launching company that blows stuff up more than average

I suppose the solution is to continue to go with the existing, bloated players, with their fat cost-plus contracts, won by ripping off the government with the help of regulatory capture? [8]

In summary, Musk is attempting to disrupt energy, transport and space launch industries, often against competitors who are heavily subsidised and often have government officials in their back pockets, further tilting that playing field. He's trying to fundamentally disrupt these huge, sometimes corrupt industries, and yet people still shit on him for trying. I really, really don't get this attitude. Even if all his companies fail, he forced the competitors to up their game, so in fact he will have succeeded at most of his goals (perhaps not the multi-planetary goal for mankind if SpaceX fails).

[1] http://theconversation.com/factcheck-do-other-countries-subs...

[2] https://www.theguardian.com/environment/2015/may/18/fossil-f...

[3] http://www.bloomberg.com/news/features/2016-05-30/the-untold...

[4] http://www.pbs.org/wgbh/pages/frontline/shows/saudi/analyses...

[5] http://www.independent.co.uk/news/world/europe/saudi-arabia-...

[6] https://www.youtube.com/watch?v=Kxryv2XrnqM

[7] https://finance.yahoo.com/quote/AMZN?ltr=1

[8] http://www.latimes.com/business/la-fi-spacex-investigation-2...

"Coffman’s congressional district includes United Launch Alliance’s headquarters. Many of the congressmen represent states where ULA has operations."

[forgetsusername]

>simply because they are the main oil producer?

You realize that the US is a net oil exporter now, right? The SA regime will collapse because of many factors.

Your comments read like you believe everyone in the world is corrupt except Elon Musk.

[saiya-jin]

every politician IS corrupt in this world, usually on many layers by many parties at the same time.

I am sure there are few exceptions out there, but as described - few, and exceptions.

[kjdal2001]

Having different priorities than you is not the same as corrupt.

[throwaway1892]

As an European, I sincerly hope that the Saudi regime collapse, for all the BS they are creating here and in the Middle-East.

Still, for Syria, they are not the sole guilty party.

[pyvpx]

the US can't let that happen because the hegemony the dollar has over the world economy would be at a very high risk. Oil is traded in Dollars exclusively. This gives the Dollar some very powerful and unique powers. Saudi Arabia has a strong hold on the OPEC cartel.

[throwaway1892]

If oil stops being so important to the world economy (which might happen, but not right now), this would reduce the risk to the world economy. And as oil loose its importance, the OPEC cartel will weaken (also OPEC do not contain all oil-producing countries).

[ams6110]

I don't have anything against Musk. I simply don't care much one way or the other because the things he's working on will never affect me.

Electric cars are not something I'm interested in owning at the price Tesla is asking. Or even half what Tesla is asking.

Utility electricity works fine for me, is a small fraction of my monthly budget, and is reliable. I.e. something I never really worry about. Payments for and maintenance of a personal PV system do not interest me.

Space travel? Again if he wants to spend his money there, fine. But I don't see it changing my life.

I am not an entrenched encumbent either. I just drive cheap, old cars and have no interest in visiting Mars. I don't even care for conventional air travel.

[komali2]

With all due respect, that is the standpoint of a cynic or perhaps nihilist. Which is totally fine, people should have the right to not care about stuff without being judged for it.

However, if everyone was a perfect nihilist, you wouldn't have cheap old cars to drive because nobody would have made cars. You wouldn't have a cell phone, and especially a data connection, if not for the space program. And so on.

So while I don't think it's a problem if some people take your viewpoint, I think it's a problem when everyone does. Somebody has to care enough about the environment to stop rampant capitalism from destroying it so that we have a planet to live on 50 years from now (electric cars, improved public transit.) Someone has to care enough to get humans off the planet so that when it is inevitably destroyed (asteroid, nuclear war, virus, overpopulation) the human race can continue elsewhere.

[inimino]

> cynic or perhaps nihilist

Nonsense. It is a perfectly reasonable perspective for someone who isn't terribly interested in technological development and wants to live practically with what exists today. There's a place for dreaming about Mars, but most people don't. That's fine, and it has absolutely nothing whatsoever to do with cynicism or nihilism.

[tempestn]

Do you think this comment would be better received without the "Nonsense" intro? It's tough to bring someone around to your way of thinking when you dismiss theirs out of hand.

[saiya-jin]

this is beyond one's personal dreams. only total anarchist/nihilist truly doesn't care about state of the environment where he lives. solarcity - cheap storage of solar energy for daily uses in household - not for everybody, but potentially for billions for sure.

space - indirect windfall of discoveries and improvements made in materials, manufacturing processes etc - it happened in the past with Nasa, it happens/will happen with them and others.

I drive 13 year old diesel bmw that costed 25% of a new one and probably will never buy a new car, so what? Mankind needs people like him, now more than ever.

It's not perfectly reasonable perspective. It's a perspective of an old, grumpy person who only cares about himself, and the world he lives in. Sure, we have plenty of those, but it ain't the best attitude to say at least.

[inimino]

> anarchist/nihilist

You seem to be throwing these around as pejoratives, but neither of these terms has anything to do with this topic.

> doesn't care about state of the environment

Nobody but you said anything about not caring about the state of the environment.

> an old, grumpy person

You have no basis to make such remarks. Plenty of people care about the people around them, their immediate environment, and the circumstances they can personally and directly affect without getting caught up in fantasies about the future.

Wanting to send people to Mars for the good of the species is a fine idea, but your enthusiasm about it doesn't make you any more noble than someone who is simply more practically minded or not as optimistic as you are.

This kind of disrespect for the perspectives of others makes it that much more difficult to achieve the political compromises necessary to make any of these dreams a reality.

[a_plastic_bag]

> You wouldn't have a cell phone, and especially a data connection, if not for the space program. And so on.

Given enough time, it would've been invented regardless. You are right that we probably would be further behind technologically if it wasn't for the space race though.

[nandemo]

> You wouldn't have a cell phone, and especially a data connection, if not for the space program.

Is that so? Can you give me a source?

[lkbm]

The integrated circuit came out of Apollo[1], and apparently the cellphone camera came from NASA's work[2]. Not sure about the rest. We wouldn't have GPS, obviously.

You can credit a lot of stuff to the space program if you want, since all tech is built on other tech, and NASA was a big source of R&D in the 1950s onward.

[1] https://www.hq.nasa.gov/alsj/apollo-ic.html [2] http://www.space.com/10635-space-spinoff-technology-cellphon...

[patrickk]

To continue this train of thought, the entire reason Silicon Valley exists in the first place is because of Department of Defense spending: https://www.youtube.com/watch?v=ZTC_RxWN_xo (aka Big Government spending.)

The foundations of the web were laid down by Tim Berners-Lee while working at CERN, a huge, expensive physics research organisation funded by European governments: https://en.wikipedia.org/wiki/CERN#Computer_science

[nandemo]

Eh, so IC was invented and commercialized before Apollo, but Apollo was instrumental in accelerating the development of ICs. That's a far cry from "we wouldn't have cell phones without NASA"...

[shaneos]

All satellites for many years were only launched as part of the space race between the US and the USSR. Of course there would be no satellite communication without the space program.

https://en.wikipedia.org/wiki/Explorer_1

[nandemo]

But cell phones aren't satellite phones. Am I missing something? Do cellular networks rely on satellites indirectly?

I'm not talking about GPS, which isn't an essential feature of cell phones.

[njharman]

Pollution affects everyone. Terrorist attacks and the multiple wars fought affect most people, certainly everyone in the West.

Only a self centered ignoramus thinks reducing need for oil doesn't help them.

[forgetsusername]

>Terrorist attacks and the multiple wars fought affect most people, certainly everyone in the West.

The West? I'm going to go out on a limb and say that the people in the Middle East (you know, where the bombs are actually being dropped*) are "certainly" affected.

[mikeash]

Even if you use none of these things directly, other people's use of them affects you. Electrified transport benefits everyone, even people who never use it. Same for energy storage.

[Consultant32452]

You forgot driverless transportation, which very soon will impact virtually every good sold in the country.

[irq11]

...particularly when a self-driving Tesla slams into it!

[spectrum1234]

Model 3 is going to cost $35k, and like $28k after incentives. It will SAVE about $1500/year on gas and $500 on maintenance. This is cheaper than a Honda Civic.

Are you sure you aren't interested at this price?

[ghaff]

Really? I have a 20 year old Honda del Sol--which is essentially a 2-seater Civic variant--on which I spend under $500/yr on gas and under $500/year on maintenance. That's not typical I'm sure--and I do have another vehicle--but you can't claim your numbers as general savings.

[randominion]

Speaking of savings, it's funny how no one is including safety in this breakdown of cost.

The Model S/X are considered some of the safest vehicles on the planet, even breaking testing equipment, while I'm not convinced you'd do as well in that 20 year old del a Sol (or any older vehicle for that matter).

And once you start dealing with kids and safety, it becomes even more important.

[hxegon]

Can you really compare a 20 year old honda del sol to a new model 3 (when it comes out obvioulsly) though? I don't have anything against used cars, but its apples and oranges. You can totally claim those numbers as savings, in an apples to apples comparison to a similar class car from a close year.

[ghaff]

The claim was around saving money vs. a Civic. You're going to have to assume a lot of miles (and make favorable assumptions about long-term maintenance) to make the numbers work. I have nothing against EVs but they're generally not a good purely financial decision for most people today.

[ADDED: The mass-market Tesla is going to still be a premium vehicle relative to other options. There's nothing wrong with that. But it's unrealistic to expect that crunching the numbers the right way will make Tesla the optimal financial decision for everyone.]

[makomk]

When you're what comparing is gas and maintenance, certainly - the main disadvantage of 20 year old cars is that they're worse for both.

[zitterbewegung]

Are you sure about maintenance? Consumer Reports has all of the currently released cars at below average reliability.

[greglindahl]

Consumer Reports now says Model S is average for reliability -- that's the good news that the LA Times buried in their article.

[josefresco]

Good luck on that 28K price point ... maybe if you're shopping for a Chevy but not a Tesla.

[Aeolun]

That means I have to drive it for 15 years before it's 'free'... That's a long time to go with one car.

Edit: Still a (relative) good deal though, depending on what car you'd otherwise have bought.

[nindalf]

You don't need the car to be "free" though. If you were going to buy a Civic in any case, you were going to get the intrinsic value of getting around in a decent car. Now you're getting the same thing and in addition, a little spare change. If the numbers that person quoted are correct, it's a strictly better deal.

[nsp]

And all the other trade offs involved in electric vehicles. e.g. Worse for road trips,

[sirsar]

How long do you have to drive a Honda Civic before it's free?

[XJOKOLAT]

Do you walk around with an effective pollution mask?

One that helps you avoid pollution but doesn't make you look like Bane from the Dark Knight Rises?

Please send me a link, thanks.

[takeda]

> Electric cars are not something I'm interested in owning at the price Tesla is asking. Or even half what Tesla is asking.

This was written 10 years ago:

https://www.tesla.com/blog/secret-tesla-motors-master-plan-j...

In summary the idea was to start with expensive electric cars (roadster, model S, model X which was initially not planned) to fund research on affordable electric cars (model 3 supposed to be first of them). As electric cars are becoming more popular and there are technological advances, we'll get them cheaper and cheaper.

[tamal]

What kind of unconventional air travel do you care for?

[ams6110]

I meant, as opposed to space travel. I actually don't care much for travel at all.

[annnnd]

Still - the change that he is pushing will affect you. Like it or not he has become a large player in car industry, which by itself affects many economies on the world. Not to mention what looks like a slow, deliberate and imho unfortunate transition from owning a car to being driven somewhere. Do you think you will be allowed to drive your own car in 30 years time? No more than the horses are allowed on streets nowadays. You can take them for a stroll, but you go on highways with them.

[MarkMc]

> the things he's working on will never affect me.

Perhaps not in next 5 years, but what about 20 years? Do you expect that electric cars will never be cheaper than petrol cars? Do you expect to never ride in an autonomous vehicle?

[mwfunk]

I don't think that's the only reason someone might express skepticism of Musk at this point. They might want Musk to succeed at these things very, very much, but fear that his sketchier tendencies might lead to failure.

[karmelapple]

I'm curious - what sketchier tendencies do you mean?

[kmonsen]

How autopilot was enabled for example. It has potentially created a difficult public perception of self driving cars.

[karmelapple]

Poor judgment with the name... but sketchy? I don't think introducing the feature is sketchy, since it certainly seems to be working pretty well so far, right?

[nartsbtaa]

There's a difference between wanting something to be true, and acknowledging whether a business is succeeding or not on its own terms.

[forgetsusername]

>but taking on the Wall Street quarter to quarter thinking with enormous

It's delusional to think that Tesla isn't in bed with the big banks and playing all the Wall Street games. In fact, I think they do it more than any prominent company out there.

If they don't play "quarter to quarter" games, what was the big rush to sell all the ZEV credits this quarter to get profitable? Why not just carry on as they were? My bet: there's another capital raise coming, and the argument will be, "See? We can be profitable whenever we want."

But I'm more concerned with TSLA the stock, not the company.

[lmm]

> taking on the Wall Street quarter to quarter thinking with enormous, risky endeavours that have the potential to completely revolutionise some of the biggest industries out there (energy and transport) takes an extreme type of individual to succeed.

Does it? It makes for a good narrative, but are the burnout-inducing hours and unusall funding sources actually making them more likely to succeed than a company taking a more conventional approach would be, or less?

[ChuckMcM]

I agree with patrickk that it isn't that people want his companies to succeed so much as they want the product he is bringing to market. I've wanted a no compromise electric car for a long time before Tesla came around, and got it in the Model S, now I don't want the company that brought it out to fail before there is incontrovertible market proof that the demand for electric cars is real and will continue. That takes on the order of 10 years of market participation AFAICT.

I also wanted to exploit the solar power that is available in moderate climates like the Bay Area. I did that by "over paying" for my solar install in 2003 but at the same time the creative financing that Solar City brought to the market enabled tremendous volumes (and a price war from the Chinese government helped of course but that is a different story).

I also want to go to space for less than $20M on a 1960's tech space ship to a kludged together of modules. Back when Regan's Star Wars vision was creating capital availability for companies like Rotary Rocket and DC-X I was hoping that would finally be the point where regular commercial access to space was made possible. It died and I spend a couple of decades wondering if we'd die as a species on this planet. Now Bezos and Musk are racing to create a capability that promises to take me to orbit for significantly less cash, I'm all for the product and so I want the companies working on that product to succeed.

It wasn't until the decade of the idle billionaire that this even became possible.

[ebalit]

The first article was discussed on Hacker News: https://news.ycombinator.com/item?id=12773035

[codeulike]

that flew under the radar of Hacker News

It was on the hn front page for at least 24 hours

https://news.ycombinator.com/item?id=12773035