[bob13579]

How exactly did Tesla earn an "A" up to that point? Every small electric car manufacturer was losing money left and right. Two smaller startups got the loan (Tesla and Fisker) to survive, while the others didn't (Bright Automotive, etc.). The ones that didn't get the loans went out of business. The one that got the other $500 million loan went out of business (Fisker). Only Tesla survived by having one tiny profitable quarter (which was a low single digit profitable quarter where they sold 3000 cars to rich people).

[Confusion]

> How exactly did Tesla earn an "A" up to that point?

Business plan, business model, customer research, advances already made, further along, ... There are dozens of possible reasons to loan $500M to Tesla, but not to another company.

There are dozens of possible reasons why you would loan $1000 to one friend, but not to another. Someone else wouldn't know those reasons, but if the friend complained about you being unfair, you would be quite miffed if someone went on the internet complaining how unfair you were, based on treating two people differently, without considering that maybe these people actually are different.

These companies may be alike in trying to sell an electric car. That does not make them comparable for the purposes of giving them a loan.

[bob13579]

So the government is now a venture capitalist or investment bank and should be encouraged to pick winners and losers now?

It's quite funny that these Tesla Roadsters are being bought by rich Americans, and being subsidized by average Americans, and yet there seems to be no outrage from those purportedly upset about inequality. The average American isn't benefiting by enriching billionaires and millionaires with their $100,000 roadsters.

[DEinspanjer]

So because the company cannot take $500m and instantly start turning out third generation EVs that have a price point that the average American can afford, we should just refuse to invest any money in driving toward that goal and just stay with the status quo of oil-dependant cars?

The end goal of the loan was not to make Elon richer or enable Tesla to sell a few thousand cars to "billionaires and millionaires". It was to support a company that had demonstrated a plan that looked reasonably viable for building up the EV tech to the point that it can become a mainstream replacement for ICEs. The incumbents have not shown as much interest or drive, and the initial attempts by them at delivering EVs have not seen the same level of adoption and excitement from the public. I believe that this lack is due to the less efficient manner they are going about it: trying to retrofit EV technology into the ICE world.

I am certainly not a millionaire. I am above the salary level of the average American. That meant that it was possible for me to save up and purchase a Model S. Based on my experience of owning it and my research of the company, I believe that this is the future and I believe that $500m loan was not simply a capital venture or investment but rather that it was very much a benefit to the average American because it will enable a third generation of EVs to enter the mainstream.

I believe the established companies see that plausible future also and are fighting as hard as they can with lobbying and lawsuits to prevent being overshadowed by it.

[scythe]

>So the government is now a venture capitalist or investment bank and should be encouraged to pick winners and losers now?

http://en.wikipedia.org/wiki/The_General_Theory_of_Employmen...

We've come a long way since the 1930s, haven't we? Yes, the government can do these things, and -gasp- it works, on a small scale, under certain conditions (economic depression).

The "$500m subsidy" to Tesla costs taxpayers zero after being repaid -- but represents a loan from the median taxpayer of about, oh, I dunno, seventy-five cents.

[bob13579]

The federal tax credit of $7,500, plus any state subsidies, for each Tesla sold doesn't ring a bell to you?

[scythe]

I should perhaps note that that isn't a subsidy to Tesla: it applies to every electric car manufacturer. It's not relevant to the question, which is, "did Tesla succeed "unfairly" w.r.t. other makers?". It's also a red herring for your previous argument about inequality: "Both the Nissan Leaf electric vehicle and the Chevrolet Volt plug-in hybrid, launched in December 2010, are eligible for the maximum $7,500 tax credit." -- these are cheap vehicles.

But yes, now that you've successfully moved the goalpost, I might have to revise my estimate of seventy-five cents.

[bob13579]

This is just funny. Which car manufacturers on that $7,500 federal tax subsidy electric car list get $500M loans to build out their electric cars?