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Tesla on ABC World News Oct 25th, 2011...

I just caught a story on ABC World News tonight about government grants to green tec companies, and they brought up Tesla and Karman Fisker. The interviewer questioned Tesla VP Diarmuid O'Connell, with regard to their SEC filings stating that they "expect continuing losses for at least the forseeable future", and if they don't make a profit, they might not be able to pay back those government grants, to which Diarmuid responds, "...well, we will make a profit".

Personally, I would have put FAR more money into Tesla, over GM, because GM is a JOKE! Their business model is bound to fail again, because they are thinking backwards, and not forwards.... Big unions, poorly built cars, weak designs, no future vision. I have only seen a couple of their new hybrid EV cars on the road, and they are not much to look at. Otherwise, their big commercial push is the new 300, with a former hip-hop artist plugging how Detroit is now cool, etc. Seriously? Who do they think they are kidding? Detroit is a cesspool, and no one I know thinks of 'cool' when the word Detroit is mentioned, but rather $100.00 delipadated homes, in drug infested neighborhoods.

The FACT is, Tesla is new, fresh, innovative, and built in America with the kind of brilliance that made Apple Computers the BIGGEST company on the planet!
I know it's a risk starting a car company in America, because the big three automakers here don't want anyone else to make the look worse than they already do, but seriously, they should be embracing Tesla, because once the Model S hits the market, they all know dam well, they will be doing everything they can to jump on the bandwagon with something that looks just like it.

Well I feel with 40 k on the line we should at least have some input in the interior design of the car and more info on pricing and options.

I did not feel reassured by the Tesla vp on that interview

I dont want to be on the wrong side of some bad decisions I have no control over

"Is it possible to lose our deposit money if Tesla goes bankrupt? My wife is concerned as am I."

Hi Andrew,

I think it is possible, but unlikely to lose our deposits.

I ran across this financial analysis today. Hopefully it will provide you and you wife some relief.

Although these folks are not exacting advising to buy Tesla stock, they don't think it will run into any financial problems in the near term.

http://www.thestreet.com/r/ratings/reports/analysis/TSLA.html

"TESLA MOTORS INC is extremely liquid. Currently, the Quick Ratio is 2.55 which clearly shows the ability to cover any short-term cash needs. The company's liquidity has increased from the same period last year.

At the same time, stockholders' equity ("net worth") has greatly increased by 3,587.32% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future."

Larry

I saw an interview with Musk where he stated that to loose your deposit a few things would have to happen:
1) Tesla goes bankrupt
2) Elon in mentally incapacitated (but not dead)
3) The person replacing his decision making capacity acts against his written will.

Salesmanship? Dunno, but I think that's what he said

Andrew,

You have input, but for 40k do not get to steer the boat. Nor do I as a reservation holder. We are limited to staying on the boat, or getting off.

Been watching Tesla for a few years, and they have been tracking to plan. NUMMI was well in order. Our Seattle brick and mortar store has been there for a couple years.

Eh, I could be wrong, but i'm relaxed.

@TikiMan

Thanks for the DeLorean video link. Somewhat depressing but worth watching.

@Andrew18

I asked that very same question prior to reserving. I got a swift response that I was comfortable with. YMMV, but my recommendation is to formally ask a Tesla representative privately regarding your concerns.

@TikiMan

Feel free to knock Romney (or any other politician for that matter), but in this case there's a difference between private venture capitalism and publicly funded venture capitalist. As such, hypocrisy isn't the right characterization. IMO, at least.

Tesla is on track (apparently) to start delivery of cars to customers by July 2012, four months before the election. Made in America, sold in America; not only won't anyone be pulling the DOE loan, but it will be a great moment of political theater. I'm willing to bet that President Obama will be in Fremont when the keys to Signature #1 are handed over to the first owner, or at some similar "putting America back to work" photo-opp.

I'd find it very surprising if the President actually showed up there. What would all the workers in Detroit be thinking? "Those should have been our jobs!"

I think the White House will make at least a passing mention of it, probably a lot more than that, but I don't think they'll make it "personal".

Latest twist (getting back to the original topic): Fisker is fighting back, not surprisingly.
http://green.autoblog.com/2011/10/26/fisker-fighting-back-against-abc-ne...

For my deposit (I put the $40k for the Sig), I figured it was incredibly unlikely that Tesla would suffer catastrophic failure before I took delivery. Now, maybe bad things will happen and I'll be left with a car that has no company behind it anymore, but that's a risk no matter when I buy it. Heck, that's a risk with other manufacturers (was it Kia or Saturn that folded?).

I believe it was Saturn that folded.

Personally, I am banking that Tesla will merge with Toyota-Lexus, before all that amazing tec goes to waste.

On the flip side, I am FAR more worried about all the folks still driving 12 MPG gas cars and trucks (millions of which are still in production), and the fact that gas will very well likely hit $6.00 to $7.00 a gal by the time the Model S hits the road. There might be a LOT of bankruptcies on the horizon, with gasoline becoming worth more than the price of Gold! With $200.00 a fill up, I can see many products and services taking a huge hit. Even Google and Apple could lose half of it's share price, when many customers find out that they can no longer afford luxuries like fancy smart-phones, or tablet-computers, because transportation and food cost skyrocket 50%!

Right now, what few of these big public companies aren't saying in their SEC filings, is if oil keeps skyrocketing, their stocks will plummet faster than real estate!

Tech companies will be fine, don't worry. When gas is super-expensive, the first thing you cut is going out & travel. So what do you do? TV, games, web, video, digital social activities etc.

... until the next set of rolling blackouts, followed by a baby boom, ...

@ jfeister “I don't think the government should be subsidizing businesses in any way shape or form.”

I ‘slightly’ disagree.

One example - the early 1960’s. In the early 60’s President Kennedy set in motion a plan to put a man on the moon by 1969. NASA succeeded and spent more than a few billion dollars in the process. However, the real benefit of the moon project was not landing on the moon; we invented and developed a wide range of new technologies, products, materials, etc. that greatly advanced the world. It would not have happened without Uncle $am.

Starting a new car company requires billion$. The fact that Tesla can do it for so little speaks volumes.

I agree our government should not have bailed out the banks, etc. Our government should have been investing in alternative fuels ever since the 1973 Oil Embargo. U.S. drivers pay half of what other industrial countries’ drivers pay for gasoline (it doesn’t cost them more to make it). All our government has to do is raise the gasoline taxes and encourage hydrogen, natural gas, fuel cells, or the Lord forbid –EVs.

By the way, if the government had not built all those paved roads back in the early-mid-late 1900’s we would all be riding horses or driving Jeep Wranglers. When the motor press starts driving the "S" all those who are worried about losing their deposits will refocus and worry about WHEN they will get their "S."

@brianman's comment: "... until the next set of rolling blackouts, followed by a baby boom, ..."

I lol'd at the apparent Pavlovian response to the lights going out.

Both GM and Chrysler went bankrupt, and received huge bailouts, making the gov't the de facto owner. Most GM shares were turned over to the union, and the bondholders etc. got hosed (illegally).
http://www.thefreemanonline.org/featured/political-bankruptcies-how-chry...

Ford, btw, did not go bust, and refused bailout money. It has subsequently taken loan guarantees for EV projects, etc., but no grants, and the ownership structure is unchanged.

I suppose I am reassured by these comments, just a wave of cold feet. Im getting over it though. I'm going to stay put.

Keep that sig under 85k!

"Keep that sig under 85k!"

It's possible. After federal tax rebate.

Ok TikiMan – its one thing to debate gov. loans to large US auto makers but please keep the people of Detroit out of this.

I lived in the Detroit area for most of my life until I moved for work. Still in Michigan. Yes, there is a ‘big commercial push for the 300’ but that’s all it is, commercials, most new cars have an associated advertising campaign. ‘Former hip-hop star’? Try current, he isn’t dead, his name is ‘Eminem’ and last I checked he was still producing music. Also, the artist isn’t plugging how ‘cool’ Detroit is… HE IS FROM DETROIT!

Detroit is ‘cool’ we have great sports teams and arenas, casinos, art, lots of History, water front, parks, and museums. Many of them built and donated by people associated with the automakers. Not to mention Detroit is less than an hour away from one of the great lakes and less than 4 hours away from all great lakes.

Sure, there are bad neighborhoods but your city would have them too if there were more houses than jobs… No city can sustain 10% decreases in jobs for 10 years and still be squeaky clean and drug free.

Lastly, please do not refer to Detroit as a cesspool. Those of us who know what Detroit is and what its people are about… take offense to that. Yes, Detroit is a depressed city. Without the government loans and bail outs… Detroit would be even worse off. Like it or not… if we didn’t help the Detroit auto makers the whole state of Michigan and the surrounding region would collapse. I don’t think you fully understand how many people depend on the auto industry in and outside Detroit. Just think of how many auto assembly plants and parts suppliers don’t even operate in Michigan.

Thanks for kicking Detroit while its down. We thank you, a$$hole.

Don't hold back viao44, tell us how you really feel. :)

A telling problem with Chrysler's ads is that they were actually trying to promote the new 200. The 300 doesn't need any marketing since it's selling quite well. But everyone who sees the ad thinks they're promoting the 300 and don't know anything about the 200.

lol @ Mycroft

I am just hating the haters.

Tesla announced that they sold out of their first year's production and that they are projecting to be profitable in 2013.

@Andrew18 - Your $40K deposit is a lot of cash, but it pales in comparison to what Elon has on the line. After selling PayPal, he could have easily invested the proceeds in tax free bonds and comfortably lived off the interest for the rest of his life. Elon is brilliant, and passionate about Tesla. With his intimate knowledge about Tesla and the industry, he placed the ultimate bet (he's all in). I don't know of anyone else (Steve Jobs included), who bet it all on his own company (at this dollar magnitude).

Knowing that, I am very comfortable with my Model S deposit, and my investments in TSLA stock. The worldwide automotive industry will take notice in several months when the Model S begins shipping to customers.

Ten years ago, if somebody told me that in 2012 I would be driving down the highway at 70 mph in a full sized luxury car that runs only on electricity, (for 300 miles), I would have laughed in their face, and said "that stuff only happens in sci-fi movies.

THIS IS HISTORY IN THE MAKING!

David M, not to go off the topic rails, but Jobs almost lost everything with Next and Pixar. Toy Story saved his butt in the latter case and Apple the former.

I agree, Elon is all-in and if two years ago you told me I was going to empty my savings of $40k to reserve a $100,000 car, I would have flat out said you were nuts; there's no way I would do that. Well, never say never, as they say.

Most of the really large fortunes in America were a result of some form of largess from government. Read Wealth and Democracy: A Political History of the American Rich (Hardcover) by Kevin Phillips who was a speech writer for Nixon. It details the deals over most of our history. It is a myth promulgated by the super rich that they earned it all by hard work and cleverness. Even the poor work hard and are often clever.

The link to Amazon for the Kevin Phillips book did not come out as a hyperlink. Sorry. Also I would like to point out to @ jfeister that we do not live in the ideal libertarian world you hope for, China and the EU plus others routinely heavily subsidize both start-up and established industries. We have to play it where it lies.

@Mycroft - Oh yeah, forgot about that. Thanks for the correction. And yes, it will be really cool next year driving a car that was considered science fiction less than 10 years ago.

Hot of the press, but I think we all already knew this... :) http://green.autoblog.com/2011/11/01/musk-says-tesla-model-s-sold-out/

@Mycroft and David M

You might think making big bets is rare and a sign of confidence, but that doesn't impress me.

There are plenty of folks in Vegas that make big bets regularly. Some consider it a disease.


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