Elon Musk’s subsidy-slurping, tax-credit-trading companies will be the poster children for the Biden administration, like Solyndra was the poster child for the Obama administration. From Eric Peters at ericpetersautos.com:
It is being “reported” that Tesla’s net “earnings” have “surged” to $438 million. What they do not report is that this includes $518 million “earned” via regulatory credits – which aren’t cars. Rather, they are monies mulcted from other car companies, paid to Tesla to get “credit” for not having made a sufficient number of electric cars themselves.
Enough to achieve compliance with government requirements, as in California, that they build a certain number/percentage of them – else pay Elon to get the “credit.” In other words, it is a racket.
It is very interesting that no major automotive media reports the context about Tesla’s “earnings.” Instead, it is “reported” that Tesla is making money hand-over-fist.
Which is true.
It is also true of the IRS. And of Al Capone. But the media in those days did not cover for Capone. Everyone knew he was a gangster – and to be fair to Capone, he was only that because the government made his otherwise legitimate business – the selling of alcohol to people who very much wished to buy it – illegal.
The situation with Tesla – and Elon Musk – is morally and legally the inverse. The government has made it illegal for other car companies to not sell electric cars, which most people do not wish to freely buy.
It makes no more sense for Toyota, say, to build lots of electric cars when there is no real market for electric cars than it does for Starbucks to build coffee kiosks in Death Valley. Luckily for Starbucks, there is no government regulation requiring hot coffee to be sold in Death Valley as the price of being allowed to sell hot coffee in San Francisco – so Starbucks doesn’t have to build coffee kiosks in the desert – nor pay some other coffee company that does build them in the desert, so as to get “credit” for it.