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Published on June 23rd, 2009 | by Susan Kraemer

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Govt Picks a Winner: Tesla Gets $465 Million

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Steven Chu this morning finally puts the nail in the coffin of the congressional No We Can’t contingent’s stance.  For the last 8 years they’ve been saying that “government can’t pick winners and losers”, by which they simply meant keep all the current lavish oil subsidies in place and don’t make any changes in energy policy that might develop a competitor.

The Japanese government had no such qualms when they saw a winner in the developing Prius, back in the 90’s. They boldly subsidized Toyota’s first Prius by paying for a sizable portion of the early models.  So if you drive a hybrid, you have the Japanese government’s willingness to pick a winner early on to thank for the extra pennies in your pocket, even if your hybrid is not a Prius. Because the followers certainly would not have followed without that first government money enabling hybrid development.

If you have ever had a manufacturing business as I have, you understand how expensive the first of any new prototype is to develop, especially innovative new products, and it is no measure of what EVs are likely to cost to manufacture once they are routinely rolling off assembly lines en masse.

So picking winners to invest in on behalf of the public good does make sense. At least initially they need that government support.

Now it looks as if our own government is getting as smart as the Japanese government was back in the ’90’s. Kudos to our new DOE. Today, I’m proud to be an American!

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About the Author

writes at CleanTechnica, CSP-Today, PV-Insider , SmartGridUpdate, and GreenProphet. She has also been published at Ecoseed, NRDC OnEarth, MatterNetwork, Celsius, EnergyNow, and Scientific American. As a former serial entrepreneur in product design, Susan brings an innovator's perspective on inventing a carbon-constrained civilization: If necessity is the mother of invention, solving climate change is the mother of all necessities! As a lover of history and sci-fi, she enjoys chronicling the strange future we are creating in these interesting times.    Follow Susan on Twitter @dotcommodity.



  • Constantin

    Tesla MODEL S with 300 miles range RULES !

  • Constantin

    Tesla MODEL S with 300 miles range RULES !

  • http://www.globalwarmingisreal.com Tom

    An interesting look at this is on http://www.triplepundit.com

  • http://www.globalwarmingisreal.com Tom

    An interesting look at this is on http://www.triplepundit.com

  • http://www.bullseyepr.com John Rarrick

    Chalk one up for sanity!

  • http://www.bullseyepr.com John Rarrick

    Chalk one up for sanity!

  • Constantin

    “The all-electric sedan consumes no gasoline and runs entirely on electricity from any conventional 120V or 220V outlet. It will get the equivalent of more than 250 miles per gallon, far exceeding the 32.7 mpg minimum efficiency required for large sedans.”

    What can I ask more than that ! 250 miles per gallon !

    ELECTRIC RULES NOW !

  • Constantin

    “The all-electric sedan consumes no gasoline and runs entirely on electricity from any conventional 120V or 220V outlet. It will get the equivalent of more than 250 miles per gallon, far exceeding the 32.7 mpg minimum efficiency required for large sedans.”

    What can I ask more than that ! 250 miles per gallon !

    ELECTRIC RULES NOW !

  • Pingback: Govt Picks a Winner: Tesla Gets $465 Million | DodaPedia()

  • Shorty Mort

    How is this even slightly intelligent. Who on earth is going to be able to afford one? They’re getting all this money, but they sell luxury electric cars that cost hundreds of thousands of dollars. Fun as it may seem, it’s not practical and isn’t going to positively impact the average American’s life at all, it’s only going to raise their taxes so the rich can buy these luxury vehicles. C’mon… think it through. It’s ridiculous. The Hybrid Hummer would have been a better investment than a two passenger luxury car maker. Americans have families and budgets and have to go shopping for groceries. This makes no sense at all.

  • Shorty Mort

    How is this even slightly intelligent. Who on earth is going to be able to afford one? They’re getting all this money, but they sell luxury electric cars that cost hundreds of thousands of dollars. Fun as it may seem, it’s not practical and isn’t going to positively impact the average American’s life at all, it’s only going to raise their taxes so the rich can buy these luxury vehicles. C’mon… think it through. It’s ridiculous. The Hybrid Hummer would have been a better investment than a two passenger luxury car maker. Americans have families and budgets and have to go shopping for groceries. This makes no sense at all.

  • ChuckL

    This sounds good, but I find myself wondering if Obama and congress have yet determined that a “sound business practices DO NOT include government subsidies and DO require a profit.

    THIS SURE LOOKS LIKE A GOVERNMENT SUBSIDY TO ME.

    “These loans – and the additional support we will provide through the Section 136 program – will create good jobs and help the auto industry to meet and even exceed the tough fuel economy standards we’ve set, while helping us to regain our competitive edge in the world market.”

  • ChuckL

    This sounds good, but I find myself wondering if Obama and congress have yet determined that a “sound business practices DO NOT include government subsidies and DO require a profit.

    THIS SURE LOOKS LIKE A GOVERNMENT SUBSIDY TO ME.

    “These loans – and the additional support we will provide through the Section 136 program – will create good jobs and help the auto industry to meet and even exceed the tough fuel economy standards we’ve set, while helping us to regain our competitive edge in the world market.”

  • http://dotcommodity.blogspot.com Susan Kraemer

    It costs more to make the first of any entirely new invention Mort.

    This will help it become more affordable faster.

  • http://dotcommodity.blogspot.com Susan Kraemer

    It costs more to make the first of any entirely new invention Mort.

    This will help it become more affordable faster.

  • Brian Sterling

    Anyone who thinks Japan is a good model to follow needs to read this:

    http://reason.com/blog/show/134295.html

  • Brian Sterling

    Anyone who thinks Japan is a good model to follow needs to read this:

    http://reason.com/blog/show/134295.html

  • http://www.moto.aero Michael McMahon

    I’m with Shorty Mort. As much as I love cars and especially the concept of electric cars, Tesla has not shown me that they deserve taxpayer support. Many reports have come out about internal strife at Tesla and severe cost overruns. Tesla is still a struggling start-up and it’s hard for me to understand why they deserve this money unless the decision is based largely on a company’s ability to generate PR and buzz for electric cars. I imagine there are many, many other electric car experimenters/developers who would have loved to had access to this money.

    ON THE OTHER HAND — we’re throwing billions at banks, airlines, farmers and car companies, $465 million now sounds like pennies!

    But seriously, as Mort wrote, giving millions of precious taxpayer dollars to Tesla to produce $50,000 luxury cars just doesn’t make sense to me.

    Michael

  • http://www.moto.aero Michael McMahon

    I’m with Shorty Mort. As much as I love cars and especially the concept of electric cars, Tesla has not shown me that they deserve taxpayer support. Many reports have come out about internal strife at Tesla and severe cost overruns. Tesla is still a struggling start-up and it’s hard for me to understand why they deserve this money unless the decision is based largely on a company’s ability to generate PR and buzz for electric cars. I imagine there are many, many other electric car experimenters/developers who would have loved to had access to this money.

    ON THE OTHER HAND — we’re throwing billions at banks, airlines, farmers and car companies, $465 million now sounds like pennies!

    But seriously, as Mort wrote, giving millions of precious taxpayer dollars to Tesla to produce $50,000 luxury cars just doesn’t make sense to me.

    Michael

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  • http://www.ecocar4u.com trifekto

    465 million!!!!!!! give me 465 thousand and I will make cars,and trucks run on either cng or bio diesel or electric[not a plug in] with generator on board so you can plug something into it if needed.

  • http://www.ecocar4u.com trifekto

    465 million!!!!!!! give me 465 thousand and I will make cars,and trucks run on either cng or bio diesel or electric[not a plug in] with generator on board so you can plug something into it if needed.

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  • http://Web Todd

    I think its insane to support this car company, with taxpayer money for a car line that only a small percent of Americans can afford (Even the low end model S at 57,000) ???

  • icthelite

    I know a couple that have received US Tax dollars. Think
    Chevy’s Volt [a failure] and Fisker Karma [another failure] The A-123
    automotive battery manufacture for electric vehicles, another failure.

    How many strikes do we give US manufacturers in this field
    before they strike out?

    Hell even Japan, as successful as they were in their
    marketing with the Prius are pulling the plug.

    I have said many times that the makers of this new form of
    ‘green’ transportation never spent any time looking at what the maintenance
    cost were going to cost the owners of these cars. That’s beginning to surface
    now and it ‘isn’t cheap’.

     

  • http://www.facebook.com/profile.php?id=100002601933332 Kevin Turner

    This lady doesn’t have a brain in her head. She’s proud to be an American, because the government steals tax dollars and gives it to businesses that they feel are worthy. At the same time, she decries the horrible “subsidies” given to big oil. If she had bothered to do a bit of research, she would find that oil is not subsidized. They get the same tax breaks every other business gets.

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