Govt Picks a Winner: Tesla Gets $465 Million
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.
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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!
Details on page 2:
[...] a major impact on the country’s auto industry. Most importantly, it will open the door for smaller, start-up companies to compete which will need skilled auto workers. It could also level the playing field for many [...]
[...] Tesla has a deal to supply electric-drive systems for Daimler’s Smart electric cars. Part of the $465 million loan Tesla received from the Obama adminsistration is being used to set up the plant for building the electric-drive technology for other electric car [...]
[...] the Department of Energy has provided stimulus loans of about half a billion dollars each to both Tesla and Fisker to develop and produce next generation electric cars, while at the same time Biofuels [...]