$50M worth of Tesla equipment sits unused in a Wheatfield warehouse

Interesting info. If they got 750 million statewide investment, the factory used $700 million of it then? 50 mil left over? I hate state investments in businesses via direct or tax cuts. But this couldn't be worse than Washington state's massive tax cuts for boeing, which proceeded to move more production and jobs to their east coast factory right after they got the tax brake.

Based on your timeline, it seems that Tesla was already, at least partially engaged since SolarCity's acquisition of Silevo.

So the whole project is stuck in development hell? Is this going to be "Gigafactory/2"? I guess the question I need to ask is "is this project dead or on hold?"

Why would have Elon Musk been involved? Did he actively participate in SolarCity management before the acquisition?

Indeed they are. And manufacturer plants are expensive, so competition is kind of cut-throat to get high volume orders. Also capacities used to be largely under utilized in the last years. This forced prices further down, eroding more margin. No wonder all big manufacturers, with the exception thin film, are in China where it is easy for them to get financing.

Sure. But inheriting a deal is very, very different from originating a deal.

They can have change of control provisions.

This is just not accurate. The Buffalo plant economic stimulus package had a clawback provision if Tesla doesn't meet employment milestones. They have been meeting those milestones and so will not have to pay the fee: https://buffalonews.com/2020/02/13/tesla-looks-like-a-good-b...

I know people want to make this into some corruption scandal (blaming it either on the state or on Tesla or both), but the state did their job by putting these employment requirements in their contract WITH PENALTY, and Tesla is doing their job by hiring enough people to avoid the penalty.

What's really the problem, here? 5/6ths utilization of capital equipment seems pretty good, particularly in a fast evolving field like solar power (where things like bifacial panels and Tesla's integrated solar roof weren't really a thing when the deal was first signed).

How much of these subsidies are cash, and how much are tax breaks? Cash subsidies from taxpayers are bad, I agree, but at least with the tax breaks, the taxpayers are not worse off: if the alternative is no factory at all, then they don't lose anything on the tax breaks, because that tax revenue wouldn't have had existed anyway.

>Multiple people have gone to jail for corruption / bid rigging on the project

That would be a new one, can you name a few?

What am I missing here? Is there any reason why another company can't just take over, seeing as they could probably get the equipment at a great discount?

> Considering that Tesla will longer make solar cells in that factory

Solar cells? Panasonic was making battery cells for Tesla. Are you mixing up different uses of the word “cell”?

For me, neither the OP link nor the one you gave works.

I suspect it's more likely overzealous GDPR paranoia. Not that that's any better.

To be fair the healthy percentage depends on other variables. If there is enough of a "bulk discount" and it doesn't depriciate or obsolete the 17% may be smart compared to the alternatives.

>You imagine healthy companies just having 17% of total investment

I imagine healthy companies keep enough manufacturing parts to be able to repair/replace/scale as needed. Particularly a company like tesla which is well known for scaling rapidly.

> I encourage you to read up on Lean Manufacturing and just-in-time delivery, which swept the US in the 1980s.

These are only efficient when you are pushing all your externalities on the other guy. Tesla doesn't globalize their supply chain nearly as much as other manufacturers, which would explain the stock of machinery.

> Hating on billionaires - so hot right now

People don't hate the billionaires, they disapprove of a system structured to allow some people to acquire vast wealth on the order of billions while large numbers struggle with the basics like healthcare, childcare, education, and housing, while that system pays lip service to their struggles while doing little to change it.

Western European countries, Japan, South Korea, for example, have billionaires, and many 100-millionaires, but do a much better job providing universal benefits.

Hating on billionaires is hot among a certain constituency. They are the 21st century boogeymen.

The production of armaments is a bit of an economic anomaly, to be honest. All businesses, including arms manufacturers, require a constant flow of business in order to cover their fixed costs and remunerate their investors (debt holders and shareholders). If governments only order weapons when they need them to fight a war, then the arms manufacturers would shut form at the end of a conflict and would take ages to “gear up” again when a new conflict arises, stymying response and lessening the deterrence implicit in having a standing army. Consequentially, it actually makes sense (from a strategic point of view) to keep weapons manufacturers “ticking over” with a constant flow of orders even if that just results in growing stockpiles. One of the reasons that profits are di high for weapons manufacturers is that according to the Capital Asset Pricing Model (CAPM) the rush of a government suddenly cutting off orders during peacetime and rendering the company unprofitable and probably bankrupt needs to be offset by high dividends in the here-and-now and with low historic volatility.

Now, I’m not saying I support this, far from it, but that’s (one of) the rationale(s).

To be fair, they've just massively upgraded the M1s to where they're nothing like the original tanks at all:

https://nationalinterest.org/blog/buzz/armys-new-tank-here-c...

It isn't as though they've been building the same old thing since the 2000s, they've been incrementally and steadily improving them as technology and materials science improves.

One of the problems with entirely ceasing production of a category of incredibly complex military system is that the engineering knowledge to build it retires, goes elsewhere or becomes unavailable.

The UK faced a number of problems with their domestic construction of the Astute class nuclear attack submarines, as they had not built a nuclear sub in more than 15 years. The institutional knowledge of how to build such a thing had become scarce or retired.

Too bad we can’t field them all at once without depleting the entire national reserve of gasoline in 30 minutes :)

Where are all these tabks located?

I read an interview with an NRO scientist, who described his group as following carefully the progress of the Hubble team who were independently solving many of the same problems their teams had solved earlier. From a national security perspective, they had to sit on their hands and not offer any help, but from an engineering perspective, they valued having another team do it to see if they would validate their design by coming up with similar solutions.

I love this story. Reminds me of Contact, one of my favorite movie quotes of all time:

'First rule of government spending: why build one when you can have two for twice the price?'

Unless they also donated launch costs, and $90 million per year to run it[1], it's no surprise that they're not actually using it. It's small compared to the overall budget, but not free.

[1] https://www.nasa.gov/sites/default/files/atoms/files/fy_2018...

Those were mirror and optics/satellite body assemblies, not two fully completed unused spy satellites. The electronics, power systems and communications systems were entirely absent.

I'm sure that they need spares for some of their critical infrastructures, that could be it. Not to say that I don't believe that it could just be unused stuff lying around for years, that could definitely be it too.

I've heard you need to use it or lose when it comes to gov budgets. Anecdotes of jets dumping fuel into the ocean just to come back and refill to keep a budget.

"I wonder what % of purchases go unused for whatever reasons."

the same happens in big companies. W have budget cycles so we buy test equipment when the money is in the budget even at the risk of it never being used. Otherwise you can't buy stuff when you actually need it because at that time the budget isn't there.

Same with hiring people. We are letting good interns go because there is a hiring freeze. 8 weeks later we scramble to find new hires because now we have headcount.

Not sure how to do better but it just shows that planned economies tend to produce waste, be it in a corporation or in a communist state.

Via auction site?

Where from?

The DoD budget is ~$700B, so that's <0.1%

How much does cleaning the bathrooms cost?

It is nice to know the cost, but it shouldn’t be an argument not to perform a critical task for the function of the organization.

While it is whataboutism, it’s saying (in less words) that instead of painting Tesla in a negative light for $50M, the candle should be shining on the government for the billions wasted in the military every year.

I read it as a dismissal of the article because it seems like it was written just for clicks. An article about the government’s waste doesn’t get as many clicks.

> any alternative option is crushed with voter suppression

With early voting, free or very cheap ID for poor people, mail in ballots, and literally a year or more to confirm one’s voter registration, voter suppression is a ridiculous excuse. If people cared about voting, they would do it. I honestly don’t want people voting that can’t be bothered to take the responsibility seriously enough that they allow themselves to be “suppressed.” More voters isn’t the answer: more voters that care about fiscal responsibility is the answer. Many voters don’t care one bit about waste because those voters aren’t paying very much in the taxes that are getting wasted. They want “someone else” to pay. Many voters vote for the “stuff” they can get for themselves.