Tesla Motors inks $100M deal with Toyota
venturebeat.com
venturebeat.com
Granted, I live in Houston, but I do know enough people that I could produce a stack of business cards for any other major industry. In fact, I know more people who build satellites, stealth fighters, or submarines than consumer vehicles.
What is the state of automotive R&D in this country anyway... has the industry been turned over to the marketing department wholesale or am I just in the wrong spot?
It sounds wonderful and high-level. Faced with hordes of competitors from overseas, people in developed economies tell themselves that they excel at higher order skills, like management and leadership, and big picture thinking. This is especially popular with managers. So things like "vison", "systems thinking" and "the big picture" become your priority, not the nuts and bolts.
But in reality, you become like Dell, rather than Intel. In a vertically integrated market; system builders are the kings, and parts makers are small players trying to get their foot in the door. In a horizontally integrated market; system builders compete on margins, while parts builders compete on quality. And competing on margins is a good way to make peanuts.
That was once true.
Since the bailouts, the company has shifted it's focus back to quality. Many more components and parts are developed and manufactured in-house. See battery systems. With this comes an increase in part/component testing and validation, as well as complete control of quality and behavior of the component. IMO, this is the biggest factor in our quality improvements that have saved us boatloads in warranty costs.
The majority of R&D is done in SE Michigan, with additional small labs located around the world. We also do vehicle testing and controls development globally to validate our assumptions wrt climate/elevation/terrain changes. It's true that you won't meet many automotive engineers that live outside of Michigan.
Meanwhile, I love the idea of us selling electric power trains to the Japanese, rather than them selling them to Detroit. Makes me feel like we're doing something right.
And it isn't "us," the Germans and Toyota are equity stakeholders in Tesla.
Good for Germany and Toyota. The tech will be here, they'll be playing catchup, or explicitly neglecting their own tech because they have cheap access to ours.
Taxpayer funded subsidies are like taking money out of your wallet and setting it on fire, most of the time.
Gov't - down money Recipient - up money
Does the mechanism really matter?
EDIT: Hypothetically, let's say the government gave one company a direct subsidy, another a tax rebate, and a third a targetted one-company-only tax break, all for X dollars. You're saying these are substantially different from a macroeconomic perspective? And different enough that a few million in one method is egregious while 50 billion via another method is just how things should be?
To add to this, looking at the upside of the risk:
If the company is successful with a subsidy or a loan, they've first got to make up the raw dollar value of the subsidy (in extra taxes) or loan (in repayments) before additional taxes become an ROI.
If the company is successful with a tax break, they can start reaping rewards right away as (assuming there is some limited taxation involved), tax revenues increase with volume.
However, with either option you're still gambling with public funds and policy and there are many ways to screw the public fiscally. I'm personally against using the tax code for social engineering purposes (punitive, stimulative, or otherwise), and doubly against subsidies in nearly all cases.
like coke and hookers and yachts
I am proud to support Toyota, and the sooner the Big Three are forced to sell out out to "the japanese" the better.
It may be different for line employees, the people I knew worked skilled trades, electrician, hvac, etc.
For heaven's sake, this means Tesla may be turning in the direction of "profitable". Aren't you at least happy about that?
And here I was thinking it's near-impossible to criticize a company that might finally be profitable while creating a new clean-energy car tech hub right here in the United States...
There is no reason the USG couldn't have similarly received warrants as part of the Tesla loan guarantee, or at least a pledge from the insiders not to sell stock until we had been repaid--to better put Musk and his benefactors, you and me, on the same side of the table.
Also, what do you think that future taxable income comes to, discounted to the present at a discount rate that reflects the risk/uncertainty of those cash flows?
We could pay people $400M to dig ditches or paint each others' portraits if all we want is jobs. If private enterprise can't create and sustain the need for that job over the long term, all we're doing is buying paintings from mechanical engineers.
http://www.carsconcepthub.info/images/lotus-elise%20%281%29....
Notice the similarity?
http://www.ausbcomp.com/~bbott/cars/oldsgas.jpg
"Ransom E. Olds was the first mass producer of gasoline powered automobiles in the United States, even though Duryea was the first auto manufacturer with their 13 cars."