Is Tesla Motors Doomed to Fail?

In a Bloomberg Technology story titled “Tesla’s Wild New Forecast Changes the Trajectory of an Entire Industry“, Elon Musk projects the sales of Tesla Model 3 to run 500,000 per year, starting in 2018. Very ambitious, but can he do it? As the author of the article points out, the writes, “For context: Tesla has never managed to hit one of Musk’s timelines for a new product launch. Not once.”

What’s behind Mr. Musk’s ambitious sales projections? Is it the cleverness of his designs? Could it be car buyers are hungry for ‘green’ technology? What about pricing? How will the Model 3 fit the budgets of average car buyers? I say the answers to these questions are no, no and no.

Elon Musk, while an exciting entrepreneur whose exploits are legendary, the truth is his successes have been paid for by your tax dollars, BORROWED tax dollars. He rushes his sales and production schedule to capture a government-subsidized market.

the scramble for subsidies
Government subsidies are anathema to a free-market economy. When foreign governments subsidize their manufacturers, American business owners cry ‘foul’. So, if we do it, it’s okay?

What happens to Tesla sales AFTER the subsidies end? How do the $7,500/car subsidies affect the federal budget?

Do the math. 500,000 vehicles per year X $7,500 = $3,750,000,000 additional national debt added the first year.

The Bloomberg article compares Henry Ford’s Model T to the Elon Musk Model 3. Is this a fair comparison? Henry’s success came from efficient production. Mr. Ford’s Model T was a resounding success because it was truly aFORDable without government subsidies.

My prediction: Chevrolet and other automobile manufacturers will produce competitively priced products BELOW the Tesla’s sticker price, particularly after subsidies end.

The fact that Elon Musk’s ambitious projections have never materialized in the past and the fact highly competitive auto makers will flood the market with high-quality, low-priced electric and hybrid vehicles, Tesla Motors is doomed to failure.

John White
Rockwall, Texas

 

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