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Fed Energy Plan Good Car-ma for Tesla Boss

Posted on 07 January 2013 by James Bond

Millions of Americans are bracing for fiscal cliff fallout, looking for jobs, postponing purchases and cutting back on spending. Not so Elon Musk, CEO of Tesla Motors. As the Los Angeles Times noted, Mr. Musk just plunked down $17 million for a 20,248-square-foot Bel-Air mansion with a gym, seven bedrooms, 10 bathrooms, tennis court, motor court and a swimming pool. You can buy a crib like that when your company gets $465 million in stimulus funds as part of President Obama’s green-energy plan.

Tesla Motors is named after brilliant inventor and scientist Nikola Tesla, who came up with the alternating electric current that powers appliances in every American household. But few Americans will be driving Tesla automobiles any time soon. The lowest price for Tesla’s Model S is $52,400 – after the $7500 tax credit. The high-end model is $72,400 and even if buyers have the money not many are available. Tesla produced only 359 cars last quarter. In 1914, nearly 100 years ago, the Ford Motor Company produced 300,000 cars, more than 299 other companies combined.

Tesla makes cars in the United States but that is not the case for the Fisker Karma electric vehicle. The company got loan guarantees of $529 million from the federal government as part of a package with Tesla. Vice President Joe Biden touted U.S manufacturing jobs but the Fisker Karma is made in Finland and shipped to the United States through the port of Newark, where 16 of the luxury vehicles blew up during Hurricane Sandy.

The Fisker Karma has been described as “Solyndra on wheels” and together with Tesla suggests that the federal energy stimulus, though advantageous for Elon Musk, is something of bust for taxpayers and motorists. Not all electric cars are as expensive as Tesla and Fisker models but federal regulatory policy obscures some of their hidden costs.

For example, the EPA requires new-car labels to list the miles per gallon of gasoline the cars achieve. But the EPA does not require electric cars to quantify the environmental costs of the charging source. Neither does the EPA require electric cars to quantify the distance drivers get from charging the vehicle. The charging service is not “free” and the federal government does not pay for it.


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