By on January 30, 2016

Elon Musk

The automotive and tech blogs are aflutter Saturday with news that Elon Musk has gobbled up another chunk of Tesla stock — this time at a discount.

Musk exercised and held a stock option this week that saw the multi-billionaire increase his ownership of Tesla Motors by 532,000 shares. In total, those shares are worth over $101 million as of the last closing price of $191.20/share.

Here’s where the discount comes in: Musk’s option dictated a price pegged to the share value as of Dec. 4, 2009, before the automaker went public, of $6.63/share — or just over $3.5 million.

Sounds like Elon got a stellar deal. But does any of it matter? Is owning 1/5th of Tesla a big deal?

Surely, picking up many fistfuls of shares at a discount and paying out of your own pocket to hold those shares is noteworthy; Musk is $50 million lighter now thanks to the taxes and fees associated with the decision to hold.

And yes, this does increase Musk’s ownership of the company to 22 percent — or a rounded 1/5th, as one outlet is reporting today.

Yet, there are 130.95M Tesla shares outstanding, according to the most recently available numbers. An extra 532,000 shares is a drop in the financial bucket in comparison. To be precise, it equals 0.4 percent of the total outstanding stock volume. This isn’t a massive increase in ownership.

Also, if those 532,000 shares are 0.4 percent of the total outstanding stock, and 22 percent (Musk’s current holding) minus 0.4 percent (what Musk just bought) equals 21.6 percent (what Musk owned before the purchase) … why is AutoBlog reporting Musk now owns 1/5th of Tesla? Musk already owned 1/5th — erm, 21.6 percent — of Tesla Motors.

But hey, it sure makes for a great headline on a slow Saturday.

[Note: To be fair to AutoBlog, the “one-fifth” myth started at TechCrunch.]

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85 Comments on “So Musk Now Owns 22 Percent of Tesla, But Does It Matter?...”


  • avatar

    I personally feel every rise and fall of TESLA stock .
    Everyone insists that I should dump it but I try to remain enthusiastic and I try to avoid hitting the panic button .

    I had hoped that it would hit $300 per-share so I could dump it all but I can see at this point that’s never going to happen.

    I’m not even sure if it will hit 280 again .

    • 0 avatar
      tnk479

      As a current shareholder do you have any concerns that the CEO is scaling up the company too quickly over way too much geography and taking on too much leverage and risk in the process? Are you concerned that he is willing to risk it all to push BEV’s into the mainstream too soon versus taking the company to profitability?

      I got out of it. I was hugely unhappy with the decision to enter the China market and build the “Gigafactory” and I fear that the CEO is too much of an ideologically driven gambler who cares too much about making a name for himself in history and little for shareholders. I don’t care for his style where he won’t answer simple questions in a straight forward way. It’s insulting not to release monthly sales by country and give the reason that shareholders and investors are too dumb to correctly interpret the numbers.

      Regarding the China decision, I’ve always felt it was critical to sell into a more concentrated geographic area where they could build up density of charging points to a critical mass such that owning a BEV would begin to be no less convenient than an ICE powered vehicle and thus, create a self perpetuating cycle of increasing sales in a smaller geographic area. As you concentrate more Superchargers, you open up the number of people willing to consider and buy the car. You then get the Apple iPhone effect where other businesses wanting to attract your high end, wealthy customer base begin catering to them sooner by wanting recharging infrastructure present in their businesses like stores and malls. By going to every corner of the earth they are spreading out their infrastructure too thin.

      On the Gigafactory, I was against getting into the low margin, slow innovation business of batteries. Tesla’s success always hinged on making a cool, new car and brand that did things differently, not on making commodity batteries. They’ve already done that with commodity laptop batteries made by Panasonic. Every other automaker on Earth is using the supply chain to source batteries because that’s the obviously better business decision. Tesla should be focused entirely on building great, aspirational products consumers desire and scale the company in a profitable way over the coming decades. Why take on so much debt and burn so much cash to rush out lower margin, cheaper cars? They’re different enough by selling only BEV’s, doing direct sales, shipping software over the air, and interactively improving the car in small increments versus the big model changes every 6 years.

      • 0 avatar
        tnk479

        And furthermore, were I still a shareholder I would definitely cash out here as the Model X looks shaky to me. Bulls point to the reservation numbers and claim that it is sold out through the middle of 2016. Let’s see. The design decisions are too radical, it lacks practicality, and the cost is too high. The fanatics will buy it but I don’t think the numbers are there. I am predicting Tesla sells 65,000 vehicles globally in 2016 and that will reflect another year of slowing YoY growth that is spread over way too much geography with way, way too much cash burn on what will be low margin projects in the future. We shall see though. A lot could happen either way and given the skill and drive of Tesla employees, I wouldn’t count them out.

      • 0 avatar
        mcs

        @tnk479

        Why do you think you need to build up a density of charging points? Public charging is more of an intercity thing. On trips of less than 100 miles (I actually drive an EV and put about 22k miles a year on it) I really don’t even need public charging nor do I really need fast charging.

        You also seem to think that owning an EV is less convenient than an ICE vehicle. That’s not true. No oil changes, no exhaust maintenance, and numerous other little ICE maintenance issues to deal with. You can even warm up the cabin when the car is in an attached garage. Best of all, you don’t have to take time out of your day to stop some place to fuel it. It’s fueled at home and fueled at the office, so it’s almost always ready to go.

        Battery technology innovations in both materials and manufacturing processes are moving quickly, but it there seems to be a 4-5 year time period between pilot production and full mass production based on the companies I track.

        • 0 avatar
          Big Al from Oz

          mcs,
          What about the waitress paying state taxes to subsidise your good middle class choice?

          Is this fair? I’d say you can afford to pay for your vehicle yourself without any taxpayer handouts.

          Would you have bought this vehicle if it was priced at a true market value?

          Not many would.

          So, I believe that EVs are not what is needed yet.

          We need to explore and maximise existing technologies first and gradually develop alternatives.

          There are many ways to reduce CO2 and climate change without socialised private transport.

          Why not build a comprehensive natural gas infrastructure in the NE and Rust Belt states first?

          This will positively reduce CO2 more than EVs and create more jobs. Increase real consumer spending power without as much taxpayer input.

          The biggest advantage of what I state is the money will come rolling in for decades to come increasing employment even further.

          • 0 avatar
            heavy handle

            Big Al,

            I’m not convinced that a relatively small tax credit has made much difference in Tesla’s sales. It is a $100,000 car, after all.
            Tax credits surely have made a difference for the cheaper EVs like the Leaf and the Volt.

          • 0 avatar
            Big Al from Oz

            heavy handle,
            Tesla isn’t the only hybrid and/or EV manufacturer.

            Tesla doesn’t deserve on cent toward the sales of it’s products as they are aimed directly at the more affluent.

          • 0 avatar
            nickoo

            Oh give me a break big al. I don’t even need to get into global warming debates to make you look like the fool you are. You holier-than-thou right wing free market anti-subsidy ev crowd sicken me. You want to completely ignore the external costs and geopolitics of oil including the millions who have breathing issues and who live in cities that are filled with smog. You want to completely ignore the environmental disasters of oil spills, fracking, shale, and tar sands and the trillions spent on wars in the Middle East and the instability worldwide because of it, including worldwide terrorism and yet you sit here with a straight face and talk about a few thousand dollars of tax breaks on an EV given back to someone who already paid in. It’s probably the best tax subsidy ever. When you start paying for the true cost of oil, you can preach about “free markets” and how unfair it is someone gets a tax break on an EV. I paid the cost having spent 15 months of my life in Iraq fighting so corporations could steal their oil. It wasn’t worth it and never will be.

        • 0 avatar
          tnk479

          It is inconvenient. Can I take a Tesla around the countryside for wine tasting? Not without some exceptionally careful planning and even then, not really. Can I head to the mountains to a weekend cabin? Well, not really unless I pick the destination around a Supercharger highway junction and even then with the cold weather performance being so poor, it will be very risky. If you define convenience as being able to get to work and back in a BEV, no doubt that has been achieved. It’s all the other things one does with a car that’s not so convenient.

          Tell me what exactly is exhaust maintenance? I’ve seen the ICE inconveniences diatribe a hundred times in articles and comments on Seeking Alpha where the Tesla debate rages hard and often. It falls flat with me. Modern ICE vehicles are incredibly low maintenance. BEV’s still have tires, brakes and windshields that need washer fluid so it’s not zero vs. a lot. I take my BMW to a dealer every 6 months for 1 hour and they handle everything. Easy. Frankly, it’s an excuse to get out of the office and go look at some new sheet metal so I hate to admit it, but I kind of like it.

          22k miles a year on a BEV? That is impressive. You surely must have a Tesla, yes?

          In the past the lead time on a lab innovation to mass production was much more than 4-5 years. Will demand for BEV’s speed that up? I don’t know. Massive increases in demand for battery powered consumer electronics created tremendous demand for innovation in lithium ion batteries and they’ve hardly improved only very slowly and steadily over 20 years.

          • 0 avatar
            Big Al from Oz

            nickoo,
            I’m not as far to the right as you are stating. I have never stated climate change isn’t occurring.

            I’m an Economic Liberal, we don’t support monopolies or any unfair competitive practices.

            That’s why I dislike Unions and overly large corporations.

            I suppose you consider the US should be spotted points at the Olympics as well, this is not different than spotting companies in lieu of others.

            I don’t believe in the use of taxpayer money for private enterprise.

            What is occurring is the government with it’s subsidies is allowing only a select group determine what is the best solution to resolve climate change.

            All should be able to challenge and compete, not just some select organisations.

            As I’ve stated here somewhere, why not utilise existing technologies to maximise climate change, ie, natural gas instead of oil for heating and power generation?

            The money that is handed out ends up feathering the people who have enough money to pay for their beliefs, ie, buying an EV or hybrid.

            Why should my niece who’s a waitress pay additional taxes to support those who have money when she has a seven year old to put through school, feed, keep a roof over his head?

            I do think you are the selfish ignorant one, who’s only interested in yourself with little empathy towards others in your country full of disparity.

            Do you know in the US at least 25% of people live with a standard of living equivalent to a developing nation?

            Is this a right wing attitude. I believe in a realistic minimum wage and not to have begging waitresses at my table because they get paid $2.74ph.

            I believe in public health. I believe all should be able to have a crack at tertiary education.

            But, I do realise using my “right wing” attitude the only way this can occur is through progress and fair competition.

            Why should any private company be given a free hand? This creates false markets, ie, EVs and hybrids.

            When the time comes for these vehicles private industry will rise to the occasion, until then it’s just a waste.

            In reducing CO2 start with the biggest emitters and remove them first.

            As someone has already stated tax fuel as a means to reduce CO2, put a price on CO2.

            Use nuclear energy, use more natural gas.

            I do think the likes of yourself who consider yourselves the “left wing elite” are the problem with most any country. You guys are on par with that dickwick Trump and his other neanderthal supporters.

            Use some common’fnckin’ sense.

            It seems I believe in freedom and the American way much more than many Americans like yourself who are as arrogant as the French. Socialist Elitists.

            I’m an individual with independent thought I don’t need to be a sheep or even a “brand fan” like some who comment on this site.

            I can fulfill my life without wearing Raybans and having to drive “Brand X” wearing brand X clothing.

            I’m glad I’m free living in one of the freest countries in the world.

        • 0 avatar
          Lou_BC

          @MCS – what is your parking fee at your workplace parking lot? I’m also curious as to what kind of weather you operate in?

          The operation of a BEV is contingent upon charge points and range between them.

          At my place of work the electrical outlets are only on 20 minutes out of the hour to save on electricity during the winter block heater months and are turned off the rest of the year. Any of the public pay parking lots do not have outlets for anything other than maintenance workers tools.

          In my part of the world a 100 – 135 mile range would get me to the next town and then I would be trapped waiting for a recharge. BEV would be a strictly in town car. I guess I could tow it to the next town with my pickup.

          Dense urban areas in temperate climates are currently the only place they make sense but if more of them come into service who is going to foot the bill for the electricity and infrastructure? That is the billion dollar question.

          • 0 avatar
            JimZ

            yeah. I was considering a Focus EV now that I have a garage and the ability to have a 240VAC circuit installed, and that my employer has put in accessible charging stations. But as soon as they did that, a lot of the management lessees got PHEVs so by the time I get to work they’re all taken.

        • 0 avatar
          jpolicke

          When was your last ICE car built? 1970? I’m trying to think of all the inconvenient service I have to perform but I’m not coming up with much. Most of the time I spent on older cars was ignition related. Thanks to coil-on-plug ignition there’s no annual cap and rotor replacement, no timing to set, no wires; points went away even before that. Every 5k I spend half an hour changing oil and topping off fluids. Big deal. The last exhaust maintenance I had to do was replacing the cat on my tC at 116,000; the tough part was cutting through the pipes because they were still so solid. There’s a good reason why muffler shops went full service – there isn’t enough exhaust work out there to survive on anymore.

          You don’t spend part of your day filling your EV because you can’t, even if you needed to. Your having the option to charge at work is also a fantasy for the vast majority of us who are happy to be able to park somewhere that is paved and free.

      • 0 avatar
        Turkina

        @tnk479 China seems to have more motivation towards reducing vehicle pollution (even if it is a token gesture) than the US. Of course there will be assorted BEVs from Geely, Chery, et al., but the high end market is Tesla’s to take. If the bureaucrats and rich want an ICE auto, they get Audis… so why shouldn’t Tesla play a longer game and get entrenched in the luxury BEV market in China? Tesla will then have a better position to effect their desired changes/standards worldwide if they are in the growing Chinese market.
        caveats:
        Chinese economy isn’t looking terribly robust at the moment.
        Possibility of the ruling party to give a big FU to foreign electric cars.
        Overexpansion.

        • 0 avatar
          Big Al from Oz

          Turknina,
          I think the Chinese motor vehicles contribute a very small amount of emissions into the air in comparison to the up until recently one coal powered generation plant coming on line every month for the past decade or two.

          The inefficient and lax regulations controlling the Chinese steel mills, etc.

          The Chinese are pushing EVs to compete against the West.

          Like TVs, fridges, washing machines, etc where are all of the electric and componenets for EVs going to be manufactured?

          The USA?

          The motor vehicle will become an electrical appliance.

  • avatar
    Big Al from Oz

    The biggest problem I see with Elon Melon’s company is it is heavily reliant on socialist handouts, rebates, subsidies, etc.

    A country can’t base it’s economy purely on taxpayer funded business and hope to succeed.

    Tesla can’t manage without being propped up.

    What is the true value of the company if the taxpayers money were to be removed.

    I believe he owns 20% of very little and he isn’t “to big to fail”.

    • 0 avatar
      tnk479

      I had to chuckle recently as Solar City shares went vertical on the announcement that Congress extended home solar subsidies for a couple more years in the recent budget deal. Similarly, Solar City threatened Nevada with layoffs when Nevada PUC decided to switch to policies that lifted some of the subsidy that home solar users were receiving.

      Also look at Georgia BEV sales which are off something like 90% from the high point when Georgia rolled back their 5k subsidy.

      You can see how the governments support pretty directly impacts their business performance. Tesla and Solar City and their fans howl about how they are saving the world and thus should be subsidized. I find it a curious argument. At the end of the day they are still selling products that enable a comfortable, high impact living. I mean who is to say that large 7-passenger luxury vehicles are saving the environment more than other strategies like living close to your job and walking to work. Environmental corporatism is interesting. They’re saying – keep living your capitalistic, western lifestyle and don’t worry, as long as you subsidize our unprofitable business models we can sell you products that lessen the guilt. It’s all a sham. If we really care about preservation the environment defined as lessening human impacts, we’d go back to living like Native Americans. We of course won’t do that. I don’t see any loud mouthed, highly opinionated environmentalists forming tribes and moving into adobe’s and tents do you? No, they’re living the good life making professor salaries and living in 3,500 square foot mansions and flying around the world to conferences on jet aircraft.

      • 0 avatar
        Big Al from Oz

        tnk479,
        Elon Melon is basing his Gig Factory on the fact that EVs will be socialised for many years to come.

        The problem I foresee is we the taxpayers can’t subsidise an entire industry for decades as ICE vehicles are wound down.

        EVs will never be as cheap to manufacture as ICE vehicles, even diesels.

        Sooner or later Elon Melon will need to stand on his own two feet and stop being a welfare recipient.

        As for the environmental issue, I do believe climate change is occurring, but we will not make the necessary changes to reduce eventual impacts of climate change.

        As you mentioned the large corporations are not going to allow this to occur. They will cry and scream on how relevant and necessary their businesses are for a country and society.

        I say let these industries fall and replace them with viable, profit making businesses.

        I do read many comments on TTAC regarding the handouts given to the auto industry as necessary to provide employment. Then the same people state look at the profits because of these handouts.

        If these businesses were profitable like many claim, why the handouts?

        • 0 avatar
          mcs

          Actually, Teslas $7,500 dollar subsidy is going away. Once they reach a certain production number it’s gone. I think Nissan is close to losing theirs as well.

          I also think oil subsidies should go. We have plenty of oil at this point, so no need for taxpayer cash. Furthermore, not a single tax dollar should be spent on hydrogen fueling stations.

          Note: the $7500 Fed subsidy gets phased out after a manufacturer produces 200,000 vehicles.

          • 0 avatar
            tnk479

            Regarding oil subsidies, beware of the famous study from the IMF. As you dig into the details you will see their headline number is totally bogus and useless. No intelligent person should bother with it.

            Also regarding oil subsidies, it seems to me that the oil glut we are in now represents yet another financial bubble caused by Zero Interest Rate Policy (ZIRP). The Fed continues to believe it can pull its levers and control the economy for stability and growth but they seem to be blowing up one bubble after another. We’re awash in too much oil at least in part because too much ZIRP subsidized financial investment went into going after high cost shale oil which is now going bust in spectacular fashion.

          • 0 avatar
            tnk479

            mcs, I am curious how exactly the government plans to phase out the credit. In a given tax year, how does one figure out of they are the 200,000th purchaser of a particular manufacturers qualifying EV in order to correctly calculate the deduction?

            What if tomorrow a mad scientist creates a way to convert solar energy into hydrogen fuel so efficiently that it becomes a viable, salable means of transportation fuel? The point of my question is, it’s risky for government to pick the winners based upon expert bureaucrats in various boards who attempt to steer the direction of business through policy. Far better for them to consider the bigger issue of, how much CO2 is safe and regulating that and leaving it to the market to figure out the rest. Of course, no one knows how much CO2 is safe and they are at best making a kind of sort of sciencey WAG (Wild Ass Guess).

        • 0 avatar
          tnk479

          Big Al,

          Subsidies for particular propulsion approaches side steps the real debate. All BEV subsidies were justified on the grounds of increased CO2 concentration from burning of fossil fuels leading to catastrophic climate change. So if you accept that CO2 has to be controlled then the only regulation that makes any sense is a tax on CO2 emissions. Subsidizing BEV’s surely is an fools errand that attempts to keep things largely as they are while applying a tech band aid. There is an entire universe of other ways to live besides the Applebee’s America we live in today.

          Assuming the hydraulic fracturing is safe (US EPA says it is, environmentalists disagree vehemently) then natural gas is absolutely a way to lower CO2 emissions and in fact it already is.

          The trillion dollar question: how much CO2 can we safely emit without causing catastrophe? How overblown are fears and can we not adapt to the changing climate for much less than the cost of forcefully changing society? No one really has the answers and the people that claim to are all blowhards.

          • 0 avatar
            Lou_BC

            tnk479 – In Northern Alberta there has been earthquakes that some are attributing to fracking. Is fracking safe? The answer, like most environmental and politically charged debates depends on which side of the isle you stand.

          • 0 avatar
            28-Cars-Later

            I’m gonna go with, no.

        • 0 avatar
          healthy skeptic

          @Big Al

          >> Elon Melon is basing his Gig Factory on the fact that EVs will be socialised for many years to come.

          My understanding is that the opposite is true. Stream-lining the battery manufacturing through vertical integration is intended as a way to get costs down. Presumably, that includes counter-acting the eventual removal of these subsidies.

          >> The problem I foresee is we the taxpayers can’t subsidise an entire industry for decades as ICE vehicles are wound down.

          Is anyone seriously proposing subsidizing EVs for decades? IIRC, current federal subsidy ends around a manufacturer’s 200,000th EV produced. Tesla might well hit that threshold in a couple of years.

          >> EVs will never be as cheap to manufacture as ICE vehicles, even diesels.

          How do you know this? Batteries are the most expensive component, and their price continues to fall. Furthermore, the supply chain and economy of scale for EVs hasn’t even really cranked up yet. ICEs, after 100 years of optimization, are as cheap as they’re ever going to get.

          • 0 avatar
            heavy handle

            >> EVs will never be as cheap to manufacture as ICE vehicles, even diesels.

            “Color photographs will never be as cheap as black and white” – Ansel Adams, 1950s

            “I think there is a world market for maybe five computers” – Chairman of IBM, 1940s

      • 0 avatar
        Lou_BC

        If we really care about preservation the environment defined as lessening human impacts, we’d go back to living like Native Americans.

        Ah yes, the ever pervasive green myth of the noble environmentalist savage.

        Conservationism was driven by a need to survive more than an altruistic need to save nature. Google Buffalo Jump for example.

        tnk479 – good post by the way.

        Climate change may very well force us into conservationism just like First Nations were forced into it.

      • 0 avatar
        Brett Woods

        The Tesla isn’t good for going wine tasting, and anyway if I cared about the environment I would live in a wigwam? You sound like an idiot.

        • 0 avatar

          Brett Woods

          +1

        • 0 avatar
          tnk479

          Actually, you’re taking my statements and recombining them out of context to try and imply that I am an idiot. You must work in politics or big media. If not, you should. You have the basic skills for it.

          If you drive into rural areas for whatever reason, you will not find Tesla Superchargers. They are largely stationed off of Interstate highways to help travelers with long distance road trips. They aren’t stationed throughout the countryside. Please consult the Tesla map of Superchargers. What it means is you need to leave home with a full charge and plan your trip very carefully, with margin for error, to insure you will be able to make it to a recharging point that you can use. BTW, there is very few recharging points in rural areas. I am speaking of the present. Certainly it’s within the realm of possibility that in 20 years EV charge points dot the landscape.

          Subsidizing BEV’s versus other ways to reduce environmental impact is a form of corporatism. I live in an urban apartment and walk to work meaning day to day I emit zero CO2 and other pollutants. Do explain why I have to subsidize your BEV car so you can drive dozens of miles between your job and home. There are dozens of ways to make this point. BEV’s are a very specific form of environmental technology. It’s sexy because its fast and looks cool and it enables the wealthy to continue living their high impact life with less guilt (I suppose). Walking to work isn’t sexy so no one cares and no one will subsidize it. Converting roads to bike lanes is not sexy. There is no justification for BEV subsidies and it’s appalling that the wide majority of the dollars goes to the wealthiest 10%.

          Ask yourself this: would you be willing to subsidize wealthy peoples first class jet tickets in order to encourage them not to fly on private jets in order to lessen environmental impacts? That just sounds absurd doesn’t it? Subsidizing luxury BEV’s is totally analogous.

          And yes, the majority of BEV’s sold in the US today are luxury cars. Don’t make the roll out the numbers.

          Try to be less of a prick.

          • 0 avatar
            healthy skeptic

            @tnk479

            Agreed on the superchargers.

            For the rest of your post, I live in a urban apartment like you, and I get to work by a combination of ferry plus kick scooter, yet I do not share your animosity towards BEVs. Around Oakland, we have BEVs, *and* we have bike lanes, walkable communities, etc, designed and built with tax dollars. I didn’t realized BEVs somehow had to be mutually exclusive with those others.

            For your air travel analogy, let me put it this way: if subsidizing wealthy people as early adopters of some innovation could eventually make all air travel less polluting…then of course I would support it! Sure, 50,000 Model S’s aren’t going to save the world, but they’re a step towards a global fleet of BEVs and electric hybrids paired with an ever-greening grid. I think that’s the larger point here.

            As for majority of BEVs sold being luxury cars, I looked at the numbers. I guess that depends on whether the BMW i3 counts as “luxury.” I supposed technically it does, but personally I think of it as a glorified, overpriced Nissan Leaf. I’d far rather have a stripped-down Tesla.

          • 0 avatar
            tnk479

            @healthy skeptic

            In what world is a 45k BMW not a luxury car?

            I have no animosity towards BEV’s. I think the Model S is pretty cool. Why would you say that? I don’t agree with use of tax dollars or tax incentives to pay for part for luxury cars for wealthy people. There are so many better ways to spend that money, for the environment or for society.

            I understand what the policy is aimed at achieving but it’s bad policy. CO2 is the real reason behind it all and the policy debate needs to be about CO2 – everything else is a distraction or a corporatist ploy. Once society agrees on how much CO2 it is willing to allow, then the market can be left to figure out the rest.

            I suppose another analogy would be tax breaks for people that buy a new sort of private jet that is more fuel efficient or somehow emitted less CO2. The only difference would be instead of the benefits flowing to the top 5-10%, they would flow to the top 1%. This is not a good deal for taxpayers. There are many ways to shape policy to change emissions. This is the worst possible approach. You’re out of touch if you favor such a policy. I hold zero animosity towards honestly earned wealth but there is no reason for the public to subsidize the extreme luxury of private air travel or private luxury sedans.

    • 0 avatar
      JimZ

      as little as I care for Elon Musk, that argument should fall flat since two of the three domestic automakers are only still with us because of the federal government.

  • avatar
    RideHeight

    tnk479 is way too smart for this discussion. Let’s vote him off the island. Or find a pot and cook him.

  • avatar
    jthorner

    Nobody cares about the nuances who owns how much Tesla stock and why.

    As others have pointed to, the big question visa-vis Tesla is if it can survive the jump to playing in the big times and without government subsidies. Eventually those $7500/vehicle tax break for rich people buying luxury cars are going away. The automotive industry has a lot of smart players, and Tesla isn’t the be all and end all of innovation.

    I’m shocked Tesla has gotten this far (eat your heart out Malcom Bricklin and John DeLorean), but the story is far from over.

  • avatar
    Hogie roll

    He’s about to sell.

  • avatar
    Hogie roll

    I’ll short anything BTSR owns.

  • avatar
    swester

    Looking at it from just a consumer product perspective, I think the bigger issue is that Tesla is losing the “cool” factor coincidentally at a time when gas prices are nice and low.

    First gen Teslas are already looking sort of…dated. And apart from a select group of elite buyers who needed to own one basically just to brag at parties, who in the mass market was ever really interested in an expensive electric vehicle with a TON of limitations?

    I can’t think of a single situation where someone shopping on an actual budget would consider a Tesla in a sea of other options (which will only continue to ramp up, at lower price points and from more well-known badges).

  • avatar
    ClutchCarGo

    I’ve started to think that Musk is playing a longer game than autos. It seems like Tesla cars and the Powerwall are both efforts to establish a bigger market for batteries, and the Gigafactory is the end, not the means. If he can get battery demand snowballing by demonstrating mass market applications and get other mfrs into the game, he can be the most cost-effective battery provider to a burgeoning energy storage market.

    • 0 avatar
      Pch101

      If you take Musk’s rhetoric at face value, then he is betting against fossil fuels, hence his bets on batteries, battery-powered devices and solar power.

      I suspect that the Gigafactory is intended to push down per-unit vehicle costs while creating a second source of revenue that could make the company profitable. I’m a Tesla skeptic, but if you’re going to be trying to profit from these things, then that’s the smart way to play it.

      • 0 avatar
        ClutchCarGo

        Yes, I think that he’s betting on alternative energy and against fossil fuels, but not just solar. Virtually all forms of alternative energy require a storage medium to match up supply and demand. His Gigafactory could provide that storage, but he needs to demonstrate a wider scale and more immediate need to justify the investment. Tesla cars and home/business storage could do that, especially if he can lure other mfrs into the market so that he can supply batteries.

      • 0 avatar
        JimZ

        Batteries aren’t fuel.

  • avatar
    Dan

    Crony capitalist government isn’t going away anytime soon. Elon Musk is buried in ours like a tick.

    More battery factories to nowhere, here we come.

  • avatar
    craiger

    I find it hard to understand why anyone would invest in Tesla stock. Note that I say invest, not trade.

    How anyone can justify a US$25 billion market cap is beyond me. That’s more than double the size of Mazda. GM, Ford, Honda, and BMW are each between 45 and 50 billion.

    If EVs were to really catch on, Tesla would find itself competing against every.car.company.in.the.world. Let that sink in.

    • 0 avatar
      JimZ

      have you seen some of the insane corporate valuations in the tech sector? King Digital was valued at $8 billion because they put out *one* game (Candy Crush) which was nothing but another “match three” game like Bejeweled and a ton of other spins.

      • 0 avatar
        redmondjp

        Yes, whatever you do, don’t look at the P/E ratio of Amazon; your head may actually explode.

        • 0 avatar
          craiger

          The difference is that with tech companies you’re paying for growth. Amazon, Cisco, Microsoft, Google, and hundreds of others have each demonstrated dramatic and sustained growth since their founding. How many startup car companies have done that? How many have even survived? Apples to bananas.

          • 0 avatar
            JimZ

            Yeah, how’d that work out with Zynga? It’s like nobody remembers the first go-round (the “dot-com” bubble in 2000.)

            Besides, your counter examples aren’t since they all do a hell of a lot more than sell one smartphone game.

  • avatar
    05lgt

    I’ve got to agree with the story, this is a non-story. If Musk didn’t exercise available options, that would be news. This?

  • avatar
    Big Al from Oz

    I wonder how many Gigafactory batteries will make it into automobiles?

    It seems Elon Melon is targeting homes. Another form of welfare for himself.

    Elon appears to be similar to one of what is termed “housing commision” types. That is he will live his entire life on welfare.

    http://www.news.com.au/technology/innovation/design/first-residential-tesla-powerwall-installed-in-sydney-suburb/news-story/01f781cf4e4350950e6d90464a095bc6

    • 0 avatar
      tnk479

      What’s with calling the CEO ” Elon Melon”? I don’t get it.

      The “PowerWall” battery business is odd. At first blush, I figured this will be sold as a part of a package by Solar City – then Solar City says that is not the case. They aren’t partnering with any other home solar so I’m lost and the CEO isn’t providing any additional info. On the quarterly conference calls, CEO claims there is huge demand but seems to be conflating reservations with people that filled out a web form with no deposit or commitment to buy. I filled it out but have no intention of buying a PowerWall anytime soon. No one has emailed or called to follow up either. At current electricity prices the thing makes no sense.

      • 0 avatar
        Big Al from Oz

        tnk479,
        As for my rhyming terminology. Rhyming slang as we call it is quite common in Australia. I went with my step brother, who is a soccer coach to watch a Ruby Union game between Canada and the US.

        Many Australians are on the US team and when we talked my step brother stated he couldn’t comprehend how and what we were discussing.

        Read this link and you’ll understand why I call Musk, Elon Melon.

        http://alldownunder.com/australian-slang/dictionary-rhyming.htm

        I read an interesting article relating to the gradual independence from the engergy grid future home owners will have.

        The discussion covered who pay to support existing infrastructure, obviously driven by large corporations to taxing homes on energy use to subsidise those energy comapanies.

        Solar power is becoming quite common here. To intiate interest in the solar power industry most state governments paid/subsidised the homeowners or as I like to call them retail energy rates for their production.

        Now the governments are wondering how to pay all of these subsidies. The homeowners are now stating they only invested in these solar systems because of the price paid back to them for their energy generation.

        This is another reason why I don’t support subsidisation. In the end the taxpayer is fncked over, irrespective of the “good” intentions of these subsidised schemes.

        Big energy is worried about all becoming independent generators of their own energy, this worries governments as most governments have their fingers in the energy industry.

  • avatar
    craiger

    If I had money to burn, I’d buy a P90D with the Ludicrous option. They did an amazing job with the car. Considering they’re a startup, it’s positively astounding. I’d never but the stock though.

    • 0 avatar
      JimZ

      They’re over 10 years old, have long since gone public, and have launched their third car. How are they in any way still a “startup?”

      • 0 avatar
        mcs

        In an industry where there are companies that have been around for over 70 to 113 years, 10 years is a relative startup.

      • 0 avatar
        craiger

        Tesla has founded in 2003. In comparison, 13 years after it was founded, Ford sold 577,000 cars. Tesla sold 17,000 cars last year.

        I won’t argue over how long a company needs to be in business before it can no longer be considered a startup. Tesla designed an amazing car while it was still a startup. Whether or not it’s still a startup is immaterial. They achieved something incredible and deserve to be recognized for that imo.

        It’s still highly unlikely that Tesla will survive, for two reasons.

        First, the total addressable market for pure EVs is arguably small. Is this likely to change over time?

        Second, Tesla does not have a defensible moat i.e. any of the existing car companies could bring a pure EV to market whenever it sees fit to do so. Tesla does not hold any patents significant enough to give it a meaningful edge. Tesla can not benefit from the economies of scale that the big players can, so it would be trivially easy for them to undercut Tesla on price.

        I still want a P90D. I just don’t want the stock.

        • 0 avatar
          mcs

          >> Tesla sold 17,000 cars last year.

          Actually, they sold over 50,000 cars last year.

          >> First, the total addressable market for pure EVs is arguably small. Is this likely to change over time?

          With low-end EVs reaching 200-240 mile range, the potential market will increase substantially. I put about 22k+ per year on my EV now, so even high mileage drivers should be fine with the next generation of EVs.

          Battery prices are dropping and will drop faster now that some manufacturers have made some substantial improvements in the lithium battery manufacturing process. So total cost will come down.

          ICE costs are going to start going up. Over the next few years, governments are going to start going after gasoline particulate matter emissions, so who knows what that will do to driveability and costs.

          When people start cross-shopping smooth quiet electrics vs. buzzy turbo 4s, it’s not going to be a contest.

          >> Second, Tesla does not have a defensible moat i.e. any of the existing car companies

          They have the supercharger network which could be tough to replicate – especially since Tesla has already staked out some of the best real estate.

          • 0 avatar
            craiger

            You’re right, Tesla sold 50,000+ cars in 2015. Thanks for the correction.

            I love the idea of a pure EV, don’t get me wrong. Don’t you think the range anxiety and especially the recharge time will always be a limiting factor for adoption, assuming that the recharge time never gets down to something comparable to refilling a gas tank.

            Are you sure that the supercharger network is tough to replicate? Best real estate how exactly? Retail businesses open up every day of the week. I don’t understand what you mean.

        • 0 avatar
          heavy handle

          “any of the existing car companies could bring a pure EV to market whenever it sees fit to do so”

          That’s what they keep saying: “any traditional book store could sell online and easily beat Amazon.”

          I wouldn’t bet on the existing car companies. Nissan is the only one that’s shown any interest in selling an electric car, and even then the Leaf is heavily compromised in term of range, size and performance. Not saying some people don’t love it, but it’s a small market.

          I think Tesla’s advantage, ultimately, is that they are building a great car that happens to be electric. Everyone else is building a compromise.

          • 0 avatar
            craiger

            Yes but does it make sense to compare the Tesla S to the Nissan leaf, considering the massive price difference?

            I’m not sure how to respond to “any traditional bookstore could sell online and easily beat Amazon.”

            First of all, who is saying this? Second, book sales contribute only 7% of Amazon’s total revenue. Third, this has nothing to do with our EV discussion. Why? Several reasons. Barnes and Noble is the only retail bookseller chain with a national reach in the U.S. They were caught off guard by Amazon in the early days and they haven’t been able to compete. Amazon is a colossus, and B&N is the only potential competitor, and it is weakening. Tesla is tiny, and I don’t need to list it’s competition here.

            Really bad analogy.

          • 0 avatar
            heavy handle

            craiger,

            That’s what people who claimed to know what they were talking about were saying about Amazon back in the day. The exact same stuff gets said about Tesla, while putting-on a knowing air.

            ” does it make sense to compare the Tesla S to the Nissan leaf, considering the massive price difference?”

            Nissan could have built a full-featured electric car, but they didn’t. They built a heavily compromised car instead. The GTR shows that they can build an expensive no-compromise car when they feel the need.

    • 0 avatar
      DownUnder2014

      Yeah me too.

  • avatar
    redapple

    1 more GOVT freebie not mentioned.
    Tesla doesnt make money on the cars they make.
    They make all the profits $ on the EPA Mileage Credits they sell other automakers.

    And dont get me started on ethanol. I will lose my sh*t.

    • 0 avatar
      VoGo

      I just wish the people who call out Tesla for receiving government support would have the honesty to call out the oil and car industries for all the support they receive. Does anyone truly think the two Gulf Wars were about anything other than oil?

      The money spent on sustainable energy and green cars is a drop in the bucket compared to the trillions of dollars wasted, and thousands of lives lost maintaining America’s link to gulf oil.

      • 0 avatar
        nickoo

        The entire DoD budget is about keeping the spice flowing. So much hypocrasy on this site when it comes to EV subsidies. I would think the 1500 per year Lockheed Martin tax would piss off more people than an ev tax break which only reduces taxes paid….but then again anti-ev free market types were never known for critical thinking.

      • 0 avatar
        tnk479

        Or is it about increasing military spending for the benefit of “defense” corporations? Or is it about countering Russia and China ambitions in the Middle East? Or is it about defense of the “petro dollar”?

        It’s hard to say for sure why the US is so heavily involved in the Middle East because they certainly don’t care to have an honest conversation about it with the voters. Intelligent people can at least all agree that it had nothing to do with “weapons of mass destruction” which was all a lie to dupe the people into supporting another war.

        • 0 avatar
          rpn453

          There’s definitely a long-term global power strategy in there somewhere. Probably right near the top.

          Regardless, military control of oil resources is paid for by oil. There is no other energy source that is substantial enough to subsidize the control and production of oil. Whether it is for military or civilian purposes, it is oil that is subsidizing oil production.

  • avatar
    RideHeight

    Poo be upon crampy road rockets like the S and also upon the flapping-turkey X; here’s the EV *I* want:

    http://evworld.com/news.cfm?newsid=23976

  • avatar
    el scotto

    Tesla sells expensive cars to guys whose wives go to Pilates/yoga class and then do lunch. Cool cars? Yes. Cheaper plug-in electric cars are available from other companies. The Holy Grail of electric vehicles will be fleet sales. US Post Office, some UPS trucks, and any small business owner whose trucks drive less than 150 miles a day.

    • 0 avatar
      tnk479

      I once read a very convincing article that argued that due to miles driven per year and other characteristics, hybridizing commercial heavy trucks would yield far more bank for the taxpayer buck in CO2 and emissions than electrifying luxury cars.

  • avatar
    tnk479

    It will be interesting to see how consumers react to being offered far more PHEV models in the next few years. The German manufacturers seem particularly committed to offering PHEV across their entire lineup.

    Toyota proved the viability and reliability of hybrids long ago and are selling their 5th generation hybrid powertrain now.

    For anyone paying close enough attention, PHEV gets 80% of the emissions benefits of BEV’s with none of the range anxiety and limitation drawbacks. And as many have noted, for people in colder weather climates PHEV is the better architecture. Tesla could ultimately be astonished to learn that their planned Model 3 product is not nearly as compelling outside of Miami and the left coast as say a PHEV BMW 330e.

    • 0 avatar
      HotPotato

      PHEVs are a great bridge technology, but they’re just dragging along the dead weight of the ICE, gas tank etc 80-90% of the time. Affordable 200 mile BEVs are here next year, and generic DC fast charging is spreading. Honestly, rather than a PHEV, I’d like to have a 200 mile EV with DC fast charging, and rent an ICE car for the trips—a fraction of 1%—when I’m driving long-distance more than 100 miles from a major highway corridor.

      • 0 avatar
        tnk479

        You must live in a temperate climate. BEV’s are not as great in cold weather climates — oh sure, they can be used but range of BEV’s is much more sensitive to temperature and road conditions as compared with ICE.

        Something that eliminates range anxiety and heats the vehicle and battery is hardly “dead weight” — I would say the two are rather elegant in how they complement each other.

        • 0 avatar
          mcs

          @tnk479 You’re making comments about something you have no actual experience with. Like most armchair experts, you’ve got it wrong. Get some actual experience with an EV. I put 20+k miles on one per year in a cold climate and I don’t have any issues with the car.

          One issue PHEVs have is that you still have the ICE maintenance issues like oil changes, exhaust maintenance, and other hassles you don’t have to deal with when you own an EV. One goal for me was to eliminate those issues.

          I live in New England. I’ve made 50 mile non-stop trips in sub-zero Fahrenheit weather without a problem. Preheating and having a car equipped with a heat pump helps. But, I’m not always making 100-mile trips and most days I barely make a dent in the car’s charge level.

          Ironically, one day when the temps dropped to -4, two co-workers with ICE cars were late due to failed batteries.

          • 0 avatar
            tnk479

            I of course never said or implied that a BEV is unable to make 50-mile trips in sub-zero temperatures.

            https://yourlogicalfallacyis.com/strawman

            I said that BEV’s are “not as great in cold weather climates”. While vague, the basis for that is a Tesla drivers study on the matter:

            http://www.teslarati.com/tesla-battery-range-sub-zero-snowy-conditions/#wTGt5G53WsO2YTm1.99

            The Tesla offers by far the best cold weather performance by the way. Other BEV’s perform even worse.

            ICE vehicles are also less efficient in the Winter but they don’t lose as much range as BEV’s. YMMV quite literally but it’s no coincidence that BEV sales are highly concentrated based on two factors: subsidies and warm climate.

          • 0 avatar
            mcs

            @tnk479

            50 miles is beyond what most drivers commute. If a BEV is useable for a long drive like that, does it really matter that it’s less efficient in the cold? It’s still doing its job.

            Battery technology is changing and Nissan, for example, has been making changes to their batteries and quietly putting the changes into production. In fact, Leafs produced after late January 2014 have very different batteries than before that date.

            So, when you say Tesla has the best, you might be using stale or inaccurate data. That link you posted states a 40% loss for Tesla, but I’ve never seen even a single drop with Nissan’s current batteries that high – although it was really close on the -4F degree day.

            Then again, there are so many factors that effect range in cold temps. I usually run in B mode I usually go from heated garage to heated garage. That means I pre-heat the car and the battery, so I’m rolling out of the door in a rolling sauna with a toasty warm battery. Coldest temps are early in the morning, so to stay awake I like to use seat and steering wheel heat to keep my body warm and my face cool and that has an impact.

            EVs sell very well in Scandinavia and we have plenty here in New England, so I’m not the only person that doesn’t find cold weather performance an issue.

            As far as subsidies go, I’d like to see what ICE vehicles would cost without Federal bailouts, factory subsidies, and what fuel costs would be without government payouts to the oil industry.

            Whatever their flaws, the driving and ownership experience with electrics is far superior than ICE. That’s what ultimately will sell them. I really doubt Model S or Model X sales are driven in the least bit by subsidies. It’s not a lot of money at that income range. What is a factor is that wonderful smooth quiet motor and drivetrain. It’s so sweet. I’m an auto enthusiast and I admit I’ll put up with minor flaws to get a superior driving experience. Charging issues, range, cold, heat, whatever – just give me that drivetrain and low center of gravity. I can’t get enough of it.


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