Gigafactory

Quote: AZDuffman

Musk Empire has benefited from $4.9MMM in various government subsidies. This doesn't include the crony credits system under which he is getting cash from other automakers..

"The state commissioned an analysis estimating the economic impact from the project at $100 billion over two decades, but some economists called that figure deeply flawed. It counted every Tesla employee as if they would otherwise have been unemployed, for instance, and it made no allowance for increased government spending to serve the influx of thousands of local residents." LA Times article

I love these financial impact analysis papers done by the government. I swear they simply know the answer and write the report to justify it somehow.

It's like the time shifting value of these Powerwall batterys. If a 7kWh battery costs $3000 and you take the insanely optimistic estimate that it can be 100% filled and discharged 3000 times during it's lifespan, then that portion of the process is 7kWh per dollar.The 7kWh per dollar is promoted as comparable to electric energy charges in most states.

But you still have to buy the 21 mWh of power or generate it from wind or solar. While there are "time of use" plans that give free electricity at night, they penalize you with a massive increase in cost during the day. Nobody is giving away 21 mWh.

Quote: AZDuffman

Musk Empire has benefited from $4.9MMM in various government subsidies. This doesn't include the crony credits system under which he is getting cash from other automakers.

Interesting article. It mentioned that the State of Nevada has provided Tesla with $1.3 billion in "incentives" to lure Tesla to build the gigafactory there. (When the Nevada State Senate & House voted on the deal, it passed unanimously: every Democrat, every Republican supported it.) Corporations seeking to build a new factory will sometimes approach multiple states and get the states to compete with each other. Is this in the taxpayer's interest for states to compete for jobs? Tough question. Sometimes the freebies more than pay for themselves in the long run. But not always-- not uncommon for taxpayers get screwed when politicians bend over backwards to see who can hand out the most free stuff to a corporation. Plenty of NFL teams aren't satisfied with a new stadium; they want the taxpayers to build them a new stadium every 20 years!

Kind of silly to criticize SpaceX for these shenanigans. It's an aerospace company! That entire industry (Boeing, Lockheed, Northrup) is built upon government handouts.

Obama handed out $80 billion to Chrysler & G.M. to bribe the swing state voters in Ohio. By that measure, Tesla's $5 billion is chump change. Likewise, if this study is to be believed, (see table 2) the face value of federal loans, loan guarantees, and bailouts received by Chase, Bank of America, Citibank, Goldman Sachs, et al is in the trillions (trillion with a "t", not a typo.)

Quote: Pacomartin

"The state commissioned an analysis estimating the economic impact from the project at $100 billion over two decades, but some economists called that figure deeply flawed. It counted every Tesla employee as if they would otherwise have been unemployed, for instance, and it made no allowance for increased government spending to serve the influx of thousands of local residents." LA Times article

I love these financial impact analysis papers done by the government. I swear they simply know the answer and write the report to justify it somehow.

Sounds about right. One of the financial arguments for the oil pipeline across the Rockies to a northern BC port (at the end of a long fjord) suggested that oil spills were a positive economic factor for towns that got to have a permanent oil spill clean up facility on stand by, as well as the money spent during an oil clean up.

Fixing a broken window isn't a economic gain (see Henry Hazlitt's Economics in One Lesson)

Quote: TheCesspit

Sounds about right.

In the summer of 2006 a report argued that if aviation leaders fail to deliver an airport big enough to accommodate San Diego County residents' thirst for flying -- and area companies' needs to ship products by air -- the regional economy will take a $4.5 billion to $12.7 billion hit in the year 2035. In 2014 the county produced $206.4 billion in goods and services..

These statistics seem so overinflated. The airport could easily support 24MAP which is a lot of a population of 3 million. I could see a impact, but $12 billion a year?

Quote: reno

Interesting article. It mentioned that the State of Nevada has provided Tesla with $1.3 billion in "incentives" to lure Tesla to build the gigafactory there. (When the Nevada State Senate & House voted on the deal, it passed unanimously: every Democrat, every Republican supported it.) Corporations seeking to build a new factory will sometimes approach multiple states and get the states to compete with each other. Is this in the taxpayer's interest for states to compete for jobs? Tough question. Sometimes the freebies more than pay for themselves in the long run. But not always-- not uncommon for taxpayers get screwed when politicians bend over backwards to see who can hand out the most free stuff to a corporation. Plenty of NFL teams aren't satisfied with a new stadium; they want the taxpayers to build them a new stadium every 20 years!

Correct, so correct. The NFL thing is getting plain sick. I think the answer to that is a city has to tell a team to "drop dead" next time they ask for freebies. Then when Goddell calls and asks about how to "work it out" the mayor has to say, "Roger, here is how we work it out, DROP DEAD!" When one city is brave enough, others will follow.

Back to some freebies paying for themselves. IMHO you have to look at the track record. An auto plant from an established and growing company probably will. BMW, Daimler, Audi, Toyota, yes, these will pay. After the plant is up it will draw other suppliers near. And you can see their established market position. OTOH, Tesla is a real gamble. A producer with effectively zero history and established market gets this kind of cash? Me thinks pols are trying to "get in early" no matter the cost. But at the moment they seem to be like some middle-manager who puts the mortgage payment into a pump-and-dump stock off of some cold call they received.

Quote:

the face value of federal loans, loan guarantees, and bailouts received by Chase, Bank of America, Citibank, Goldman Sachs, et al is in the trillions (trillion with a "t", not a typo.)

While I was not for that, a few things to remember. The feds got collateral. And the feds forced a lot of those loans out. Bank CEOs were told they were not leaving the room until they signed. Told they were not leaving the room until they accepted a merger. National City Bank was forced on PNC Bank. Told they would be back-stopped but had to do the deal. Ditto Chase and WaMu. the Fed version of "in the next minute your signature or your brains will be on that contract!"

I believe Seattle has told major league sports to get bent in the past... hence the Sonics leaving. I think Seahawks and Mariners still get some considerations for planning and taxes, mind. I completely agree that private, entertainment businesses shouldn't be getting handouts... there's a tonne of better ways to spend city tax dollars.

Quote: Nareed

Whatever happened to 1) hydrogen fuel cells and 2) hydrogen-burning cars?

They have their issues, too, but seemed more likely to succeed than all-electric vehicles.

In essence hydrogen is just another form of battery. The only viable way of producing large quatities of hydrogen is through eletrolysis thus they are really just an electric vehicle. Hydrogen is also very explosive, remember the Hindenberg.

The fuel cell is very attractive at first glance with the only exhaust being water but still we need the electric power. The plus hydrogen vehicles would have is quick refueling using a model similar to the current gas stations.

What has been missed in this thread which is mostly rehashed from previous threads is the adding of 20 to 30% generation/distribution capacity to the current electrical grid to handle 100% electric vehicles.

Quote: AZDuffman

Musk Empire has benefited from $4.9MMM in various government subsidies. This doesn't include the crony credits system under which he is getting cash from other automakers.

What do you think of Nuclear power being financed by government? It takes decades to recoup the benefit a private company would incur. All that time they would not be making any money.

Quote: AZDuffman

Then when Goddell calls and asks about how to "work it out" the mayor has to say, "Roger, here is how we work it out, DROP DEAD!" When one city is brave enough, others will follow.

Even if a city shows courage, there's always going to be another mayor in another city willing to cut a sweetheart deal-- particularly if it's a mid-sized city yearning for respect & recognition (Sacramento, CA or Columbus, OH). Americans love football, so every mayor wants to be the guy who brought the NFL to his city; he can brag about it during the gubernatorial race. Sort of amazing that Los Angeles hasn't had a team since 1994.

Quote: AZDuffman

BMW, Daimler, Audi, Toyota, yes, these will pay. After the plant is up it will draw other suppliers near. And you can see their established market position. OTOH, Tesla is a real gamble.

Panasonic is underwriting a lot of the expenses for the Gigafactory, and they're certainly well established. But more to the point: honestly, if you're a politician serving in the Nevada legislature, are you seriously going to vote against building America's second largest factory in your home state? Nevada isn't a big player like Texas or California. Nevada can't afford to say no.

Quote: reno

Even if a city shows courage, there's always going to be another mayor in another city willing to cut a sweetheart deal-- particularly if it's a mid-sized city yearning for respect & recognition (Sacramento, CA or Columbus, OH). Americans love football, so every mayor wants to be the guy who brought the NFL to his city; he can brag about it during the gubernatorial race. Sort of amazing that Los Angeles hasn't had a team since 1994.

The NFL made an effort to slow down the relocations after the mid-1990s disruption. Since then they have had their longest period of stability in history. That is about to end. Now there is talk that both old teams may move back, or even all 3 old teams.

Quote:

Panasonic is underwriting a lot of the expenses for the Gigafactory, and they're certainly well established. But more to the point: honestly, if you're a politician serving in the Nevada legislature, are you seriously going to vote against building America's second largest factory in your home state? Nevada isn't a big player like Texas or California. Nevada can't afford to say no.

And that is a reason a smart pol may say no. If this collapses it will be a SITYS moment.