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Tesla Running Low on Charge
Elon’s big grift is in trouble.
His electric vehicle (EV) operation — which allowed car manufacturers to “offset” their carbon footprints by purchasing “credits” from Elon in lieu of making EVs themselves — had been priced with the expectation that the government would make a “market” for battery powered vehicles. But Tesla’s stock just lost about 40 percent of its value.
Elon‚ of course‚ will still have plenty of money. He is a smart grifter.
The reason why is both ironic and delicious.
The de facto EV production mandates (only EVs qualify as so-called “zero emissions” vehicles‚ never mind the “emissions” they cause would be “emitted” elsewhere) that made Tesla the highest-valued vehicle manufacturer on the planet served to prod the manufacture of battery powered devices by every other vehicle manufacturer. Once other vehicle manufacturers began manufacturing their own devices they no longer needed to pay Tesla for “credit” to “offset” the “zero emissions” vehicles they hadn’t been manufacturing. (READ MORE from Eric Peters: Why the Bipartisan Hostility Toward Nippon Steel Deal&;#63;)
The carbon credits grift is now basically kaput — and that is costing Tesla hugely. So also is the decline in demand for Tesla’s cars‚ a consequence of the competition born from the now-many manufacturers of EVs forced into being by the very “zero emissions” mandates that Tesla built its grift upon.
It was a grift that could only work so long as Tesla had the “market” all to itself.
It’s also similar to the business model that the Japanese automakers depended on when the first small Japanese cars entered the market back in the early 1970s.
What happened then was similar in that the government created a market for Japan’s small (and small-engine) cars by imposing costly penalties on American car companies‚ which built much larger (and larger engine) cars. These used more gas than the government decreed allowable and were styled “gas guzzlers‚” and their manufacture was punished via fines for this “guzzling‚” which ran afoul of the federal government’s fuel economy regs (CAFE).
But after a few years‚ American car companies began building “Japanese” cars of their own. That is to say‚ smaller cars with smaller engines — like the Japanese cars. These CAFE regs are why there are no longer any American cars — in the way that these latter were once very different than Japanese cars: larger rear-drive cars offered or even standard with V8 engines.
Now American cars are pretty much the same as Japanese cars (and European cars). All small‚ Four Wheel Drive and four cylinders (with a V6 still available‚ here and there).
They just have “American” badges.
But at least the Japanese made good cars — and there actually was a market for such in that people tend to be desirous of well-made‚ reliable things. And the Japanese cars were certainly that. Just like the Japanese motorcycles that came to dominate the motorcycle market.
But there is no denying the fact that the Japanese car companies were advantaged by the government — which disadvantaged the home-brand competition‚ which never recovered.
Just as Tesla has been advantaged over every derisively styled “legacy” vehicle manufacturer that wasn’t manufacturing battery powered devices — which was all of them initially — leaving Tesla in the enviable position of being — for a time — the only manufacturer of “zero emissions” battery powered devices.
This advantaged Tesla in another way — beyond the advantage of being able to mulct the “legacy” automakers (via “carbon credits”) to finance Tesla’s manufacture of battery-powered devices.
It had what market there was for battery powered devices all to itself — for awhile. And there was (and is) a small market for these devices. That is to say‚ there are a few people who are interested in a battery powered device and have the means to pay for one. These are necessarily affluent people; the same people who can afford to buy a luxury car. The problem is the markets for luxury cars and EVs is limited because there are only so many people who can afford to buy them: the average price of a battery powered vehicle is just shy of $50‚000.
What’s happened is another compounding problem for Tesla: Market saturation — the de facto forced manufacture of battery powered vehicles by every manufacturer of cars combined with the waning of market demand for these devices. (READ MORE: Ram Channels Cher — But Not for Long)
Most of the affluent people who wanted a battery powered device and could afford to buy one have already bought one. They are not in the market for another one. At the same time‚ the market is being flooded with devices for which demand is waning‚ creating what Ross Perot once called a giant sucking sound — of money‚ being hoovered into oblivion.
Eventually‚ Tesla and the other manufacturers who’ve stupidly committed themselves to making only EVs will find they have run out of money.
Elon‚ of course‚ will still have plenty of money. He is a smart grifter — and knows how to avoid being sucked past the event horizon himself.
But it will be satisfying to witness Tesla — perhaps the greatest grift ever — go the way of WorldCom and Enron.
Sic gloria transit mundi.
Hopefully&;#33;
The post Tesla Running Low on Charge appeared first on The American Spectator | USA News and Politics.
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