NLPC has extensively documented how Tesla Motors has taken advantage of market distortions to reap revenues – including government mandates, subsidies, and taxpayer support – not the least of which have been so-called “zero emission credits” from the state of California. But much of the revenue Tesla enjoyed last year – which often meant the difference between profit and loss – was credited based upon theoretical technological capabilities and not ones actually put into practice.
CEO Elon Musk has also relied on accounting gimmicks to enhance his bottom line over the last 18 months, during which a couple of quarterly earnings reports even showed a profit – albeit under non-Generally Accepted Accounting Principles. Those handsome returns were achieved in part thanks to a scheme administered under the California Air Resources Board in which additional zero emission credits are awarded to vehicle manufacturers based upon the ability for models to “fast fuel.” In the case of Tesla and other electric vehicle makers, the faster a car can recharge to the point it can drive a longer distance, the more credits it receives.
Last week AAA released findings from tests it had run on three models of electric automobiles, and announced that the heavily subsidized vehicles suffer dramatic driving range loss in both cold and hot temperatures.
The news wasn’t new, but apparently the broader media noticed because the pronouncement from the nation’s largest consumer automotive club made it official. NLPC (beginning with a Consumer Reports experience) has reported from time to time on such problems since late 2011. The Tulsa Worldreported that AAA found driving distance for electric vehicles can be diminished up to 57 percent in extremely cold temperatures, and by one-third in very hot temperatures.
The Obama administration Green-stimulus losing streak continues. The two luxury electric automaking companies, where the Department of Energy deemed taxpayer “investments” should be placed at risk, don’t inspire confidence.
Were the late Saturday Night Live cast member Gilda Radner still with us today, Tesla Motors might look to her character Emily Litella for its latest public relations campaign to address overheating and fires with its Model S charging systems.
“Never mind,” the Weekend Update commentator would say.
That’s was also essentially the response from Tesla on Friday when the company announced – after it had vehemently denied any culpability about overheating systems or power cords just three weeks earlier – that it would send all Model S owners new cords to replace the defective old ones. This followed a garage fire in Irvine, Calif., which local authorities blamed on either “a high resistance connection at the wall socket or the Universal Mobile Connector from the Tesla charging system.” New charger connectors will be mailed in the next two weeks, according to a Bloomberg report.
Last year at this time NLPC reviewed 2012 as “The Year of Taxpayer ‘Green’ Waste,” and that description applied to 2013 as well. But additional trends of government opaqueness and inattention to safety and security – often related to stimulus-funded programs and their corporate beneficiaries – were also revealed.
There’s that uncomfortable juxtaposition of words again: “Tesla” and “fire.”
This time was quite an accomplishment by the electric automaker’s publicity department: they kept the Irvine, Calif. garage fire quiet for over a month. The secrecy expired on the November 15 incident when the Orange County Fire Authority attributed the incident to the EV’s re-powering set-up, according to a report obtained by Reuters.
Thirteen of Fisker Automotive executives made more than six figures in the past year, despite manufacturing zero cars.
The news was first reported Wednesday afternoon on the automotive Web site Jalopnik.com, and later in the evening by the Delaware Journal. Jalopnik often gets the scoops when electric cars catch fire. For those unaware of the ugly saga, Fisker declared bankruptcy at the end of last month after squandering more than $1.4 billion in private investment and losing $139 million of taxpayers’ money.
Fires, faulty drive units, financial losses and stock price deflation marked Tesla Motors news in a week that seemed as bad as the last couple of years were good.
Fortunately for CEO Elon Musk and his support staff he’s mastered the art of celebri-preneur showmanship that he’s built enough standing with the media to endure a really bad week. The multi-billionaire who’s dazzled with innovation at Paypal, SpaceX and SolarCity will be permitted his stumbles because of his track record and his self-assurance. Henrik Fisker, whose taxpayer-backed luxury electric auto company didn’t get nearly the same favor, must be jealous.
Tesla’s once-Teflon Tony StarkElon Musk, the adored Paypal/SpaceX/electric-car innovator who’s been showered with unmitigated media praise and highly inflated stock values, has another lithium ion battery fire to explain.
This one happened after a Model S crash in Mexico. The last one happened less than a month ago in Kent, Wash. Since then Tesla’s share price has fallen from $193.90 on Sept. 30 to $160.58 this afternoon. The irrational exuberance that made the electric automaker the darling of Wall Street has now become merely excitable, although still unjustifiably so. Even Musk himself told Bloomberg last week, “The stock price that we have is more than we have any right to deserve.”