I am a proud Tesla owner – and have been for over a year now. I get joy every day driving a car that is responsive, fun to drive, quiet etc. Electric cars are superior in so many ways.
With over 1 million cars produced and sold last year Tesla knows how to execute. Margins per car sold are higher than traditional manufacturers.
Now check out the article from Bloomberg which shows that Tesla’s factory in CA is more productive than others in the US. Here’s a quote :
Elon Musk has a very specific vision for the ideal factory: densely packed, vertically integrated and unusually massive. During Tesla Inc.’s early days of mass production, he was chided for what was perceived as hubris. Now, Tesla’s original California factory has achieved a brag-worthy title: the most productive auto plant in North America.
Last year Tesla’s factory in Fremont, California, produced an average of 8,550 cars a week. That’s more than Toyota Motor Corp.’s juggernaut in Georgetown, Kentucky (8,427 cars a week), BMW AG’s Spartanburg hub in South Carolina (8,343) or Ford Motor Co.’s iconic truck plant in Dearborn, Michigan (5,564), according to a Bloomberg analysis of production data from more than 70 manufacturing facilities.
There’s a lesson for government incentives in this (they were helpful in Tesla’s first years) – but the roadmap is clear – producing better vehicles that are emission free is something CUSTOMERS WANT. You don’t need to incentivize that!
Tesla sells all of its production with zero advertising. All the other auto makers are bigger on advertising than delivery. Think about that.
I like the idea of incentives to help increase the rate of production of electric vehicles. But if the other big autos don’t solve their supply chain issues, and can’t deliver the vehicles people want – then the incentive won’t work.
Example Ford’s lightning pickup – while touted with much fanfare – will be just 2% of annual production of its pickups. Now that shows a lack of optimism or capacity for electric.
In my view the big traditional autos have the earnings and know how to invest in an electric future. They just need to solve their design and supply chain issues for themselves. GM made over $15bn in profit in 2020. Does it really need handouts to have the ability to deliver and product that many want.
My final view on incentives is a rant! When President Biden proposes an incentive that pays more for the purchase of a vehicle from a UNIONIZED factory – he has now politicized climate change further. Isn’t a Tesla produced in America just as good for the American economy as a GM vehicle?
Why is the Biden administration so against Tesla.
As we started this article. Tesla and the free market – with mild incentives for a start up – created a winning product- solved production problems.
The Biden administration solution to climate change is to offer billions to established companies all making billions – and to exclude the winning company from that incentive.
Government incentives should focus on helping startups (like Tesla in the beginning) get their products to market and build economies of scale so that customers make the choice.
If they want to do the right thing for climate – create equal incentives that value all US jobs created (not just those in union plants) and work on infrastructure (for all vehicle makes).
JF Insights 