When financial analyst Toni Sacconaghi of Sanford C. Bernstein asked Tesla CEO Elon Musk about the money-losing electric car company’s capital requirements going forward (Tesla has burned through – cue Dr. Evil – one billion dollars in three of the last four quarters) Musk replied: “Boring, bonehead questions are not cool. Next?”
Neither man gives a damn about the damage – human or financial – imposed on others. Nor that others are made to pay for it all. They don’t even give lip service to pretending anything they do bothers them in the least. All that matters is the Great Dream – whether it’s “regime change” in some resource-rich country which hasn’t attacked us (a war crime, once upon a time) or this equally demented business of manufacturing electric cars that almost no one would freely buy absent the subsidies and mandates.
Raise your hand, ask a reasonable question – and it’s dismissed as “boring” and “boneheaded.”
Sacconaghi was also lectured by Musk to not “make a federal case” out of Tesla failing to achieve the ludicrous 25 percent gross profit margin on sales of the Model 3 it claimed it would make. A reasonable question, given most legitimate car manufacturers – those whose cars sell on their economic merits, without needing taxpayer-financed propping-up via subsidies and mandates – earn about 4 percent or so.
“That’s something that we’ll solve like within three months to six months later,” Musk said.
The guy is a crony capitalist Rasputin. He bewitches and seduces. Whatever the ersatz Iron Man says is taken as holy writ, not to be questioned.
Another analyst, Joe Spak of RBC Capital Markets, had the audacity to ask Elon a question relating to the true cost of the Model 3 – production of which is also nothing close to what Elon promised, but never mind that.
“Boring. Next,” came the reply.
Musk likes to tout the “estimated” $35,000 base price of the Model 3 – about half the price (but not the actual cost) of the Model S. The touting is critical. Musk knows – even if he won’t admit – that the electric car is a non-starter as a mass-market car unless the price (if not the cost – more on that in a moment) comes down to a number that the mass market can deal with.
Given that most people – most families – have an annual income of $60,000 or less, a car that costs $40,000 or more is not going to work economically, regardless of its “carbon footprint” or how quickly it can accelerate to 60 MPH. Even if it didn’t take 9-10 times as long to recharge vs. refuel (and even then, only a partial – 80 percent – charge due to load imposed by the “fast” charger) and wasn’t range-gimped vs. a regular car.
But what he says is like what those late-night commercials touting rapid weight loss without dieting or exercise say. You could lose as much as 20 pounds in a week! But in fact, you probably won’t lose any pounds and may even gain some – meanwhile, your wallet is lighter, having paid for the Miracle Weight Loss pills.
Once you “configure” – in Musk-speak – a Model 3 (assuming you can ever get one; remember those ongoing production delays; thousands of people who put down money to secure themselves a place in line have yet to receive a car) it gets pricier and pricier. Elon doesn’t tell you that the highest-performing battery pack – which you need to get the best-case range/performance touted (310 miles vs. the standard 220) and other features most buyers would probably want – kicks the price of the Model 3 to $44,000.
The Model 3 – touted as a mass-market car – is in fact a high-priced luxury-performance car. Any car with a price tag of $35,000-plus is a car that costs $20,000 more than a perfectly sound economy sedan such as a Hyundai Elantra, as a for-instance. There is a reason why Hyundai sells about 15,000 of them in a month – without subsidies, mandates or expecting buyers to wait years (literally, in the case of the Model 3) to actually get hold of one. Tesla sold about 3,800 Model 3s in April – each one a subsidized, crony capitalist affront to the free exchange of goods and services.
“Sorry,” Musk said, “these questions are so dry. They’re killing me.”
Yeah. Me, too.
. . .
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