Elon’s “Earnings”

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It is being “reported” that Tesla’s net “earnings” have “surged” to $438 million. What they do not report is that this includes $518 million “earned” via regulatory credits – which aren’t cars. Rather, they are monies mulcted from other car companies, paid to Tesla to get “credit” for not having made a sufficient number of electric cars themselves.

Enough to achieve compliance with government requirements, as in California, that they build a certain number/percentage of them – else pay Elon to get the “credit.” In other words, it is a racket.

A shakedown.

Only legal – like the income tax. But it does not change the nature of the thing. Only the marketing of the thing.

It is very interesting that no major automotive media reports the context about Tesla’s “earnings.” Instead, it is “reported” that Tesla is making money hand-over-fist.

Which is true.

It is also true of the IRS. And of Al Capone. But the media in those days did not cover for Capone. Everyone knew he was a gangster – and to be fair to Capone, he was only that because the government made his otherwise legitimate business – the selling of alcohol to people who very much wished to buy it –  illegal.

The situation with Tesla – and Elon Musk – is morally and legally the inverse. The government has made it illegal for other car companies to not sell electric cars, which most people do not wish to freely buy.

It makes no more sense for Toyota, say, to build lots of electric cars when there is no real market for electric cars than it does for Starbucks to build coffee kiosks in Death Valley. Luckily for Starbucks, there is no government regulation requiring hot coffee to be sold in Death Valley as the price of being allowed to sell hot coffee in San Francisco – so Starbucks doesn’t have to build coffee kiosks in the desert – nor pay some other coffee company that does build them in the desert, so as to get “credit” for it.

But the car industry is in precisely that position.

If Toyota – if any of them – wish to sell other cars in California, they are required to either make a certain number of “zero emissions” electric cars themselves  . . . or they’re forced to buy “credit” from Musk, for his having made them.

They are forced, in other words, not only to pay extortion – they are forced to subsidize the business of a direct competitor.

One who can’t compete with them on the merits. And so uses the law, instead.

Musk is arguably more of a criminal – morally – than Al Capone. His (Musk’s) business is fundamentally fraudulent. Rather than flouting the law, he leverages the law to extort his “earnings.”

It’s not reported quite that way, of course.   

Just as it is not reported that a large and growing number of previously healthy people are oddly dropping dead  . . . shortly after having been “vaccinated” – another program brought to you by the offices of the government, leveraged by a privately owned business interest – the pharmaceutical cartel – to enrich itself by making someone else the poorer.

What is interesting about that is it is not the value-for-value exchange of the free market.

When a person buys a Toyota, he has not taken anything of greater value away from Toyota – nor been forced to hand over something of greater value, to him, to Toyota.

Indeed, it is precisely the opposite – and for all participants.

The buyer exchanges his money, freely, for a product – the car – which he esteems at least as much as the value of the money he pays for the car. The seller – Toyota – gives up the car for a sum it esteems as much as the value of the work and materials that went into the manufacturing of the car, plus a profit for the effort involved.

There is no extortion involved. It is not a zero-sum game, with a “winner” and a “loser.” No mandates or laws are necessary to coerce free exchange. If it occurs, it occurs because it is of mutually agreeable benefit. If it is not, it does not. Both parties either go their separate ways or they work toward a mutually agreeable meeting-in-the-middle.

It ought to raise questions when an exchange requires force; when one party can legally coerce the other party to “exchange.” When it is a zero-sum game. One party the “winner” and the other, the “loser.”

Elon Musk is a “winner” – in the way the IRS is a “winner.” In the way that Joe Biden “won” the recent (s)election.

They have all the marbles, but they didn’t win them fair and square.

. . .

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32 COMMENTS

  1. There’s a global run on lithium right now. I’m putting up solar panels, along with a battery system for whole house backup. My contractor told me that they have the panels ready but can’t get batteries from LG. Tesla Powerwalls were backordered out to the fall and now this week Tesla cancelled contracts for people who were getting a Powerwall, unless as part of a Tesla solar installation.

    On the surface it might be a true shortage. OTOH, I came across this article just now…

    https://www.cmegroup.com/trading/metals/other/lithium-futures.html

    Lithium futures
    Take charge of price risks associated with manufacturing lithium-ion batteries.

    The rapid growth of electric vehicles and large-scale battery storage applications for electronic devices is increasing Lithium demand – and price risk. Lithium futures offer price transparency and efficient risk management and will be financially settled each business day of the contract month, based on monthly average of assessments published by Fastmarkets, a leading commodities benchmark data provider.

    I’m a little surprised that there wasn’t already a futures market in Li. Something tells me that this shortage will magically end on May 3rd.

    • Querida Herr Arr Key Red D Kilo Whatt

      https://www.nsenergybusiness.com/projects/clayton-valley-lithium-project/

      Cley Vallee knot so far fruhm Clark Countee Sine Cosine City Mee

      = + –

      The Clayton Valley lithium project is a lithium-bearing claystone deposit planned to be developed in Clayton Valley, in the Esmeralda County of Nevada, US.

      The project is 100% owned by Cypress Development Corporation which will also develop the mine. A pre-feasibility study (PFS) for the project was completed in May 2020.

      The capital expenditure for the Clayton Valley lithium mine is estimated to be £406m ($493m) and the project is expected to produce 27,400 tonnes (t) of lithium carbonate equivalent (LCE) a year over an estimated mine life of 40 years.

      Location, geology, and mineralisation
      The Clayton Valley lithium-bearing claystone deposit is situated in central Esmeralda County, immediately east of Albemarle’s Silver Peak lithium brine operation.

      PROJECT GALLERY
      The project area covers approximately 5,430 acres within the Clayton Valley, approximately 352km to the southeast of Reno. The mining town of Tonopah is located approximately 56km northeast of the project site and the village Silver Peak lies 16km west of the mine site.

      The project is also located adjacent to the 23,300-acre Clayton Valley lithium brine project being developed by Pure Energy Minerals.

      The Clayton Valley lies within a closed basin near the southwestern margin of the Basin and Range province in western Nevada.

      The uplifted basement rocks of Angel Island comprising metavolcanic and clastic rocks, and colluvium dominate the western portion of the project area, while the southern and eastern portions are dominated by uplifted, lacustrine sedimentary units of the Esmeralda Formation.

      Lithium resources at the deposit are found hosted in tuffaceous mudstone, claystone, and siltstone. The lithium mineralisation occurs within montmorillonite clays throughout the sediments to a depth of at least 120m.

      Lithium reserves at the Clayton Valley project
      The Clayton Valley project is estimated to hold 222.8 million tonnes (Mt) of proven and probable ore reserves grading 1,141ppm lithium and containing approximately 1.35Mt of lithium carbonate equivalent (LCE).

      The measured and indicated resources at the deposit are estimated to be 593.3Mt grading 1,073ppm lithium.

      Mining and ore processing
      The open-pit mining method will be implemented at the Clayton Valley lithium project. The ore material will be extracted by a 12m³ hydraulic track excavator and removed from the pit using semi-mobile feeder-breaker and conveyors. The stripping ratio will be 0.15:1, and the lower grade claystone will be hauled to a waste dump with the use of scrapers. The mine will not require any drilling or blasting operations.

      The initial mining plan is based on a daily mill feed rate of 15,000 tonnes per day (tpd). The extracted ore will be sent to a nearby processing plant where it will be leached with dilute sulphuric acid leach followed by filtration, solution purification, concentration, and electrolysis for the production of lithium hydroxide.

      Infrastructure facilities
      The Clayton Valley project area is accessible from Tonopah via the US Highway 95 and the Silver Peak Road.

      A 2,500tpd acid plant to produce sulphuric acid by burning elemental sulphur will be built on-site as part of the project. The generated steam in the process will be used to heat the leach tanks.

      The acid plant will also be equipped with a 27.5MW power generation facility. The additional electricity requirement for the project will be supplied by the local utility NV Energy.

      The water requirement for the project will be sourced from a wellfield situated approximately 10km away from the project site.

      The other infrastructure facilities for the project will include a tailings storage facility located to the south of the plant site, as well as an administration building, laboratory, warehouse, reagent storage, mine shop, and fuel and reagent storage facilities.

      Contractors involved
      Continental Metallurgical Services (CMS) and Global Resource Engineering (GRE) prepared the pre-feasibility study report for the Clayton Valley lithium project.

      GRE provided the mineral resource estimate, while NORAM Engineering and Constructors, and CMS designed and tested the flow sheet for the lithium recovery for the project.

      DO YOU HAVE INTERESTING CONTENT TO SHARE WITH US?
      Enter your email address so we can get in touch. & $ ## $ &&&&

  2. OK, but how much of this was Elon’s fault? Did he “ask” for credit payments from ICE auto companies? Did he petition congress to pass these idiotic laws? Or, did the imbeciles in DC, and various state capitals pass these carbon credit laws on their own? Would another EV company receive the same credits? Can Elon even refuse these payments if he wanted do, and I doubt he would even if he could. I honestly do not know the answer, but if this is not Elon’s fault, how can he be blamed?

    • Hi Rush,

      I blame Elon for using the force of government to make EVs seem like viable mass-market alternatives. His cars would never have been more than very low-volume boutique/specialty cars – like McLarens – absent all the transfer payments/rent seeking. He has wet his beak – to the tune of billions – by using government to mulct ordinary people. And he has facilitated the massive increase in the cost of vehicles generally and the future limiting of mobility by egging on the “climate change” lie he profits from.

      Reason enough?

      • Hey Eric,

        I agree with you 100% about the use of government force. It is deplorable, and should never be condoned. I just wonder if this was forced on Elon, that’s all. Did he have a choice in the matter, or did the government use his company simply because it is in the EV business? Do Nissan, Chevy, and any other EV manufacturer get these credits? Do they have a choice? Elon is not a pyscopathic nut job such as Bezos, Zuckerberg, and Dorsey. He has many libertarian tendencies, well at least the words he uses sometimes do. His companies use/invent cutting edge technology. He employs thousands of people. There are worse billionaires in the world than Elon, and I mentioned three of them. Now, if he asked the government for these subsidies, well, that would be a different story. But, how many of us would turn down Uncle Sam’s billions if it were waved in front of our face.

        • Hi Rush,

          Musk is a very rich man – via PayPal. He had the means to finance his electric car dream, using his own means. He could also have focused on making a practical, affordable EV – which he would have had to do, if he meant to make money – by earning it. He is almost solely responsible for perverting the EV into a virtue-signaling toy for the affluent.

          Tesla is the only car company that only sells EVs (excluding the small handful of minor players, who don’t build enough cars to sell “credit” for building them). The other car companies have to buy the credits in order to sell their viable cars. Either that or build EVs they can’t sell for a profit (like Teslas).

          No one is forced to steal. Elon chooses to.

          No one is all bad. Stalin liked to garden.

          I wish Elon were better.

          • Eric,

            Elon wanted to follow the path trod by VCRs and cell phones when breaking in to the EV business. If you’ll remember, VCRs and cell phones were high priced toys; they were high market items at first. As the tech advanced, their prices came down and they became more numerous. Elon followed that path when breaking in to the EV market.

            He did so because, as you know better than most, car manufacturing is capital intensive; it takes a boat load of money to make cars! For that reason, Elon started with the Roadster, so as to bring in enough money to do the Model S. Though the Model S was pricey, it was less expensive than the Roadster. This brought in more money to do the Model 3. He’s gone on to do the Cyber Truck, the Semi, and is now working on a low cost Tesla. He says it’ll be $25K, but knowing Elon, it’ll probably be closer to $30K.

            Elon also did the Roadster first to show what EVs can do; he did the Roadster first to show that EVs aren’t slow, ungainly, and undesirable. Prior to Tesla coming on the scene, the CitiCar had been the biggest selling EV in America. It was a glorified, enclosed golf cart! It could do 35 mph and had a range of 30-40 miles. Prior to Tesla, when you mentioned EV, people thought slow; they thought it wasn’t useful; and so on. The previously held stereotype of EVs had to be eliminated, so Elon brought out the Roadster first.

            Finally, Tesla almost went under in 2008; they were on the brink. Elon literally bet every last dollar he’d made from PayPal to keep Tesla going in the wake of the 2008 crash. It was his willingness to put his money where his mouth is that spurred other investors to put money in Tesla, and thus keep the company going.

            In closing, given the high capital requirements of car manufacturing, I don’t know if Elon could’ve brought out a low cost EV first. He followed the path blazed by VCRs and cell phones; cell phones are now ubiquitous. I’m old enough to remember when they weren’t. In retrospect, what Elon did worked; Tesla is the first car company to be established in over 90 years.

            • “For that reason, Elon started with the Roadster, so as to bring in enough money to do the Model S.”

              Bring in money? You mean bring in regulatory tax credits?

              It seemed like you were suggesting that the Model S sales was the source of the income.

            • Hi Mark,

              Yes, I know. I also know that electronic devices and electronic cars are profoundly different things. The battery issue is perhaps the biggest different thing. It is one thing to power an iPod. Another to power a car.

              Musk’s focus on performance is merely a confession that EVs cannot compete on economy or practicality. It is doubtful they ever will be able to – because of the battery issue. Issues, actually – including the inevitable replacement cost, long before an IC car needs a new engine or other major drivetrain component.

              EVs are powered as much by bullshit as electricity (and mandates).

              PS: Wasn’t the Model 3 going to be “low cost”? It turns out it costs $40k-plus.

              Why does anyone believe a thing this man says?

  3. So its taken Tesla 17 years to lose $432 per car?
    Rather than raise the price of the car to break even or make money, Musk has decided to use govt mandates to make up the difference.

    I agree. he is morally bankrupt.

    Though the article states auto gross margins are 26.5%, so what is he spending $ on? Dogecoin?

    • I spent about $400 on Dogecoin back in 2014. It was a fun community, nobody ever figured they would get rich from it. I just cashed it out last week for $44600. Thank you Uncle Elon for hyping it on Twitter. Not a fan of Tesla vehicles or their business practices, but I can’t say Mr Musk never did anything for me.

      So what am I going to do with that money? Looking at buying a 4Runner. Body on frame, normally aspirated V6, five speed auto, old school 4WD. Those things are dinosaurs in 2021, which is exactly why I like it. Without a doubt one of the most reliable trucks on the market.

      I don’t like turbos from a reliability standpoint and I don’t like the way the 8-9-10 speed autos shift. Because of the federales and their emissions regs that will soon be all you can get. So I’ll be taking my ridiculous late stage capitalism casino earnings and getting something decent while I still have a choice.

      • My 2018 TRD Off-road is a very capable ‘get out of dodge’ vehicle both on and off pavement. I’ve always owned Jeeps or trucks before the Toyota for this purpose alone, but I became quite impressed over a friends 4runner.
        …..and Toyota is not jumping all in to the EV madness so there’s that.

      • Hi Cheddar,

        I “amen” your thinking – and your choice. The 4Runner (and the few like it, in general terms, such as the current Dodge Charger) are the last of the Mochicans. When they are redesigned, they will be unrecognizable. If they are redesigned. I suspect many will simply be retired. After all, who will want a FWD, turbo-four-powered “Charger”?

  4. Musk is still managing to lose close to $150 million actually building electric cars…….. Even with the thumb on the scale and all the regs going his way.

    If it wasn’t for the credits and the other ripoffs this “enterprise” would have gone bankrupt long ago already. Too big to fail. If it wasn’t for the uncles of the world, no automaker would even be bothering with a large scale electric car program.

  5. How, exactly do these credits work?

    And how did it come to pass?

    I wish we had a resident expert to explain these things.

    Perhaps an accountant.

    • Not an expert myself, but the basic sources of Tesla’s regulatory graft are well known:

      ‘Tesla has earned “Regulatory Credits,” sometimes referred to as ZEV credits under California law, which Tesla can sell to other auto manufacturers. ‘The GHG (Green House Gas) credit is a federal regulatory credit similar to [California’s] ZEV credit.

      ‘Tesla generated regulatory credit sales of $1.58 billion, $594 million and $419 million in 2020, 2019 and 2018 respectively. ‘That’s quite a lot from a “product” literally with zero cost to produce.’

      https://stockdividendscreener.com/auto-manufacturers/teslas-regulatory-credits-revenue/

      Tesla’s Form 10-K provides no breakdown of regulatory credits under state vs federal vs overseas law, or by the purchasing auto maker’s identity.

      https://www.sec.gov/Archives/edgar/data/1318605/000156459021004599/tsla-10k_20201231.htm

      ZEV propaganda from Commiefornia:

      How the ZEV Regulation Works
      Auto manufacturers are required to produce a number of ZEVs and plug-in hybrids each year, based on the total number of cars sold in California by the manufacturer. Manufacturers with higher overall sales of all vehicles are required to make more ZEVs. Requirements are in terms of percent credits, ranging from 4.5 percent in 2018 to 22 percent by 2025. Auto manufacturers are to produce vehicles and each vehicle receives credits based on its electric driving range. The more range a vehicle has, the more credit it receives. Credits not needed for compliance in any given year can be banked for future use, traded, or sold to other manufacturers. CARB releases annual credit bank balances each year, as well as the total number of vehicles produced for that model year, as well as the total number of ZEVs and plug-in hybrids.

      https://ww2.arb.ca.gov/our-work/programs/zero-emission-vehicle-program/about

    • From a purely practical standpoint the carbon credit racket amounts to a license to steal via extortion. If it were not for this ability to mulct funds from companies that actually turn a profit Tesla would have gone tits up a long time ago.

  6. Musk is like a Soviet factory manager and just needs to produce his quota to gain him favor with the current American Nomenklatura. He will be exiled to the gulags for moving his business from a *Covid State-CA* to a *Free State* of Texas. Hope the Texans like all those Californians running around claiming the sky is falling and voting for Marxism.

    On another related topic to the current tyranny; I saw a quick comment from a former conservative who make the point that the conservative movement is dead simply because there is nothing left to conserve in America. We are under full assault and if we choose to define ourselves as anything perhaps we are now *counter-revolutionaries* ?

  7. If only such was true of Musk and Tesla alone. The US Psychopaths In Charge have turned the entire economy into a system within which they pick the winners and the losers. The COVID psyop was created to do exactly that. Corporations win, private businesses lose. They even pick which are “essential” and which are not. Never mind that they themselves are the very least essential of any. We are headed for a reckoning that nobody is going to be happy about, except the tyrants if they survive it.

    • Hear, hear. Notice that none of the govco “workers” missed a day’s pay. They probably even received bonuses and “hazard pay.”

    • ‘The US Psychopaths In Charge have turned the entire economy into a system within which they pick the winners and the losers.’ — John Kable

      Fvckin’ A … 108 years ago, the Federal Reserve turned bankstering into a public-private partnership, with the big players protected from failure at unlimited cost.

      Since the 2008 crisis, nearly contrast digital money creation in the form of QE (Quantitative Easing) has created a global ‘everything Bubble’ that one day will pop with an almighty bang, immiserating billions worldwide.

      Meanwhile, gov-sponsored grifters like Elon are turned into centibillionaires, riding the tidal wave of fake ‘money’ and corrupt fedgov subsidies.

      This all ends in tears, comrades.

      Mama’s in the factory
      She ain’t got no shoes
      Daddy’s in the alley
      He’s lookin’ for food
      I’m in the kitchen
      With the post-Bubble BLUUUUUUUUUES

      — Bob Dylan, Tombstone Blues

  8. STRANGER,
    Ere thou pass, contemplate this CANNON,
    Nor regardless be told
    That near its base lies deposited the dust of
    JOHN BRADSHAW,
    Who, nobly superior to all selfish regards,
    Despising alike the pagentry of courtly splendor,
    The blast of calumny, and the terrors of royal vengeance,
    Presided in the illustrious band of heroes and patriots,
    Who fairly and openly adjudged
    CHARLES STUART,
    Tyrant of England,
    To a public and exemplary death,
    Thereby presenting to the amazed world,
    And transmitting down, through applauding ages,
    The most glorious example
    Of unshaken virtue, love of freedom, and impartial justice,
    Ever exhibited on the blood-stained theatre of human action.
    O, reader,
    Pass not on till thou hast blessed his memory,
    And never————never forget
    THAT REBELLION TO TYRANTS IS OBEDIENCE 
TO GOD.

    http://boston1775.blogspot.com/2019/05/the-emergence-of-rebellion-to-tyrants.html

    Includes money tyrants, medical tyrants and military tyrants. Any kind of tyrant.

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