Robert Tracinski on the amazingly long run Elon Musk and crew have had in the electric car business without (yet) turning a profit:
Elon Musk may finally be running out of other people’s money. That’s the upshot of a report on how Tesla is burning so much cash it may run out by the end of the year. This is a company that has raised more than $5 billion from its investors so far, and it is still going to need many billions more — if it can get them. What is more interesting is how Tesla got to the point where it is still bleeding cash, just when it was finally supposed to be making good on its extravagant promises.
The company has always been a triumph of PR hype and political messaging over reality. Why invest in Tesla? Why buy a Tesla? Because you’re not just buying a car — you’re participating in a social and technological revolution. You are the leading edge of the new era of electric cars and the obsolescence of the gasoline engine — which will literally save the planet, or so the story goes.
But it’s not just about global warming. You’re also helping Elon Musk revolutionize the entire manufacturing process by building super-automated, hyper-roboticized factories. He’s on the leading edge of the self-driving car revolution, already introducing a feature he calls “Autopilot.” If we don’t manage to save this planet, don’t worry. By boosting Musk, you’re helping him find us another planet to colonize.
In actuality, what has Tesla produced? A very nice car — for $100,000. There are a lot of very nice cars you can buy for $100,000, if you’re the sort of person who thinks this is a reasonable amount of money to spend on a car, as opposed to a house. More to the point, there are a lot of very nice cars you can buy for $50,000. But Tesla has been able to charge an irrationally high premium for sleek design, technological glamour, and what a Tesla-owning friend of mine describes as “happy tree-hugger feelings.”
