I think your complaints are pretty well addressed in first few paragraphs of Elon's blog post. The goal of the company from the outset has always been to create an affordable mass-market car, but until they have economies of scale and such, the vehicles are going to be expensive. People aren't excited because Tesla is making ~20k luxury cars a year, they're excited because the Model S is just the beginning.
And if you're upset because the cars are government subsidized, I'd like to point out that the conventional auto industries and oil industries have received more than their fair share of subsidies as well over the years.
>I think your complaints are pretty well addressed in first few paragraphs of Elon's blog post.
Not really. I take everything that Musk says with a grain of salt.
Tesla's goal of making a mass-market car is all well and good, but they are a long way from that. They can't seem to make money on high-margin luxury vehicles, so obtaining the scale to build a lower-margin vehicle isn't exactly a cake-walk. I'd like to see them do it, but how does it happen, financially? I'm not sure.
Again, my point is that this is always framed as Tesla v. the Auto Industry, when in fact the auto industry is also trying to accomplish the same things that Tesla is. And, at least in my opinion, they have a better chance of actually doing it; they have the scale and profits. Yet places like HN (see some other comments) can't imagine these large companies pulling it off. It's absurd.
>I'd like to point out that the conventional auto industries and oil industries have received more than their fair share of subsidies as well over the years.
I don't necessarily agree with those subsidies either. But if you think those subsidies and bailouts are equivalent to giving extremely wealthy people a discount on a luxury vehicle, then I guess we have different ideas about what's "fair".
They can't seem to make money on high-margin luxury vehicles
This is incorrect. They've been profitable since Q1 of this year and their profit margins are continuing to rise, even discounting the ZEV regulatory credits (which have been steadily decreasing for a number of quarters now).
in fact the auto industry is also trying to accomplish the same things that Tesla is
This is debatable. Mainstream auto manufacturers have released plenty of electric cars, but they're all "compromise cars" that seem to shy away from cannibalizing their mainstream car sales. None of them come close to having the range, comfort, or storage space of the Model S.
This is a huge deal. Some people might be happy buying a Nissan Leaf as a secondary commuter car, and they might be willing to put up with the ugly styling, small size, low range, and poor performance. But, unless someone is making a compelling electric car that's actually better than a gasoline car, EVs aren't really going to take off. Right now, Tesla is the only manufacturer that seems to be even trying to pursue this goal, and that's what makes them so unique, interesting, and important.
But if you think those subsidies and bailouts are equivalent to giving extremely wealthy people a discount on a luxury vehicle...
The existing tax credits apply equally to all electric cars, not just luxury vehicles. You get $7,500 back from the federal government regardless of whether you buy a Tesla Model S for 70k or a GM Spark EV for 27k. As a percentage of purchase price, cheaper cars are actually being subsidized more than expensive luxury cars.
Any electric car is a compromise. It's a compromise on range, on refuling time, on flexibility. That's not to say they don't have certain advantages too.
I don't understand your "cannibalizing their mainstream car" argument. Either way they are selling a car.. what's being cannibalized?
There's a lot of good information on this particular phenomenon in the documentary "Who Killed the Electric Car". It's a bit dated by now, but still relevant in my opinion.
Car companies make a lot of their profits off of spare part sales for maintenance and repairs. Electric cars have far fewer moving parts, and are generally more reliable, so the traditional profit model breaks down somewhat.
Some have also speculated that the auto companies have historically resisted electric cars because they're in bed with the oil industry, but it's hard to really verify how true that is.
Finally, any corporation with a long established history will generally be resistant to big changes. See, for example, Kodak: it was obvious that the world was going digital, but we had this big established business that was good at making conventional film, and they didn't want to shift away from their strength. They dabbled in digital technologies, but never truly accepted the shift in technology. Of course, years later they went bankrupt, but it took a long time to reach that point, and meanwhile all the executives left with golden parachutes.
A compromise car is one that is worse, on the whole. The Model S is clearly not one of those for people who drive the normal amount in normal sized bursts.
Would you call a BMW 335i hardtop convertible a compromise car because it's not suited to snowy conditions? Cars that are aren't as much fun to drive, are they compromises?
And if you're upset because the cars are government subsidized, I'd like to point out that the conventional auto industries and oil industries have received more than their fair share of subsidies as well over the years.