Obama Subsidized Electric Car Company Tesla Investigated for Fires

Wiring together thousands of laptop batteries to power a car isn't that great of a solution.

obama tesla

Tesla has some big problems. This month it posted a loss of $38 million and its shares fell 16%. On top of that, it's got battery issues.

The company, which got $465 million from Obama, makes electric cars which depend on wiring together 7,000 laptop batteries together. This is just as clumsy and unwieldy as a solution as it sounds. For one thing, laptop batteries are expensive. And it's a clunky solution.

Obama donor Elon Musk, who got his buddy to trash the space program to give his Space X company a shot at the market, is talking up some giga solution, but for the moment Tesla can't be much more than a niche company for people who like to waste money to have a car they can use as a talking point in California.

Obama's battery factory push has failed. Musk is probably thinking that he can pry some more taxpayer cash out of Obama to build a battery factory, like the ones that Obama already subsidized. Considering Obama's appetite for doing favors for donors, he's probably right. But that doesn't mean it will work.

And meanwhile an investigation just opened into Tesla over its battery fires. (Apparently wiring together thousands of laptop batteries to power a car isn't that great of a solution.)

The National Highway Traffic Safety Administration said it would launch a formal investigation into recent fires that destroyed two Tesla Motors Inc. Model S electric cars that had run over metal debris.

"The agency's investigation was prompted by recent incidents in Washington state and Tennessee that resulted in battery fires due to undercarriage strikes with roadway debris," the agency said in a statement. The probe would determine whether the vehicle has a defect that makes it dangerous to operate and could result in a recall and remedy.

Over a five-week period, two Model S sedans burned after hitting large pieces of metal on the highway in the U.S. Neither driver was injured. NHTSA declined to open an investigation after the first incident. There was a third fire in Mexico reported after a high-speed crash.

Musk then did what he does best, court publicity and make loud statements of dubious accuracy.

Tesla Chief Executive Elon Musk claimed that the automaker requested the investigation to refute fears that electric cars were more prone to fires than other vehicles.

But the NHTSA disputed that, saying its decision was an independent process.

“In regards to Tesla, the agency notified the automaker of its plans to open a formal investigation and requested their cooperation," the agency said, "which is standard agency practice for all investigations.”

So Musk went on to suggest that Tesla's rep was the only thing that could save mankind from extinction.

“If a false perception about the safety of electric cars is allowed to linger, it will delay the advent of sustainable transport and increase the risk of global climate change,” Musk wrote in a post to his blog on the Tesla website Monday night.

Err okay.

No doubt, Obama can fix this for him after the next OFA fundraiser.

Tesla fans will crow that the company repaid its debt and that it's unfair to call it government subsidized. It's no longer Obama subsidized, that's true. It still however is government subsidized.

Tesla didn’t generate a profit by selling sexy cars, but rather by selling sleazy emissions “credits,” mandated by the state of California’s electric vehicle requirements.

Absent this shakedown of potential car buyers, Tesla would have lost $57 million, or $11,400 per car. As the company sold 5,000 cars in the quarter, though, $13,600 per car was paid by other manufacturers, who are going to pass at least some of that cost on to buyers of their products. Folks in the new car market are likely paying a bit more than simply the direct tax subsidy.

So basically if you buy a real car in California, you're subsidizing Tesla's crony capitalist vehicles for celebs. This makes Musk's campaign for direct sales hypocritical. He's only against restrictive government monopolies that hurt consumers when he's not the one profiting from them.

More to the point, Tesla doesn't have a business model for selling cars, but for selling emission credits. Tesla isn't a car company. It's an ecoscam rent-seeking company using the Global Warming myth to profit from government regulation and confiscation. Like a lot of eco businesses, it exists to profit from Global Warming regulations, rather than to sell a product on its own merits.

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