There Are 2.7 Trillion Reasons Why Tesla Won't Rule The World

Tyler Durden's picture

News of mass “performance-based departures” at Tesla, reported yesterday by the San Jose Mercury News has underscored the fact that Elon Musk and company have burned through a ridiculous amount of cash in the past two quarters alone, raising questions about why the company would choose to cut nearly 10% of its workforce when the assembly line for the company’s new Model 3 sedan has reportedly not yet been completed, and production remains woefully behind schedule as employees at the company’s Freemont factory have been forced to piece together the cars by hand.

And with Elon Musk reeling from a series of embarrassing revelations, Bloomberg is here to remind us of one of the many reasons why Tesla will never become a global automotive behemoth.

So far, the US government’s generous tax incentives for buyers of electric vehicles have helped bolster Tesla’s sales – a strategy that has been employed across Europe – and have sustained the market’s misguided conviction that Tesla will one day become a profitable enterprise.

But unfortunately, those incentives aren’t nearly enough to create the infrastructure to support Morgan Stanley’s forecast of 526 million electric vehicles operating globally by 2040. Building the charging stations and other infrastructure necessary would cost an astonishing $2.7 trillion, much of which would probably need to be allocated by governments.

Morgan Stanley says the problem requires a mix of private and public funding across regions and sectors. The investment bank’s strategists added that any auto company or government with aggressive targets would be unfeasible unless the infrastructure is in place.

As we’ve noted time and time again, the electric-vehicle industry is essentially being support by generous – and borderline anti-competitive - government subsidies. In China, which has aggressively pushed EVs as a potential remedy for its pollution problem, communist party officials have hit on an effective strategy for forcing consumers to favor electric vehicles. In Shanghai, where tens of thousands of people enter monthly lotteries for just a handful of license plates, consumers who buy electric cars are given license plates with little resistance.

Morgan Stanley expects China to become the largest EV market in the world by 2040, accounting for about a third of global infrastructure spending, Bloomberg reports.

But with Trump in office, it’s unlikely the US will prove so amendable to subsidizing Elon Musk’s ambitions for much longer.

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LetThemEatRand's picture

"As we’ve noted time and time again, the electric-vehicle industry is essentially being support by generous – and borderline anti-competitive - government subsidies."

Unlike the oil industry?  The Navy.  A global force for good.

Normalcy Bias's picture

Where is all of this electricity going to come from?

tmosley's picture

Worst case, just burn the oil that we would have burned in the cars as gas or deisel. More likely, LTFR's.

noob's picture

Powered by Bitcoin!

Boris Alatovkrap's picture

Two reason why Boris will not be control by Tesla Motor Co.



(Okay, Boris is not actually own Red Barchetta, but is inspire by great Rushian tune to never give in to State.)

Food Loaf Junkie's picture

100+ for "RUSH" reference, but song was stolen by Russians from Ukrainian folk song.  :-)

2_legs_bahhhhhd's picture

So, build out 3 trillion in infrastructure to recharge electric cars, then burn all the unused oil and gas to produce the electricity?

Able Ape's picture

They can print it, can't they?...

Chauncey Gardener's picture

Why, Unicorn farts and fairy dust from the People's Utopian Republic of Mexifornia.

NoDebt's picture

Not to worry, LTER.  They will use more "persuasive" tactics to push electric vehicles in the future.  They're going to outlaw internal combusion engines.  Problem solved.

So what if the infrastructure isn't in place?  So what if the power plants that produce the electricity pollute more than the internal combusion engines they're going to replace?  Once something is mandated, it has to be done.  And it will be done.  To hell with the misallocation of resources, we have a fucking planet to save (and well-connected political donors to enrich)!

Free markets and the "invisible hand" of consumer preference are what has really been mandated out of existence by governments.  Sure, they'll let you choose which burger joint or chicken shack restraurant you want to eat at, but energy?  Transportation?  Healthcare?  Fucking forget it.  That's gonna be 100% government mandated monopolies.


LetThemEatRand's picture

Persuasive tactics?  Like invading Iraq?  Libya?  Syria?  Threatening Iran?  Sanctions on Russia?  Doing business with and selling arms to Saudi Arabia?  You're worried about too much government interference over electric cars?

NoDebt's picture

Internal national issues?  Legal (or more accurately, REGULATORY) mandate is as strong as it gets (or will ever need to get) in terms of "persuasion".  I can't imagine GM or Ford taking up arms agains the US government.

Overseas wars.... well, yeah, you have to use more "kinetic" tactics but the results are never as predictable as legal mandates inside the US.  We'll never stop doing wars until the point the dollar collapses.  Where they happen up to that point is a random number generator.  North Korea looks like it's next on deck, with Iran not far behind.  Can't do shit about that because there are no votes on who we go to war with.  Hell, even the EPA doesn't have input on overseas wars.



LetThemEatRand's picture

Do you really not understand what the "petrodollar" means?  Jesus.  I thought you were one of the good guys.   How the fuck do you understand the problem with taxpayer funded (not to mention American blood funded) military action to defend the petrodollar and also show the back of your hand to any effort by American business to change the current paradigm?  

NoDebt's picture

Wake up and smell the coffee, my friend.  The Perodollar hegemony is yesterday's (last century's) news.  Electric cars WILL be coming to the US by government mandate against the internal combustion engine.  

As for the fate of the petrodollar..... does what we are doing in the ME look like setting up stable US-friendly regimes that can supply us with endless oil for the next century to you?  Doesn't look like that to me.  Looks like we're doing everything we can to DESTABILIZE and balkanize the ME.  They're pawns before the real competition going on between the east and west.  In the chaos they have no choice but to contine to use somebody's "world reserve currency".  The petrodollar is already dead.  But it's also alive and well and will be for a long time to come.  Until China or somebody kicks our ass and turns us into a vassal state like we did to Japan (whose currency is also doing just fine because we allow it) this will contine.


LetThemEatRand's picture

I woke up and smelled the coffee when Obama got together with SA and dropped oil prices from $100+/barrel to $40/barrel in a couple of months a few years ago.  If the USA wanted to take over the ME it would have many years ago.  The job of the US military is to open ME oil fields to international oil company drilling.  See Iraq as the most obvious example.  The oil industry knows they can't price themselves out of their own market.  So they use taxpayer funded military to keep their industry going.  It's as obvious as the Fed's control over the money supply, but I guess you love your V8 so you don't want to see it.  I love my '68 Mercedes 280sl that pollutes like crazy so this is not some greenie talking to you. 

jaxville's picture

  Fuck that pollution bullshit....When I pull the head off my engine, I want to hear an echo when I shout into the chambers.

Chupacabra-322's picture

@ NoDebt,

They’ll never take the Guns.


They’ll never take the combustible engine.

But most importantly, they’ll never take the Guns.

NoDebt's picture

The guns will be much more difficult to take.  The internal combustion engine they'll take easily.  I guarantee there won't be a single vote in Congress about it or referrendum put up for a vote.


LetThemEatRand's picture

Love you NoDebt, but I disagree.  People love their cars.  Now if you made people pay for gasoline what it actually costs, maybe.

NoDebt's picture

If we paid for what gasoline actually costs we're be paying about $1.40 a gallon.  

You'll love your government-mandated electric car, too.  You just won't like your electric bill and government mileage tax to use it.  



LetThemEatRand's picture

"If we paid for what gasoline actually costs we're be paying about $1.40 a gallon"

That's why all of our Presidents for the last 40+ years have kissed the ring of the King of SA?  And why we march around the world?

You're not factoring in the cost of keeping the spice flowing. 

Chupacabra-322's picture

Guns & Cars are as Americanna as Baseball & Apple Pie.

That culture is here to stay.

Shit, if they attempt to take the cars that might just bring out the Guns.

NoDebt's picture

Perhaps I am not making myself clear.  They're not going to take cars away.  They're going to mandate they be electric cars.  They will suck, you wil hate them, but they don't care.  Your children, having known nothign else, will think they are awesome.

The internal combusion engine is dead.  Not because it is economically unviable, but because the government will simply outlaw it.  You can't buy a full-auto machine gun.  You can't buy a rocket launcher.  You can't even buy DDT to control mosquitoes.  And, eventually, you won't be able to buy an internal combustion engine.  They are FAR too dangerous for you to own one.  Your weedwacker might start catastrophic global warming!  (BTW- your lawn mower and weedwacker will all be mandated electric, too.)

Unlike guns, which, though restricted, have constitutional protections (for now), internal combustion engines do not.

How am I being unclear about this?


Chupacabra-322's picture

Regularly agree with 99% of what you post.

However, your dead wrong on this.

My twenty month old won’t be Indoctrinated to love Statist much less anything in this Dystopian Reality we find ourselves in.

Check the scoreboard NoDebt. The Board of Director old fucks have run their course. It’s only a mater of time. They fear it, we know it.

And, yea, If need be, I can own a machine gun. All leagal in trust. However, I’d rather drop the 25k in other areas.

These Pure Evil War Criminal Treasonous Seditious Psychopaths can outlaw all they desire. No Patriots worth his or her heart & soul would ever comply.

And, the “Constitution.” We don’t have one. Only the illusion of one. Prepare accordingly NoDebt. Either we hang together, or hang separately.

By the way, didn’t junk you. Just disagree with you. Cheers.

NoDebt's picture

I understand.  Just realize I have $20 real cash money says I'm right about electric cars in the US.  It's a done deal just like getting rid of leaded gasoline was a done deal 40 years ago.  And nobody got to vote on that, either.


jaxville's picture

  I think you might be underestimating the power of the oil lobby.

jaxville's picture

$25,000 for a full auto?!?!  Good grief. 

    Had to remove the part explaining how my friend did the conversion.  Yeah, I know....don't let fear or common sense hold you back.

  The downside was that after we were done and my friend removed the modification, the rifle never really shot as well as it used to. cost a lot less than $25,000.  A small price for the exuberance of youth.


ThirteenthFloor's picture

All cars use fossil fuels.

Tesla has no convertible or trucks...pretty hard to rule the world with half the TAM business model.

lasvegaspersona's picture

Beatty Nevada (between Bumfuk and Nowheresville) has a station for 8! Teslas...and one Volt for charging. All were empty! If you do not have range anxiety by the time you get to Beatty you are stupid or lost. I don't think Tesla drivers ever go anywhere.

buttmusk's picture

How much does Musk pay in taxes compared to oil companies? How much tax do BEV owners pay for use of roads compared to ICE vehicles? How much money does the middle class pay to subsidize 3rd vehicles of the 1%? I’ll drop the mic before u finish

Yen Cross's picture

  Tyer I'd rather play with Lincoln Logs, or my old rusty Erector Set.


  • PE Ratio (TTM):

    254.55 for Oct. 13, 2017
    View 4,000+ financial data types You can't even find a P/E ratio on TSLA, because there's NO earnings! AMZN = PE Ratio (TTM)255.07 TSLA=
    PE Ratio (TTM)-73.28  YES! That's negative.  Even the assclowns that charge for guidance won't post these figures.


    MozartIII's picture

    So Environmentally friendly companies are expected to have earnings??? Good Information to have.

    Yen Cross's picture

      BTFDeadATH. Your tax $'s are funding these ponzi schemes.

    Nobodys Home's picture

    Shh! I'm playing the stawk mahket!

    Yen Cross's picture

        Don't be coy. You're eating a bag of Doritoes in your Mom's basement.

    Nobodys Home's picture

    Close! It's Veggie sticks in my ridiculously priced townhouse apartment!

    Nobodys Home's picture

    Did you have the erector set with the pulley crane or the motorized crane?

    Yen Cross's picture

       What's your address? I want to mail you a box of Kleenex. You seem to be lacking for attention?

     It's obvious you have nothing of financial value to offer the forum?

    Nobodys Home's picture

    It's just that I miss you. We used to talk. Now you cast me out into the cold. I thought we were buds!

    Ok..What do you think of Trump possibly offering the Fed chair to the author of the Taylor rule?

    lolmaster's picture

    Yea Musk may be a top tier psychopath but his competitors are evil cunts too. Fuck em all

    ebworthen's picture

    Let's see..."electric" cars run on natural gas, petroleum, and coal-fired electricity?

    Not to mention they are chock-full of toxic:  plastic, acids, and flammable battery crap?

    Green my ass!  Nothing but a virtue-signaling iPhone on wheels; an "iCare" self-esteem trinket.

    SillySalesmanQuestion's picture

    I find it amusing, that one of the most technically innovative, state of the art, automated factories in the world, is banging out parts by hand...

    Normalcy Bias's picture

    I love seeing these smug douchebags preen about their green superiority, when all they've done is move the exhaust pipe from the back of their car to the power plant.

    LetThemEatRand's picture

    When did we all become shills for the oil industry?  For fuck's sake, we can generate electricity from water.  The Hoover dam does it.  We can generate electricity from burning all kinds of things other than fossil fuels.   There is also wind power.  Tide power.  Solar power.  Nuclear power.  Coal.  It's not an either/or with regard to green or oil.  It seems the oil industry has made all of you their bitchez.

    Nobodys Home's picture

    Solar hydrolyzing water = Hydrogen. Nothing greener than utilizing the most abundant element in the universe.

    jaxville's picture

    Except that it is a process that requires a little more energy input than that which is released by combustion.

       You better hope for a lot of cloud free days to even come close to the energy produced by combustion of hydrocarbons.  Actully maybe you can put your panels on Mercury for a chance to make that viable. 


    ClassicalLib17's picture

    "There is also wind power.  Tide power.  Solar power." What do the State of Australia, Denmark, and Germany, respectively, all have in common? The highest electric rates in the world. What else do they have in common? Question: Do you have any green energy investments that would not turn a profit "but for"...

    LetThemEatRand's picture

    What does an aircraft carrier cost?  How much does it cost to invade Iraq, Syria, Lybia, and how much will Iran cost?  Cheap oil is only cheap if you take out the cost of the military, including the boys and girls who die in our wars.  But who cares about them, right?  Saddam did 9/11 and it was necessary, right?