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

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.


LetThemEatRand Sun, 10/15/2017 - 22:03 Permalink

"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.

NoDebt LetThemEatRand Sun, 10/15/2017 - 22:17 Permalink

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. 

In reply to by LetThemEatRand

NoDebt LetThemEatRand Sun, 10/15/2017 - 23:00 Permalink

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.  

In reply to by LetThemEatRand

LetThemEatRand NoDebt Sun, 10/15/2017 - 23:17 Permalink

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?  

In reply to by NoDebt

NoDebt LetThemEatRand Sun, 10/15/2017 - 23:37 Permalink

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. 

In reply to by LetThemEatRand

LetThemEatRand NoDebt Sun, 10/15/2017 - 23:48 Permalink

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. 

In reply to by NoDebt

NoDebt Chupacabra-322 Sun, 10/15/2017 - 23:07 Permalink

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? 

In reply to by Chupacabra-322

Chupacabra-322 NoDebt Sun, 10/15/2017 - 23:34 Permalink

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.

In reply to by NoDebt

jaxville Chupacabra-322 Mon, 10/16/2017 - 03:57 Permalink

$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. 

In reply to by Chupacabra-322

Yen Cross Sun, 10/15/2017 - 22:13 Permalink

  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 typesYou can't even find a P/E ratio on TSLA, because there's NO earnings!AMZN = PE Ratio (TTM)255.07TSLA=PE Ratio (TTM)-73.28  YES! That's negative. Even the assclowns that charge for guidance won't post these figures. 

    ebworthen Sun, 10/15/2017 - 22:12 Permalink

    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.

    LetThemEatRand Normalcy Bias Sun, 10/15/2017 - 22:38 Permalink

    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.

    In reply to by Normalcy Bias

    jaxville Nobodys Home Mon, 10/16/2017 - 03:23 Permalink

    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.  

    In reply to by Nobodys Home