Conservative Group, Liberal Bloggers Trade Shots Over Elon Musk’s Taxpayer Subsidies

A conservative advocacy group has a special name for liberal bloggers who have rushed in to defend the business practices of Elon Musk, the multibillionaire co-founder of taxpayer-funded renewable energy and space technology companies. It calls them “stoogers.”

Despite “mounting evidence of cronyism by his crumbling empire, Elon Musk has tapped stooge-like left-wing bloggers to come to his defense,” according to a press release from Citizens for the Republic, a grassroots conservative group based in Alexandria, Virginia.

The group bitingly defines a “stooger” as “a liberal person … living in their basement spewing left-wing prevarications and slander via blogs, which few read.”

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Tesla Stock Target Cuts Due To SolarCity Deal Starting To Come In

It rather sounds like Osborne’s biggest concern is actually with Tesla itself rather than SolarCity, although he hasn’t made any changes to the Tesla side of the equation. He’s still modeling for a ramp of early Model 3 sales in the first half of 2018, but he’s starting to be concerned that this is too ambitious because of the lack of announcements regarding prototypes, suppliers ramping, or other details. Also he notes that the previous ramps and production delays on the Model S and Model X could mean that delivering the Model 3 by 2018 is just too ambitious of a target

The Cowen analyst added that the Gigafactory is a key piece of the puzzle and for Tesla to become cash flow positive, so he will be monitoring the factory’s ramp. So far, the automaker has spent $504.3 million in capital expenditures on the Gigafactory, which is only 25% of the expected total, so Osborne would like to see signs that the company’s partners are indeed ramping on the other $2 billion to $3 billion. He also warns that if battery costs remain at around $200 per kilowatt-hour when the company is targeting $100 per kilowatt-hour, he doesn’t see how it’s possible to reach a 20% gross margin for the Model 3.

Further, he’s concerned about the many EVs from competitors that will be landing on the market within the next one to three years.

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SEC slaps Tesla’s wrist over accounting practices

The Securities and Exchange Commission has been writing Tesla some strongly worded letters about its accounting practices.

The regulator criticized Tesla for using “individually tailored” measurements in its August earnings release, according to a series of letters between Tesla and the SEC reported by The Wall Street Journal.

The regulator has been cracking down on the use of non-GAAP information in earnings releases, the report said.

The SEC letters also criticized Tesla for failing to make a “substantive case” for using non-GAAP figures. An expert consulted by the Journal noted the strong language of the letters.

Tesla announced in early October that it would stop reporting non-GAAP figures. The company had previously defended their use by saying non-GAAP figures better reflected their finances.

Tesla did not return a request for comment.

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Elon Musk’s growing empire is fueled by $4.9 billion in government subsidies

Los Angeles entrepreneur Elon Musk has built a multibillion-dollar fortune running companies that make electric cars, sell solar panels and launch rockets into space.

And he’s built those companies with the help of billions in government subsidies.

Tesla Motors Inc., SolarCity Corp. and Space Exploration Technologies Corp., known as SpaceX, together have benefited from an estimated $4.9 billion in government support, according to data compiled by The Times. The figure underscores a common theme running through his emerging empire: a public-private financing model underpinning long-shot start-ups.

“He definitely goes where there is government money,” said Dan Dolev, an analyst at Jefferies Equity Research. “That’s a great strategy, but the government will cut you off one day.”

The figure compiled by The Times comprises a variety of government incentives, including grants, tax breaks, factory construction, discounted loans and environmental credits that Tesla can sell. It also includes tax credits and rebates to buyers of solar panels and electric cars.

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It’s Time to Stop Spending Taxpayer Dollars on Elon Musk and Cronyism

From Enron to Bernie Madoff, at the end of every great American financial scandal, the totality of the perpetrators’ greed seems to be matched only by the public’s incredulity at how such a thing could be allowed to happen.

And thanks to Elon Musk, there’s a good chance we may all be asking this question again soon.

The Senate Finance Committee and the House Ways and Means Committee have launched a probe into tax incentives paid to solar companies, according to The Wall Street Journal. The committee probes, led by their respective Republican chairmen, Rep. Kevin Brady of Texas and Sen. Orrin Hatch of Utah, have found an appropriate and disturbing target to begin this work.

SolarCity, a solar installation company set to be purchased by Tesla Motors Inc., is one of the seven companies named in the initial investigation.

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Tesla’s Model 3 Base Price Will Be $15,000 Higher Than Musk Claims

Having seen one too many lazy recent media reports touting the upcoming “$35,000” Tesla (NASDAQ:TSLA) Model 3, I decided to update my article from nearly two years ago with some fresh numbers explaining why TSLA will never be willing to sell it in volume at anywhere close to that price. Here’s the math…

Tesla’s Q3 2016 automotive revenue (excluding leased cars) was $1,917,442,000 less $139,000,000 in ZEV credit sales = $1,778,442,000. That revenue came from 16,790 non-leased cars (see. p.28 of the 10-Q), which means the average car sold for $105,923. Cost of automotive sales was $1,355,102,000, which means gross profit (excluding ZEV) was $1,778,442,000 minus $1,355,102,000 = $423,340,000, which means gross profit per car averaged $423,340,000 divided by 16,790 cars sold = $25,213. Thus, Tesla’s cost to build its average car was the $105,923 in average revenue minus $25,213 in average gross profit = $80,710.

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Tesla, SpaceX, SolarCity, and the Cancer of Cronyism (Plus Post-Election Humor)

The vision is appealing, but in the short run it looks challenging. Tesla may have surprised investors by turning a narrow — and rare — profit in the third quarter, but the vast bulk of its current $28 billion market capitalization is predicated on Mr. Musk’s turning the company from a niche supplier into a truly mass manufacturer of electric vehicles. Tesla’s shares have fallen about 16 percent since the company unveiled its SolarCity bid in June, reducing the value of the all-stock deal to around $2 billion.

Hitting a self-imposed target of cranking out 500,000 cars per year by 2018, from a current run rate of around 100,000, already looked daunting. Tesla, after all, has a history of missing production and sales targets; its Model X S.U.V., for example, was delayed by problems with its falcon-wing doors.

Now Mr. Musk and his team also have a major acquisition to worry about. Throw in his continued role as chief executive of the rocket venture SpaceX, and he has a lot up in the air. Moreover, to deliver on its promises, Tesla will probably need to ask investors for fresh capital at some point next year.

For most chief executives, all this would make 2017 a make-or-break year. But Tesla investors’ overwhelming support of the SolarCity deal suggests that Mr. Musk is in a different category. Even if the wheels start to come off, he will probably be able to persuade the faithful to keep him in place and to hand over more cash. That may make Mr. Musk’s all-electric vision a self-fulfilling prophecy, no matter the cost.

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Donald Trump and Subsidies: New Wrinkle for Elon Musk’s Tesla-SolarCity Plans

Analysts expect the company to post another net loss for this year. The company posted a third-quarter net loss of $225 million, 4% less from a year earlier and less than analysts had expected. However, it also cut its forecast for the volume of panels it expects to install this year to the equivalent of 900 megawatts from 1,250 megawatts earlier this year.

Shareholders will decide the merger’s outcome in a meeting at 1 p.m. Pacific Time or 4 p.m. Eastern on Thursday in Fremont, Calif.

Cowen & Co.’s Mr. Osborne expects Tesla and SolarCity shareholders to approve the deal.

Two shareholder proxy services have differing opinions about the proposed merger. Institutional Shareholder Services Inc. endorsed it earlier this month, saying it was needed to create an integrated sustainable energy company. But rival firm Glass Lewis & Co., urged shareholders to vote no, calling it a “thinly veiled bailout” for SolarCity. Mr. Musk is the chairman and largest shareholder of both companies.

Shares of Tesla closed Wednesday at $183.93, off 23% this year. SolarCity shares closed at $19.83, down 61% this year.

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Elon Musk Faces Epic Juggling Act After Tesla-SolarCity Deal

The vision is appealing, but in the short run it looks challenging. Tesla may have surprised investors by turning a narrow — and rare — profit in the third quarter, but the vast bulk of its current $28 billion market capitalization is predicated on Mr. Musk’s turning the company from a niche supplier into a truly mass manufacturer of electric vehicles. Tesla’s shares have fallen about 16 percent since the company unveiled its SolarCity bid in June, reducing the value of the all-stock deal to around $2 billion.

Hitting a self-imposed target of cranking out 500,000 cars per year by 2018, from a current run rate of around 100,000, already looked daunting. Tesla, after all, has a history of missing production and sales targets; its Model X S.U.V., for example, was delayed by problems with its falcon-wing doors.

Now Mr. Musk and his team also have a major acquisition to worry about. Throw in his continued role as chief executive of the rocket venture SpaceX, and he has a lot up in the air. Moreover, to deliver on its promises, Tesla will probably need to ask investors for fresh capital at some point next year.

For most chief executives, all this would make 2017 a make-or-break year. But Tesla investors’ overwhelming support of the SolarCity deal suggests that Mr. Musk is in a different category. Even if the wheels start to come off, he will probably be able to persuade the faithful to keep him in place and to hand over more cash. That may make Mr. Musk’s all-electric vision a self-fulfilling prophecy, no matter the cost.

Read More