Beware of Elon Musk, Who ‘Didn’t Build That’

The truth is that Musk went rent-seeking with the government by way of his network, got a loan to demonstrate that Tesla was an operational company with real possibilities, and used that fact to go to Wall Street to raise capital. It is a lot easier to raise capital when you have the federal government demonstrating it believes in you.

But hey, it’s not like Musk and Obama are buddies. Then again, they did have dinner in February 2015, Musk donating almost $36,000 to the 2012 Obama Victory Fund, and another 30 grand to the Democratic National Committee.

This back-scratching feels like it extends to SpaceX.  On Sept. 1, its Falcon 9 rocket exploded on the launch pad during a test run. It took less than four months for the FAA to approve SpaceX’s explanation for the explosion and to schedule a new flight.

Four months?

Remember how NASA flipped out after any mishap involving the space shuttle, and would ban flights for years until they figured out what was wrong? As of now, SpaceX is privately funded. Yet the obvious capital injection by the government seems inevitable. After all, the government can outsource any of its orbital needs to SpaceX, which would naturally mean offering it a massive loan in order to hasten that process. With this week’s successful launch, get ready for more government money for Musk.

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SpaceX lost a quarter of a billion dollars after one of its rockets blew up

“The company lost $260 million in 2015 when one of its Falcon 9 rockets, carrying two tons of cargo to the international space station, exploded shortly after liftoff,” writers Rolfe Winkler and Andy Pasztor reported for The Journal.

The financial hit was so hard because of launch delays. SpaceX did an internal investigationand made changes to its rocket fleet and operations. It wouldn’t launch again until December 2015 — when it landed its first Falcon 9 booster on a launch pad — missing out on six of 12 planned launches.

A Falcon 9 launch costs third-parties about $62 million, which means SpaceX missed on its projected launch revenue by roughly $370 million.

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ELON MUSK HAS DELIVERY ISSUES

But, while his grand gestures inspire awe and curiosity, they often fall short in the execution. Since 2011, Tesla has failed to meet Musk’s product-launch, production, and financial-performance promises more than twenty times, according to an analysis by the Wall Street Journal. Even a private showing, in early January, of Tesla’s new Gigafactory, in Storey County, Nevada—which Musk claims is on schedule to mass-produce lithium-ion batteries at rock-bottom costs by 2018—didn’t instill confidence in Musk’s ability to achieve his stated goals. As the Pacific Crest Securities research analyst Brad Erickson said in a note, the tour left “much to the imagination.”

And in September an explosion destroyed an unmanned SpaceX rocket on the launch pad during a fuelling exercise—an incident that called into question the viability of Musk’s radical notion to refuel craft en route, with astronauts on board. A little more than a year earlier, a NASA-funded SpaceX rocket carrying cargo destined for the International Space Station exploded two minutes after lift-off, destroying the payload. A NASA report on that incident raised questions about quality standards at Musk’s company.

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SPACEX CREW DRAGON TEST FLIGHTS DELAYED (AS USUAL)

In a revised schedule released by NASA on Dec. 12, 2016, it was revealed that SpaceX has delayed test flights for its Crew Dragon spacecraft by a number of months. According to Space News, this is, in part, due to the Sept. 1 Falcon 9 pad explosion.

The NASA statement gave no reason for the delays other than it reflected a “fourth quarter update” from both SpaceX as well as the Boeing dates that were revised in October 2016.

Before the release, SpaceX was still targeting a May 2017 uncrewed test flight and a crewed flight in August 2017. However, that has been pushed to November 2017 and May 2018, respectively.

SpaceX is still investigating the exact cause of the Sept. 1 explosion. The company was hoping to return to flight as early as this week; however, last week, it was revealed the company needed more time to finalize their findings. Currently, the first flight is scheduled for early January 2017. That flight is expected to send 10 Iridium NEXT satellites into orbit from Vandenberg Air Force Base in California.

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SpaceX customer switches a satellite launch order to European competitor

A SpaceX customer has switched to a European competitor for one satellite launch, citing delays in the Hawthorne space company’s schedule after a September explosion.

Satellite communications firm Inmarsat said Thursday that it has signed a contract with French rocket company Arianespace to launch a satellite for the European Aviation Network, a broadband system comprised of both satellites and ground networks.

That satellite is set to be launched in mid-2017 from French Guiana.

Inmarsat had originally planned to launch the satellite with SpaceX, but said it decided to switch to Arianespace “following the delay in SpaceX’s launch schedule.”

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Stop Elon Musk’s Tax Money Gravy Train

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.

Renewable Crony Capitalism

Already grossly subsidized, Musk’s SolarCity has become an albatross of waste, fraud, and abuse of taxpayer dollars. As legitimate earnings and cash become even scarcer for SolarCity, its entanglement in the Tesla empire suggests that a drastic reckoning is not only imminent but emboldening Musk to become more outlandish and reckless.SolarCity has been doubling down on the failed model of taxpayer support.

Notably, SolarCity is run by Musk’s cousins, Lyndon and Peter Rive. During his chairmanship at SolarCity, Musk’s family enterprise has taken in billions of taxpayer dollars in subsidies from both the federal and local governments. But the subsidies and sweetheart deals were not enough, as losses and missed projections continued to mount.

Ultimately, rather than endure the embarrassment of collapse and further damage to the public image of Musk and Tesla, the cousins conspired to have Tesla simply purchase SolarCity this year. The conditions of the deal screamed foul play.

To say nothing of what sense it might make for an automaker to purchase a solar installation company, Tesla stockholders were being forced to absorb a failing, cash-burning company and pay top dollar to do so.

While cost-cutting and corporate restructuring should have been the priority for a company swimming in debt and burning through available cash, SolarCity, in fact, has been doubling down on the failed model of taxpayer support. The desperate thirst for handouts has manifested itself in some of the murkiest political waters imaginable.

Thanks to Musk’s cozy relationship with New York Gov. Andrew Cuomo, a Democrat, the state has granted at least $750 million of its taxpayers’ money to SolarCity, building the company a factory and charging it only $1 per year in rent.

It would be hard to imagine such an operation would not be lucrative for its shareholders. And yet, somehow, SolarCity has never made a profit.

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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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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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SpaceX and ULA see the future of space launching very differently

The heads of United Launch Alliance and SpaceX aren’t just rivals for launching U.S. military and commercial satellites into orbit. They don’t even see the business the same way.

Tory Bruno, CEO of Centennial-based ULA, and Gwynneth Shotwell, president of Hawthorne, California-based SpaceX, were the biggest presences on a panel Thursday closing the Space Symposium, the biggest annual gathering of U.S. military and private-sector space officials.

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