Contra-Capitalist Tesla: Enron Lives!

The company has rarely turned a profit in its nearly 15-year existence…. It burns through cash at a rate of $7,430 a minute, according to Bloomberg. It has failed to meet production targets for its $35,000 Model 3, for which more than 400,000 people have already put down $1,000 deposits, and on which the company’s fortunes largely rest.

Government Subsidies

Much of the blame for the Tesla fiasco goes to government, which, in the name of green virtue, decided to subsidize the hobbies of millionaires to the tune of a $7,500 federal tax credit per car sold, along with additional state-based rebates. Would Tesla be a viable company without the subsidies? Doubtful. When Hong Kong got rid of subsidies last year, Tesla sales fell from 2,939 — to zero. It may be unfair to describe Tesla as Solyndra on wheels, but only slightly.

But the Tesla story isn’t just about the perils of misdirected government-led development and clever rent-seeking entrepreneurs. And it isn’t about the virtue signaling of those who like their environmentalist bona fides to come with vegan-friendly upholstery. It’s about hubris and credulity — the hubris of the few to pretend they know the future and the credulity of the many to follow them there.

Electric vehicles were supposed to be the car of the future because we were running out of oil — until we weren’t. And Musk was supposed to be a visionary because he spoke in visions, for which there will always be a large receptive audience. Casting about for a cause and a savior to believe in is what too many Americans do these days, perhaps as a result of casting off the causes and saviors we used to believe in.