Three Cheers for Tesla [Updated]

I have always been skeptical of electric vehicles, mostly because of my perception that electric car makers are more interested in subsisting on government subsidies than in competing on a level playing field for my business. So I was intrigued when I got an email this morning from Jeff Evanson, Tesla Motors’ Vice-President of investor relations. Evanson, a long-time Power Line reader, pointed out that the company raised over $1 billion last week, and will use a portion of those proceeds to pay off its loan with the Department of Energy ahead of schedule. This will make Tesla the only US-based auto maker with no government debt.

How about Ford, I asked? I thought they skipped the government bailout a few years ago. True enough, but Ford owes DOE under the Advanced Technology Vehicle Manufacturer (“ATVM”) Incentive Program, the same program that gave rise to the debt Tesla is about to pay off. So Tesla will be unique in not owing anything to the taxpayers.

I had heard of Tesla, but frankly knew little about it apart from the fact that it is considered a hot, trendy company. The company’s web site turns out to be impressive. This is Tesla’s Model S:

The company calculates the cost of ownership, in view of the fact that electrical charges are significantly cheaper than gasoline, here. They do take into account the availability of federal and state subsidies, which I would like to see repealed, but you can’t blame them for that. The company’s goal is to compete for business straight up, on a level playing field. Its vehicles should make that possible. Motor Trend named the Model S Car of the Year for 2013, and gushed over its performance and value:

The 2013 Motor Trend Car of the Year is one of the quickest American four-doors ever built. It drives like a sports car, eager and agile and instantly responsive. But it’s also as smoothly effortless as a Rolls-Royce, can carry almost as much stuff as a Chevy Equinox, and is more efficient than a Toyota Prius. … By any measure, the Tesla Model S is a truly remarkable automobile, perhaps the most accomplished all-new luxury car since the original Lexus LS 400.

The Model S starts at $58,570 and costs a mere 6 cents per mile to run–and that’s at California electricity prices.

All of this may be old hat to you, but it was news to me. Tesla’s success, financial as well as technical, suggests that the long-awaited era of electric vehicles may be closer at hand than we thought.

UPDATE: The New York Times apparently couldn’t fathom the possibility that an automobile company–an electric car company, at that–could induce people to invest in it voluntarily. What a foreign concept! From today’s NYT Corrections section:

An article on Thursday about Tesla Motors’ plans to tap the markets for more cash misstated, at one point, the way in which the company plans to raise the money. As the article correctly noted elsewhere, the company will sell new shares and debtlike securities; it will not raise new money from another Energy Department loan.

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