On Tesla: Open Letter Proposal For Your Consideration

OCT 10 2018 BY STAFF 152

This is an open letter to Tesla and Elon Musk that was shared with InsideEVs.

*This article comes to us courtesy of author Sanjeev Dhanda. If this is something that our readers appreciate, we look forward to sharing more of Sanjeev’s efforts. Let us know your thoughts in the comment section below.

Dear Elon, Tesla Employees, and Tesla Supporters,

This open letter to you is in regards to a proposal for how to accelerate the Tesla mission: to accelerate the world’s transition to sustainable transport!

Given recent interviews where Elon has rightfully pointed out that even if we manage to replace 100% of car sales with electric vehicles, replacing all cars on the road would lag for 25 years while old cars live out their life cycle. If we are going to accelerate the adoption of EVs, we need to take advantage of programs established by conscientious governments that see the same writing on the wall.

In the process of building the safest car ever built, Tesla has also learned a lot of lessons of how to build an efficient EV factory. While I’m sure others will eventually learn to do similar things, there is a ticking clock when it comes to global warming, and many governments of the world are aware of this.

The Paris Accord saw 175 countries commit to reduce global emissions and prevent the earth from warming more than 2°C. This came with a financial commitment to spend $100 billion per year towards helping achieve this goal. Unlike Wall Street, which is primarily concerned with profit, many countries are more concerned about the survival of their coastal cities and avoiding the largest refugee crises the world has ever known. I propose that: Tesla should solicit bids from nations interested in hosting a Model 3 factory.

For sovereign wealth funds and governments, this makes sense from both a profitability and mission perspective:

  • Governments have the ability to cut the cost and time required to build a factory by expediting the permitting process and contributing land, power and tax incentives
  • While the battery production is fully automated, Elon Musk has pointed out that when it comes to the production of cars, at least for the near future, humans are better at certain aspects than robots. As such, building a factory will not only provide temporary work to construction crews, it will also provide quality jobs for the communities that house these factories.
  • At present, Tesla is easily producing ~4100 Model 3 cars/week (in addition to two thousand Model S and X cars). If we assume modestly that Tesla can produce at least 4000 cars/ week, and make a profit of $5000 per car, that represents an annual profit of $1 billion.
  • The estimated cost to build the Nevada Gigafactory was $5 billion; however, only $1.3 billion has been spent so far. Spending in this range in not uncommon for Infrastructure projects; however, governments can help cut this cost by providing the land themselves, and help improve the operating profits by providing unused electrical capacity at discounted rates (where applicable).
  • Governments that make this investment can ask for a sensible profit sharing model. For example, they could keep all profit until made whole or 50% until paid double — and keep a fair royalty in perpetuity. Governments could even choose to forgo the royalty knowing their Paris Accord spending wasn’t originally earmarked to make a return, and the cars generated by the factory will produce additional tax revenues for the local community!

Why is this a good idea for Tesla?

  • It’s not uncommon for franchisees to pay a franchise fee. Similarly, with enough interest, Tesla can do the same, with the intention of using the fees to pay down the debt incurred for the R&D of the Model 3 or to accelerate the production of the Model Y or design of the semi or pickup trucks. Given the impact and profit these factories will have, something on the order of a billion dollars isn’t unreasonable and it would help expedite the launch of the Model Y.
  • By providing a sensible profit sharing model, Tesla can accelerate its production capacity and while avoiding incurring debt on its balance sheets. Further, the overall cost to produce cars can be reduced by finding win-win opportunities and putting unused parcels of land governments can spare to work – even revitalizing communities that need an inflow of capital to help them grow.

Let’s consider one example, my home country: Canada.

  • Canada has the best renewable energy grids in the G8 (with 63% of its energy being produced via hydropower)
  • Canada has the capability to continue building out its hydropower grid, and just like everywhere else, using batteries to store unused power generated overnight can double the impact of the existing hydro production. Needless to say, Canada is capable of reducing the cost to make sure Tesla’s factories and Canadians that drive the cars use renewable energy.
  • Energy prices are also low in Canada, particularly in Quebec and Manitoba. Which means the cost for running the robots in the factory will be very low – even if it isn’t subsidized.
  • Canada also has existing mines that yield Cobalt, which is a key ingredient for battery production.
  • Canada also has a rich history of automotive production and free trade agreements with the large US market (When 75% of the car is made in North America secured in the USMCA)
  • Canada would be well served to spend some of its Paris Accord commitments on building out EV factories, and Tesla is a good place to start!

There are many other countries that could also stand to benefit, and asking states to compete was an effective strategy employed during the construction of the first Giga Factory. Doing the same with countries now makes a lot of sense as well.

Thanks for your consideration, from a Tesla owner, supporter, and fellow air breather on planet Earth.

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152 Comments on "On Tesla: Open Letter Proposal For Your Consideration"

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tftf

“The estimated cost to build the Nevada Gigafactory was $5 billion; however, only $1.3 billion has been spent so far. Spending in this range in not uncommon ..”

Completely wrong. Look af Tesla and PENA filinfs with the GOED in Nevada.

Google for PTD costs on the GOED website.

tftf

It will be $4-5 Billion in total (at least, maybe more due to expansions).

TJKR

I googled PTD and got Pokemon Tower Defense.

Taylor Marks

Both of you need to stop using Google. Google doesn’t return the same results for everyone – it returns whatever it thinks you personally will agree with. Google is a yes-man that just echoes whatever sentiments you already have.

Both of you should switch to DuckDuckGo. It doesn’t return the facts (or alternative facts) that you agree with most – it simply returns the same best answer to everyone for a given query.

ffbj

I Googled about this, and you are correct.

Martin Lacey

LOL 🙂

Scramjett

Reminds me of a Colbert joke when he was promoting MS Bing years ago… “Bing is the best search engine on the internet. I know because I Googled it.”

Mark.ca

I remember at one point Bing’s most frequent search was “google” …lol.

KumarPlocher

Thanks for the reminder!

TJKR

I DuckDuckGo’ed PTD and got Pokemon Tower Defense.

windbourne

Apparently, DDG thinks that will make you happy.

Taylor Marks

The top result I got was “PennTeleData”? I have no idea what that is. I suspect you didn’t actually run the search with DDG, or that wasn’t your exact query, or if you did, that wasn’t your actual top result.

TL

The premise of this open letter is misguided. The Government is not an efficient resource allocation model… take a look at your local DMV office or worst case, Venezuela! 🙂 Let the free market work and we will all enjoy a sustainable future.

Mark.ca

Take look at Norway…get a tissue if your eyes start to bleed.

Another Euro point of view

You mean big oil Norway ?

Scramjett

I’m not from Norway, but it’s my understanding that they mostly export their oil and don’t use much of it themselves. What they do instead is use the money to invest in themselves, including clean energy and sustainable projects. I think Sweden is similar as well.

Jason

Sweden has no oil, just Ikea and Volvo.

Scramjett

Ah, got it. 🙂

Brian

And an auto plant which made Saab. My vote is for Sweden for the car factory and a Gigafactory in Chile. Of course both in China as planned.

antrik

Sweden is already getting the Northvolt gigafactory… They should leave something for the rest of Europe! 😉

James

`Volvo is owned by the Chinese

William

Norway has EV drivers that “just hammer it!”

Scramjett

Is that a very subtle Thor reference?

mzs112000

No, that is a Bjorn Nyland reference….
He is from Norway, only drives EV’s, and he likes to drive fast(hammer it), and overtake fossil-powered cars(which Norway has already done as far as new-car sales go).

Scramjett

Ah, thanks! I know who Bjorn is and seen some of his videos, but didn’t know that bit about him.

Terawatt

Norway has not decided to take a giant bet on one company, enriching it with public funds in the process.

Governments can stimulate EVs in many ways. A carbon tax is the most logical way to target the use of carbon, wherever it takes place – the economists favour this solution. But making long flights and driving much more expensive is also anti-social. In my opinion, a carbon tax should be introduced, but it should start low and phase in over many years – giving everyone more time to adapt and reducing the anti-social impact. Incentives should be opposite, start high and phase out over many years.

They can certainly also buy a whole lot of electric cars. But what cars to buy shouldn’t be a political decision, it should be the outcome of a competition open to all manufacturers who can meet the criteria. As long as the criteria are relevant and based on the public interest, such as zero local emissions and a low total footprint, Tesla could of course win a lot of business this way.

Get Real

Lmao at serial ant-Tesla Terratroll as he whines about Norway incentivising EVs and dis-incentivising polluting LICE cars and how that helps Tesla as the only company all-in.

windbourne

It is not a big bet to do Tesla. In fact, just the opposite.

philip d

The letter isn’t stating that the governments run operations. It is proposing something not much different than how the gigafactory in Nevada came to be. Nevada wanted the jobs from a Tesla/Panasonic factory so the GOVERNMENT of Nevada gave Tesla huge tax incentives to lure them to their state over other states and their incentive proposals. They also got a discount on electricity rates for 8 years to sweeten the deal further. These kind of competitive offers are common among states competing for jobs.

This guy is simply stating that governments from other countries could benefit from getting in on the competition. I think this already had been happening. I know from news reports over the years that some countries had reached out to Tesla to informally offer them incentives to build assembly or battery factories in their country. But clearly the incentives weren’t enough and I think that is what this guy is trying to get at. They could go beyond what Nevada had offered Tesla to lower upfront investment even more while recouping some of that investment by profit sharing or some other mechanism as well as of course providing local jobs.

Pushmi-Pullyu

It is proposing something not much different than how the gigafactory in Nevada came to be.”

Oh, it’s proposing something much different from Tesla’s deal with the State of Nevada. This letter (or more correctly, op-ed) suggests that Tesla should have given the State of Nevada all its profits until the value of the land was fully repaid, or half its profits until twice the value was repaid! And on top of that, Nevada would get yet another slice of the pie from royalties in perpetuity!

This is just another example of the wholly unrealistic pie-in-the-sky wishful thinking that gives “Greenies” such a bad name in certain quarters. I find it amazing that InsideEVs gave this guy a sounding-board here.

Will

Agree Pupu

antrik

The letter is actually too vague to tell for sure: but the way it talks about franchising etc., I think the suggestion is that the factories should actually be more or less state-owned, with Tesla licensing their technology in exchange for a cut of profits?…

Will

Sounds like the Soviet economy. Get licensed factories and sell goods for the state while steal ip at the same tim for other use in RD

MDEV

Yes free market like a Tesla sales ban in Texas?

William

It’s always best to try and remember, that Texas is the “Lone Star State” (as its former status was a struggling independent republic, trying to separate away from Mexico) IIRC.

Texas doesn’t want to separate from its ICE dependency, that is until its last remaining drop of Dino “GO” Juice, is pumped and/or refined from the ground, or delivered by KS-XL Pipeline, from our good neighbors, up in the Canadian Tar Sands.

Will

Texas lost that state status in the civil war. It’s federal republic not Confederate states where each state decides their own destiny

ba

Free/fair market is the best way to advance technologies and improve life with regard to the short term (quarters to a few years) or even medium term (few years to a decade or so.) But long term goals are not served well by a free/fair market.

The global warming threat can be seen, but it is only going to be great enough to become critical in the long term. There is no short term profit to excite the machinations of business, and bring to bear the magnitude of investment that might have a chance at averting the danger. So, it would be wise for the government to use its resources, not to solve the problem outright, but to understand it and motivate business and individuals to develop the applied technologies, products and processes to solve it.

Sustainable2020

You seem blind to,the way the world, business, and transactions really work now. Try to,get a loan for a power plant. Financing for natural gas as fuel as opposed to solar or wind is twice as much. Fossil fuels are on their way out….let’s hasten that transition

Mark.ca

“Free market”
No such thing!

Martin Lacey

Free market is a misnomer – there’s no such thing. Look at the EU “compromising” on future emissions standards or the USA legacy brands pushing for standards that fit their profit margins. Or VWAG being the only legacy automaker fined to date over dieselgate.

Scott Franco

There would be a free market if you would stop electing a** clown politicians who flunked economics 101.

Mark.ca

Are we allowed to comment on other nation’s politics? Shouldn’t our heads be deep in the sand by now?

Pushmi-Pullyu

Quite true. The closest thing you’ll find to a truly free market is the black market, and even that is restricted by not being able to advertise, and not being able to use regular banking activities.

The excesses of too much of a “free” market are shown by the Standard Oil monopoly of the previous century.

What we really need is a truly competitive market, with enough regulation to ensure that it remains competitive. The idea that regulation is wrong in principle, is ignoring reality very firmly. Sadly, the sort of people who believe regulation is wrong in principle have a lot of practice in ignoring reality very firmly. You’ll find a lot of them at Trumpster rallies.

antrik

Is Trump actually a champion of deregulation? I don’t remember seeing anything that suggests so — but then again, I’m not actively following US politics…

I’m not sure why you bring him up at all. It’s just devaluing an otherwise good comment by making it unnecessarily divisive…

Will

Yes he’s deregulating the EPA

TJKR

Governments are just a reflection of the sentiments of the population. If all the people in the country care about the environment and wanting to make a difference you get Norway. If all the people in the country care about how crappy big government is, big pick-up trucks, guns and banning abortion you get the US.

Sustainable2020

Wrong…our governments are often representations of the most monied and powerful and not the population as a whole.

TJKR

Monied and powerful manipulate the foolish to get morons elected to office. The foolish think climate change and green energy is boring and guns and pick-up trucks are cool. Monied and powerful take a stick with a string, put a gun or pick-up truck at the end and wave it and there you go, you got our government.

windbourne

you say that while in America, trump is giving/increasing massive subsidies for your favorite companies.
Hmmm.

Prsnep

Free market and sustainability are two separate things. Often opposite sides of the same coin.

Will

We know that governments are inefficient but they serve the broader spectrum which corporations don’t do and always leave the little man out. F off GOP scrum

Terawatt

Maybe. I can’t even be bothered to check, because it’s completely inconsequential. The point is that a nation can choose to invest one billion as its part of a new factory investment, and that would be very significant for Tesla’s expansion while also easily achievable for a nation.

The whole idea is obviously bonkers, but that is another matter. Governments going in to support one chosen manufacturer probably sounds great in the authors head, but it would of course be illegal in most of the world, and definitely anywhere in the EU.

Public procurement is a huge part of the economy in most countries. And therefore regulated by law to prevent corruption and ensure fair competition among providers.

https://en.wikipedia.org/wiki/Government_procurement

Another Euro point of view

Terawatt, I believe you have to face the hard fact that you are likely way too educated to hang around here.

Get Real

That explains why Another Euro BS hangs out here!

Another Euro point of view

I have to hang in there to complete my “one year among the nitwits” internship but the good news is that my supervisor told me that since you are there it is a lot more intensive so it could be shortened 😛

Get Real

I see that you have been breathing the fumes from your “clean diesel” Audi A6 LICE mobile again.

Yes, the Tesla Carma is running over your Euro LICE Dogma.

You might want to face that fact.

Another Euro point of view

Will see, maybe you are right, only the future will tell.

Pushmi-Pullyu

Hmmm, who is the nitwit here?

How about the guy who posted this?

“How will hubby explain to wifey that their hard won cash just blew up in smoke buying Tsla stock… That may lead to divorce, that to children with substance abuse issues etc.”

https://insideevs.com/vw-ceo-blasts-tesla-low-sales-losing-millions/#comment-1348778

Sadly, you’re going to have to live with that nitwit your entire life, Another Euro FÜDster.

Another Euro point of view

Part of it already “blew up in smoke” lately. Other shoe my fall as well.

William

The GM bailout had a small taxpayer cost, which indirectly helped the Big 5 0il Corps. The amount has been reported at $11.2 Billion. That tidy sum potentially buys a lot of Gigafactories, if GM didn’t need a Fed bankruptcy rescue.

https://www.google.com/amp/amp.timeinc.net/time/82953/general-motors-bailout-cost-taxpayers-11-2-billion

Sustainable2020

William, That was a loan and every penny was paid back to the feds with interest from my recollection.

William

You are right, IIRC, but that “small taxpayer cost”, could have invested more resourcefully in a decent North American Gigafactory build out instead. Now GM is buying batteries for its Chevy Bolt from S. Korea and LG Chem.

As some YouTube Tesla Model X drivers say in Norway, “Sheeeeit”!

windbourne

So, California giving land to Tesla, along with tax subsidies , was illegal?
Likewise, all of the massive subsidies that the feds give oil/coal/nukes/AE are illegal?

antrik

Unfortunately, all the laws can’t ensure fair competition (making a successful bid is so complex that only companies specialising in government procurement even have a chance), nor prevent corruption. (Tenders are often rigged by including very specific requirements that favour particular bidders.)

tftf

PTD : Project to Date. I wrote to google/search for that on the GOED website.

Here’s the latest report on the GOED website:

http://www.diversifynevada.com/wp-content/uploads/2018/10/UPDATED_Tesla_Gigafactory_Compliance_Report_FY17Q4.pdf

Add up the PTD numbers for PENA and Tesla – that’s until the end of 2017 (latest report available as of today, see link above).

Cost will easily be up to $5-6 billion until Gigafactory 1 is completed in 202X.

Get Real

Please go away as we don’t want to read your BS that you cut and paste from your Reeking Alpha, Tesla shorting postings.

A rapidly growing and very successfully Tesla is here to stay and you and your fellow leeches can’t stop it

MoMac

It is a link to the “Nevada Governor’s Office of Economic Development” report on the Tesla Gigafactory in Nevada showing the tax incentive financial information and Tesla total capital investment in the Gigafactory.

Tesla’s total capital investment in the Gigafactory thru December 2017 was $3,732,662,233.
Obviously that number has increased over the past 9+ months.

But his point is the investment amount of the Gigafactory stated in the open letter is way off.

tftf

That was exactly my point MoMac, but many other commenters here apparently don’t care for facts or numbers.

Since the numbers reported to GOED by the auditors trail a few months (as you noted as well), Tesla and Panasonic (aka PENA in some filings) are well on their way to invest $5+ billion by 2019.

Many Tesla fans apparently don’t want to hear the facts since Tesla’s balance sheet and debt burden doesn’t support a lot of (future) cap-ex…

especially if Tesla doesn’t want to or can’t raise funds as easily as it used to in the past.

Henry

I think the local Chinese government in Shanghai already took the lead in this regard allowing Tesla full ownership of GF3 and helped with financing it. I don’t know if they have deeper ulterior motives, but it’s obvious that this plan is a big plus for Tesla to push for more EV growth in China. Credit the Chinese government for making this happen. I hope EU countries and maybe Canada can follow suit. Not so much for the US considering the political climate and strong influence of fossil fuel industries and their backing financial institutions.

Kosh

“I don’t know if they have deeper ulterior motives”:

“take full ownership” in a country that still has the ability to easily nationalize assets…… 🙂

antrik

“Nationalise” assets of a foreign company? Have they ever done that? I have a hard time believe *anyone* would be willing to invest in China, if they actually did that…

Pushmi-Pullyu

Just about every industrialized country is more willing to give government support to major industries than the U.S. is. China is even more eager to help than are European countries.

But then, China expects you to give them all of your intellectual property. And if you don’t give it voluntarily, they’ll just take it using their teams of government hackers.

I’m not sure that’s such a good tradeoff, especially for a company like Tesla, whose IP is significantly far ahead of its rivals.

antrik

Hah, as if the Chinese needed a local factory to “learn” from foreign companies… https://www.bloomberg.com/news/features/2018-10-04/the-big-hack-how-china-used-a-tiny-chip-to-infiltrate-america-s-top-companies

Will

Then it will steal Tesla ip

ffbj
I don’t know, Canada? You are in the crosshairs of the Trump administration. It’s cold up there, requiring extra money to heat the large factories. It’s unionized. Cobalt is not such a big deal for Tesla, as they are reducing, and perhaps even eliminating the need for Cobalt in their batteries. Canada has some good points, but I don’t think they outweigh the bad ones. I think Tesla, at the moment, is just trying to get Model 3 out the door and make some money in the process, spending more money is not necessarily the right choice at this point, and becoming a franchisee. Already countries around the world are clamoring for a Tesla factory to be built in their countries. France, Germany, most of Europe, are begging to have Tesla build factories there, and they have the one in China to be built. I think Musk’s original idea, was we will make great evs, legacy auto will have to compete by making their own, or die. Well that just did not happen. Although some are dying, and Nissan made an effort in the low end ev. I don’t think Musk realized at that time how recalcitrant and entrenched the… Read more »
Vexar

Agreed on the Cobalt subject, you’ve done your homework.

I do feel like Kia/Hyundai and Jaguar are up to the challenge. Nissan is taking a measured approach and producing slow results, but agreed on the entrenched manufacturer politics.

Canada should focus on building a market competitive labor force, either in manufacturing or in science/engineering. Tesla has no incentive to build cars in Canada except for the Canada market.

Robert Weekley

An Electric Car that works for Canada, with weather equal to most of the USA, can work pretty well Anywhere in the USA, so making them hear, gives access to numerous climate aspects, from Rainy (Vancouver), to Torrential Rain (Prince Rupert), to Desert (Lytton), to Mountains (B.C.-Alberta), to Prairies (Alerta-Saskatchewan-Manitoba), etc! So actually using Canada as a Test and Development Base, For Manufacturing, could have its advantages!

Canadians are a bit less populous, so more places to test new designs, with fewer spies, lots of open roads to run distance, endurance, range tests on, and actually making Production Line Tests, here, befire taking them home to the states, and abroad, could be a good thing!

Sustainable2020

Don’t be fooled by the few excellent bevs coming from non-Tesla automakers but poor production bev numbers from those non-Tesla automakers..
No automaker but Tesla will build or sell bevs in the states at any yearly production numbers close to what Tesla will build n sell of just of the model 3 for the for the next two months.
Unfortunately all other brands besides Tesla for the next several years are building bevs cause they have to n not cause they want to.
Therefore they will only sell as many bevs as they need to do so in order to comply with regs so they can sell their Dino mobiles in ca n other states.

Bunny

I think government is better suited to invest and guide infrastructure, healthcare, food supply, environmental concerns and leave the auto industry to non governmental investors.

Matthew Kennel

I’d be more interested in governments directly working on EV charging infrastructure.

What the letter writer wants can be accomplished by sovereign wealth funds investing in bonds and new issue equity of Tesla, which in turn, will spend the money constructing the plant in their constituency. If there are strings attached to the money (must build plant here) then presumably the company would get better terms than unrestricted investment (e.g. lower interest rates or higher issue price of equity).

Nelson

I propose a different tactic to accelerate the world’s transition to sustainable transport. I agree 100%, “if we manage to replace 100% of car sales with electric vehicles, replacing all cars on the road would lag for 25 years while old cars live out their life cycle.” The problem is allowing “old cars to live out their life cycle”. Tesla should institute a crush your ICE Trade-In promotion. They should open a facility to recycle ICE vehicles that get traded in. Maybe send the previous owner a square inch crushed piece of the old ICE as a souvenir. Use the reclaimed metal in new Tesla products.

NPNS! SBF!
Volt#671 + BoltEV + Model 3

Kdawg

Or a cash for clunkers program where people have to go to an EV.

Yves Laurin

You gave your car back and you will be entered automatically in a lottery, grand prize: a trip to Mars and multiple smaller price like a small rock from Mars

Terawatt

Let’s not worry too much about that as long as EVs are two percent of new car sales. Even in Norway, most new cars sold are not BEVs.

That said, a targeted program to get rid of the worst polluters may be a good idea. Berlin today became the fourth city in Germany to ban pre-Euro5 diesel cars from parts of the city…

Sustainable2020

Bad n good comments there terawatt. Norway is almost to a majority of auto sales being bevs n might be the majority next year.

Great to see more cities in Germany restrict or eliminate diesel use in their environs to counter the laziness n corruption of the German national government with regards to bev promotion and renewable energy.

antrik

AFAIK they aren’t doing it on their own accord: they have to do something to fulfil EU clean air regulations…

G2

How about adding in the carbon price (@ $300/ton) that the for sale LICE car will contribute over the average 8 years of the car’s dirty life as part of the purchase price? That would impact the ‘Demand Side’ of fossil fuel and lead to greater EV investment by legacy car manufacturers.

Andy

Can that be taken off the additional tax petrol/gas has on it, or in addition to the environmental taxes already pot on most petrol/gas, which is far more than $300 a tonne.

David Cary

In Europe perhaps. But of course loading $10k on to the purchase price of a car would still help make EV’s look like a good deal. People don’t do great with estimating future cost. That being said, SUV sales do go down when gas prices go up.

Andy

No need to load it onto the purchase price, it’s already included in petrol/gas prices.

You’re right though, the US generally doesn’t pay enough tax to do that.

Prsnep

And that still is a small part of the equation. Need to close dyno power plants. Need alternate fuel for shipping, air transport. Need to transition away from using natural gas to heat homes. Need to find alternatives to plastics. Need more people on trains. Need to stop selling single use items.

antrik

That’s why a carbon tax is such a good idea: it provides strong incentives to address all of these issues, and in the most efficient manner.

Bjørn Vabo

I’ve love the idea to be able to buy a localy produced veichle, preferable a Tesla. Production in Norway could be quite environment friendly due to 98% hydro. Its So much better than our filthy Oil production, and its a good way of making the inevidible “green shift”
But Elon is fighting the worlds most powerful and wealthy companies as well as global warming and shorts.. So there is a long an tough fight and a lot of fud ahead before we all can get the car we honestly want, localy produced or not
“From a fellow air breather”

Scott Franco

Norway is clean and then ships pollution off to the rest of the world. They rock. We in the USA used to ship our toxic electronic waste to China, but they have been refusing it of late. Bummer.

Roy_H

I wish I could write a letter to Tesla and address my concerns, but there seems to be no way to get them to read it.

Henry

Use Twitter. If your letter makes sense, it will make its way to the Musk. If not, it will languish like millions other tweets.

Scott Franco

Indeed, twitter is the ultimate democratic marketplace of ideas.

No idea how to explain Trump in that context.

Roy_H

I have tried twitter, with no response. I am sure it just gets lost in the deluge. I don’t imagine Elon has time to read every tweet.

Assaf

Interesting idea, but such an agreement must include a commitment from Tesla to produce large volumes of the base 220-mile model right from the start in return for the massive subsidy. Otherwise we are subsidizing the replacement of the premium fleet, which is only a small segment of the overall fleet, and also exacerbating inequities.

Robert Weekley

People want Cheaper Cars! We get it! But changing a 50 Mpg Prius to a Model 3, is not as Effective in cleaning up Auto Caused Air Pollution, as Replacing the Wealthy”s 20 Mpg MB, BMW, Audi, Cadillac, Lincoln, or whatever, with a Model S or Model X!

Sure, as afforability improves, the Average Working Ckass Person can better afford a Model 3 than an S or an X, plus: the Model 3 is even more Efficient than them! And 2 Model 3’s improve air quality localy, better than 1 Model S or X!

Unfortunately, Tesla is still figuring out their cookie cutter factory, approach, and likely will more yet, on the way to 10,000 Model 3’s per week!

Matthew Kennel

From that point of view, a $80,000 Tesla pickup (yes there are wealthy pickup buyers) that replaces a 16 mpg F-666 RAMPENIS might be even more beneficial.

antrik

Indeed. I’m not very optimistic about this audience being willing to do the switch any time soon, though…

Yves Laurin

There is no rush to produce the base model, demand is still higher than production, they make more profit on the higher en model and Tesla has to show profit

Taylor Marks
Terrible proposal. Getting governments involved would be a massive mistake. Every anti-EV organization on the planet – from shorts to the oil industry to the ICE manufacturers – would point at it and say it was proof that EVs can’t make fiscal sense. Elon’s other highly successful company, SpaceX, has publicly talked about how involving the government and accepting financial support from them was a massive mistake in the past and that they don’t intend to do it in the future. Government funding always comes with political strings attached. An example of an obvious issue – any government will be incentivized to turn this into a jobs program. Reducing man-hours per output isn’t desirable for the government. Just look at the Space Launch System – it’s a lousy rocket being funded by the US government, and part of the requirements is it has to involve people in every US state. So instead of the rocket costing $50-100M to launch the way a comparable SpaceX rocket does, it costs $2B to launch, because they have 20x people involved in the project. It’s like road work in the US. It never freaking ends – you just see dozens of people standing around… Read more »
Terawatt

Getting governments “involved” WOULD be a bad idea?

What planet do you live on?

The industry resisted seat belts, crash tests, airbags, unleaded fuel, catalytic converters – to mention a few of the things we would never have got if we had not forced it on the lovely free market that is guaranteed to deliver paradise for all.

antrik

Totally agree that regulations are necessary — but that doesn’t mean governments should be getting involved on actual production…

Scramjett

Hmmm, you must think that the Saturn V rocket was a lousy rocket and the Apollo program was a lousy program since, you know, they were also funded by government. Seems to me that the problem with government is not government, but the political knuckle draggers who are running the government. And for nearly 40 years, the US government has been run by nothing BUT political knuckle draggers who are more interested in using their positions to make themselves rich rather than public service.

David Cary

Since we have gone there… 40 years is essentially most of modern times. The federal budget receipts were 10% of today’s in 1978. And of course going to 1978 ignores – Nixon, part of Carter, and Johnson. While we can think Carter is a decent person, we see how that went. Government by its very structure and role encourages “knuckle draggers” to enrich themselves. Since we can’t really change that short of a revolution, adding to its role or size just worsens the problem. Dreaming that you give ambitious people power and they won’t use it to enrich themselves doesn’t really help.
I don’t have the answers but part of the problem is that the question is so hard.

Sustainable2020

Your hyperbole and false accusation without any evidence are ridiculous…especially the government n efficacy bs

Pushmi-Pullyu

“Getting governments involved would be a massive mistake… any government will be incentivized to turn this into a jobs program.”

I suppose it would be terribly unfair to interrupt your rant with actual facts, to point out that Tesla’s deal with the State of Nevada has been good for both. Yes, the deal does require that Tesla hire a certain number of workers, and that a lot of those workers (50%?) be residents of the State.

In the real world, win-win business arrangements (such as partnerships) and financial arrangements are not only possible, they are fairly common. This crazy and self-defeating idea that every arrangement has to be made on the basis of a zero-sum competition, is one of the ways in which the USA has lately gotten headed in the wrong direction. It has given us gridlock in Congress and a President who thinks we should tear up every trade arrangement and every treaty the USA has ever signed.

Will

No gridlock in Congress. It’s one party rule of GOP throughout the land besides Coasts

(⌐■_■) Trollnonymous

Get rid of OPEC welfare!
Eliminate the fossil fuel subsidies the goooooberment sends to OPEC.

Scott Franco

Hard to cut imaginary subsidies.

Pushmi-Pullyu

The trillions of dollars in U.S. taxpayer money used to pay for using the U.S. military essentially as mercenaries to support Big Oil’s political interests in the Mideast — including waging wars in the region by choice rather than necessity — and to use the military to protect Big Oil companies’ overseas supply lines…

All those trillions of dollars are very real indeed.

Scramjett

You’re joking, right? Your snark tag is missing.

Prad Bitt

Canada is a very bad example with mini trudeau licking the arses of Big Oil.

TJKR

What is the point of this so you can pursuade Tesla to build a Model 3 factory in Canada? Good luck to you partner! Tesla is already building a factory in China. This is a fool’s errand.

spinbackwards
Howdy Sanjeev, Thanks for putting this out there. It takes a lot of courage and conviction to put your name behind something, I tip my hat. We have a P3D. It’s by far and away the best car we’ve owned and we’ve had some good one’s. It’s safer, lower cost to own — by a lot. It’s best for the planet. The big problem is Trumpism. The Republican party has been taken over. First by the Christian Nationalists, now by Trumpism. Any vote for a Republican is a vote against EV’s. The future is here. But to get here, it’s all about voting. Kicking politicians out that are defending the oil and gas Ancien Regime, replacing them with those who see the future. Don’t be fooled. Any vote for a Republican is a vote for the past. If we want to see change it starts with voting for Democrats. The Republicans have played a long game and they’re winning, even though their policies aren’t supported by the majority of Americans. We the people have to play it as well. It starts in November. From there we have to stomp on it to 2020. But we can’t take our foot off… Read more »
Will

And the party leaders are old af. No new blood who can’t relate to someone like me in my earlys 30s

William

Well maybe James Murdoch can read this letter, and chime in, as he may become the next Tesla new guy, on all high ( High-Chair )!

Source: FT rumor mill.

Scott Franco
“The Paris Accord saw 175 countries commit to reduce global emissions and prevent the earth from warming more than 2°C. This came with a financial commitment to spend $100 billion per year towards helping achieve this goal. Unlike Wall Street, which is primarily concerned with profit” And yet the evil capitalist country USA pulled out of the Paris Accord and has, and continues to, be one of the biggest reducers of emissions as well as one of the few countries meeting or exceeding the Paris accord (even though we are not in it), largely due to the evil fracking business, which has not only dramatically increased natural gas production in the USA, but is becoming one of the leading exporters of LNG and helping to reduce pollution around the world. “Governments have the ability to cut the cost and time required to build a factory by expediting the permitting process and contributing land, power and tax incentives” Agree with the first part, but government subsidies are NOT REQUIRED. What Tesla got with the Gigafactory was escape from the corrupt, overregulating dead hand of government in California. Tesla does not need contributed land or money. It just needs escape from stupid… Read more »
David Cary

So much to reply to but a really big one is that NG does not replace oil. Oil is used predominately for transportation. NG is not. It can be but it hasn’t in large numbers in most of the world. Certainly the fracking in the US hasn’t displaced significant oil. A bit in EV’s but not big numbers yet.
Fracking has replaced a lot of coal though. And that is a good thing. But do you really believe that fracking is a sweet innocent way of gathering prehistoric energy?
I generally did not think of the USA as an evil capitalist country until 20 months ago. But now – yeah – it is a fit description.

The right answer is to “internalize the externalities”. That puts gas at $10 a gallon and then government is not helpful (or necessary) for picking winners anymore. Right now we have a government that does aggressively subsidize fossil fuels for their own political gain which is their own enrichment. Remove all their power would be a start but that isn’t happening. The solutions can go either way but nothing about the current people in power leads to those solutions.

Scott Franco

And yet we (USA) seem to be meeting or exceeding the Paris accord even though we left it, and most others IN the Paris accord aren’t meeting it. Apparently some countries have action, some just talk.

P Roppo

Just another Canadian fantasy. Nothing new here.

TJKR

Just like how Canadians call ham bacon. Rest of the world it’s ham. Canadian fantasy.

Scott Franco

The letter has one good point. It WILL in fact take more than our lifetimes to replace the current ICE fleet with EVs.

Here is a suggestion for everyone here. The next time someone goes on (and on) about global warming, ask them if they drive an electric car. When the answer is (of course) “no”, tell them politely that they have opted out of the solution and really have no voice in the matter.

Andy

A more pertinent question would be to ask them if they have, or plan to have kids.

If they say “yes” then tell them politely that they have opted out entirely.

EV’s are just one climate change reducing factor of many – are you signed up to renewable energy/personally have solar (or other renewable electricity source), do you travel far from home, do you have a hyper insulated house, do you grow your own food, are you a vegetarian etc.

But, after all that just one child can destroy all you’ve done to try and “save the planet”.

Realistically it’s a combination of all the above things – some one that never flies, walks to work, grows their own vegetables, has no kids but has a 15 year old ICE car they drive 3,000 miles a year is likely to have a significantly lower global impact than someone that just spend $35-100k on a new Tesla and has a couple of kids…

P Roppo

Then there is that nonsense. Back in the late 60’s and early 70’s, there was a crusade to slow birthrates. Only white American women complied. Now the very same people are telling us we don’t have enough babies to sustain ourselves and so, need to welcome the rest of the world as immigrants – who have no intention of limiting their birthrates.

Andy

Unfortunately that’s the rub between the economy and our way of measuring it (economic growth “good”), and the environment.

For the economy the more people the better – more people working means more economic growth for a country, but for the environment less people is better because there is less strain on resources.

Environmentally we need less people on earth, economically increasing population size is one of the easiest ways of increasing GDP.

antrik

Importing people who grow up in less lavish lifestyles, instead of producing more people in rich countries, is actually a big win from an ecological point of view… Though obviously there are some sociological challenges with that stance 🙂

Will

Being a vegan have nothing to do with climate change

Andy

Wrong (unfortunately, as a meat eater).

https://ourworld.unu.edu/en/eating-less-meat-essential-to-curb-climate-change-says-report

“The global livestock industry produces more greenhouse gas emissions than all cars, planes, trains and ships combined”

Farming of animals (especially cows for beef/milk) is a major contributor of climate changing gases and a diet with less/no meat is better for the climate.

antrik

More than transportation? Last time I heard, it was on a similar order, but not quite as big… I guess it might depend on how they are counting methane emissions. It’s really hard to compare, since methane is a strong greenhouse gas, but doesn’t remain in the atmosphere indefinitely…

Mark.ca

maybe they bike or bus to work or get around. But, yeah, i’m with you on that one…we tend to have too many preachers.

windbourne

Exactly what I have been saying, but Canada is NOT the right place to build a factory. America already has that covered.
Who should be all over it, is Australia, any nation in Europe Union i.e. with the market), and India.
Australia is by far the best.,
They have ALL of the elements needed, AND have a number of ex-factories. They could easily get Tesla to build there and export throughout Asia. In fact, I believe that Australia has some special deal with China. They can export cars there, without paying what we pay in the rest of the west.

And ideally, tesla would build batteries/cells there for installing CHEAPER in Australia.

Sustainable2020

Not a bad idea. Giga in Quebec for all Canada n the northeast n east coast. Another near Mexico City for mex n Latin America.
However, I and many in the states would prefer or want first more gigas here….south east(maybe Georgia), north east(next to solar plant in Buffalo??), north west(in WA if they finally agree to join carb states), and maybe central USA(Detroit, Houston or OK city to further the bev revolution in the ICE, oil heartland).

Jon

Tesla should sell the model 3 as a kit car. If assembly is the bottleneck let people buy them for less and build them at home, or let mechanics and small garages build them. And Tesla should also consider selling conversion kits which require no assembly facilities or labour cost, but would bring in revenue.

John

I’m sure the shorters and their ilk wouldn’t have a field day with that proposal at all..

Andy
Why Tesla? Why not any other manufacturer – Nissan would be a good option, the Leaf is a smaller vehicle with a smaller battery and lower impact on the environment. Tesla build large vehicles that are not needed by the majority of the population, in form factors that aren’t popular outside the US and Canada – small hatchbacks are by far a more common form factor than large sedans. Alternatively there should be more funding for all that want to develop and build EV’s – the billions put into one factory that profits one company could be put into subsidies to persuade people to buy EV’s, into R&D by universities and a spectrum of companies or a myriad other things. This is what countries are actually doing, while also subsidizing the building of factories that help their economic model. We should be not aiming to support Tesla solely, but the EV industry as a whole. And just to clarify a point – renewables are good, but large commercial hydro is debatable. It destroys huge tracts of lands and entire ecosystems, causes fish stocks to plummet (especially migrating species like Salmon that can’t migrate to their traditional breeding grounds) and quite… Read more »
antrik

The proposal for Tesla to initiate such a program doesn’t mean other makers couldn’t do the same…

Still, I agree that governments should rather focus on more generic incentive programs. However, putting more incentives on the supply side (i.e. EV production) rather than the demand side might not be a bad idea. China did that with PV, and it worked wonders.

G2

Great thinking Sanjeev!!

Bernard Bromell
I am confused by the juxtaposition of the opening insideevs remarks and the open letter itself. The opening insideevs remarks says “Given recent interviews where Elon has rightfully pointed out that even if we manage to replace 100% of car sales with electric vehicles, replacing all cars on the road would lag for 25 years while old cars live out their life cycle. ” and “The Paris Accord saw 175 countries commit to reduce global emissions and prevent the earth from warming more than 2°C.” The just released IPCC report says that emissions have to be about halved in just over 10 years to keep warming to 1.5C. From this it is clear that even if all cars sold were electric right now, it would not be enough to meet the Paris agreement commitments. The open letter then suggests how to build more factories to produce Tesla vehicles. However, from the opening remarks it is clear that this cannot be the solution to keep warming to 2C. So it seems that a non-solution is being proposed to the problem posed. Electric passenger services can reduce emissions in the time frame required. Below is an open letter I posted on OHPEC’s… Read more »
antrik

The reason is simple: using full-speed supercharging every day wrecks the batteries…

Bernard Bromell

That is not the reason.

Pushmi-Pullyu

“Governments that make this investment can ask for a sensible profit sharing model. For example, they could keep all profit until made whole or 50% until paid double — and keep a fair royalty in perpetuity.”

Anyone agreeing to that sort of very one-sided arrangement has no business trying to run a hotdog stand, let alone a major corporation! That sort of very lopsided arrangement would very quickly result in bankruptcy for the company.

This proposal is, sadly, yet another example of “Green” idealists who would rather perceive the world as they wish it to be… and not how it is in reality.

Now, if you want an example of a good government subsidy for a large company, look closely at the arrangement Tesla made with the State of Nevada. Tesla got a lot of tax deferments, and a very cheap price on the land, and some other perks.

(continued…)

Pushmi-Pullyu

(…continued)

But the State of Nevada has some very strong protections in place. Tesla has to meet specific milestones to get those tax deferments in stages over time; Nevada didn’t give Tesla all the perks up front, as some other State governments foolishly have with their offers to attract major corporations to their States. Nor did Nevada give Tesla any cash as part of the deal, altho it did give Tesla some transferable tax credits, which Tesla can sell for cash. But as I recall, those also are given over time, not all up front.

Definitely a win-win for Tesla and for the State of Nevada!

CarGuy

The suggestions in this letyer are terrible.

Creator Generator

Way to GO! As a Canuk myself, I’ve said this more than a few times about setting up here.

mmm

Canada is a small market for Tesla.

HH

I suggest some else. If a government wants to have maximal influence for minimal investment on CO2 emissions and other noxious gases for its population it should …. drum roll … build electric buses.

Bob Wilson

Let me suggest that Tesla might use this to spin-off, private clones. Starting each as a private firm eliminates the stock market noise. When one or more achieve a competitive base, offer private stock to existing Tesla stock owners. Eventually, the clones buy out Tesla from their revenues and the problem is solved. Then there is the suicide option.

Install the most incompetent, anti-Tesla managers (aka. Bob Lutz) so Tesla goes bankrupt. Then the private Teslas can buy up any residual assets and the problem is solved.

Will

Yeah more like a love letter.