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Jenkins' pessimism is exactly what Jay Leno is talking about.
First, see
what Jay Leno and Jim Cramer really said.
Jenkins presents no facts nor logical arguments that support his claims.
Below I refute Jenkins' many allegations in his June 17, 2016, Wall Street Journal editorial.
Where Jenkins writes:
-
"heavily dependent on government handouts"
"government favoritism"
"government's excessive interest"
"restrict himself to building a company that can survive on the support it receives from its customers"
The blue graph (revenue) far exceeds the net of the grey (government), and that trend is clearly continuing, rendering moot Jenkins' primary claim and headline.
- "short of adulation"
Jenkins quickly tries to pass off a logical fallacy as truth, much like Michael Moore does in his highly manipulative and biased "documentaries". Here Jenkins' fallacy is to equate "attack" with not enough "adulation".
It's a shameful example of Orwellian double-speak by Jenkins. Jay wasn't talking about praise of Tesla; Jay Leno speaks about those who spread negativity on Tesla, how that negativity is both "unnecessary" and undeserved.
Jenkins' pessimism is exactly what Jay Leno is talking about. Jenkins presents no facts to support his claims.
- "future expected subsidies? The handouts currently amount to at least $20,000 per car."
Another clear example of sloppy uncritical irrationality. He divides the wildest guess of future
total government incentives by the number of past vehicles sold.
That fraction (The Future/The Past) has no meaning.
Where is the journalistic integrity in the WSJournal? WSJ should be ashamed of staining its pages with Jenkins' nonsense, and end use of Jenkins' words now and forever.
As a now-proven user of Numerology, Jenkins does not hold himself to any standard of rationality. Using Jenkins' "logic", he could divide any two numbers to find meaning, such as: we should value Jenkins' first year (the past) working at the WSJ using the salary Jenkins' gets for the rest of his career (the future). Therefore Jenkin's first year of work is worth $1.5 million!
WSJ should be ashamed.
A far more realistic back-of-the-envelope per-car estimate reveals the discount is limited to 0.06%:
The
ATVM DOE money
departed Tesla years ago, so the upcoming amount regards the Gigafactory.
The 20-year Nevada discount is better spread over car production in the same 20 years.
Because Tesla's new target is 1 million cars per year in 2020, we could expect more growth in the next decade, so we could guess an average of 2 million cars per
year (could be more) over the next 20 years; that's 20 * 2 million cars = 40 million cars. $1 billion / 40 million cars = $25 per car, orders of magnitude less than Jenkins' claim.
Let's guess they're solely Model 3's (which it won't be), so an average selling price of $42,000
(Tesla's overall ASP will be higher due to Model S & X & next-gen Roadster).
So the discount is no more than $25/$42,000 = 0.06%. Q.E.D.
That's a helpful but tiny fraction.
It begs the question:
Why do they raise a fuss over a 0.06% discount per car?
- "electric-power generation"
Another clear example of sloppy uncritical irrationality. The number and scope of consumers of electric power are orders of magnitude greater than any reasonable consumption by EVs. The fossil-fuel industry itself is of course a consumer of electric power (refineries, pumps, etc.), so it's obviously nonsense to somehow attach all other electricity consumption to EVs.
The Union of Concerned Scientists
has clearly disproven Jenkins' allegation that EVs are worse for the environment.
Emissions due to grid-powered EVs over their lifecycle is already cleaner than that of gas cars.
Grid-powered EVs are cleaner and getting even cleaner than the ICE equivalent.
They even provide a
calculator, depending on the zip code where they plug in, how much emission is related to EVs.
Therefore environmental benefit occurs whenever an all-electric car displaces a gas car. If you honestly care about air pollution, advocate for phasing out fossil fuel plants in favor of renewable power such as solar and wind.
- "$465 million in federal loan guarantees"
Jenkins' crystal-clear example of what Jay Leno is talking about.
Jenkins' conveniently omits that Tesla
paid the $465 million back PLUS prepayment penalties.
Tesla
sent back the money, then
paid MORE to the government. Jenkins' ire is disproportionally directed at Tesla. For Jenkins' punishment to fit the crime, show us Jenkins' numerous articles demonstrating his outrage at far bigger beneficiaries of impropriety:
Show us evidence of Jenkins' greater outrage at GM, VW,
Boeing and a couple dozen other companies who each get far more than Tesla.
Only then does one has standing to object to Tesla's measly share of a "nakedly political" game.
Don't Hate the Player, Hate the Game
My main point is the focus on Tesla by those who hate subsidies is disproportionate and misdirected and counterproductive.
Those that have a problem with subsidies should focus instead solely on the politicians
who use government money to reshape or selectively stimulate our economy.
Remember
it is possible to change the law.
The vastly more practical approach is:
Have them end all subsidies and kickbacks and incentives for all companies.
Until then any attack on Tesla is futile (if Tesla doesn't get that money far more continues to other companies)
and is simply a result of a known psychological condition called
misdirected anger.
- "$1.3 billion in state incentives for his Nevada battery plant"
Jenkins is willfully selective.
Tesla receives only a 1% discount on its Gigafactory.
Jenkins conveniently omits the fact that number is spread over 20 years only if the Gigafactory generates $100 billion in revenue.
Nevada's invests just 1% to get several times more in taxes on the resulting economic stimulus, therefore
Nevada always wins, just like the casino.
- "Goldman Sachs" "Solyndra" "Jim Chanos" "Trump" "Hillary"
If Jenkins has a beef with Goldman Sachs, write an article about Goldman Sachs.
If Jenkins has a beef with Solyndra, write an article about Solyndra.
If Jenkins has a beef with Jim Chanos, write an article about Jim Chanos.
If Jenkins has a beef with Trump, write an article about Trump.
If Jenkins has a beef with Hillary, write an article about Hillary.
Each time Jenkins' uses those names is a non-sequitur. And clickbait. Is there no limit to Jenkins' stoop?
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Tax Credits to the Consumer
Three points regarding tax credits to the consumer, a topic Jenkins
even doesn't consider important by mentioning them only in passing anyway:
- These tax credits for purchasing a BEV do not go to Tesla, only to the consumer.
- Any qualifying product from any manufacturer will trigger the tax credit, so they're not specific to Tesla,
and therefore don't qualify as "government favoritism" to Tesla.
Far more of other manufacturer's cars exercise this consumer incentive.
- Jenkins has not, nor any other I've seen, put a dollar figure on how much of Tesla's revenue
is due to this tax credit. You have to first find the proof to answer the question: How many Tesla sales would not
have occurred if this tax credit did not exist? 0.1%? 0.05%?
The enthusiasm Tesla critics attribute to Tesla car buyers
suggest that number is very small and much less than that of other manufacturers' cars.
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Food for Thought
See the Wikipedia definition of Disinformation and
Propaganda, the
Techtarget definition of Disinformation,
and Lying by omission.
Does Jenkins' tactics qualify as any of these?
Wikipedia's disinformation definition includes "A common disinformation tactic is to mix some truth and observation with false conclusions and lies,
or to reveal part of the truth while presenting it as the whole."
Let's see how that applies.
| "A common disinformation tactic is to mix" |
|---|
| Where Jenkins says |
"some truth and observation with" | "lies" | "false conclusions," |
"or to reveal part of the truth while presenting it as the whole." |
| "heavily dependent on government handouts"
"government favoritism"
"government's excessive interest"
"$465 million in federal loan guarantees" |
The ATVM program gave Tesla a $465 million loan. |
Leaving the following facts out is lying by omission:
Tesla paid the loan back with interest and prepayment penalties.
|
Implies Tesla still has the $465 million
and Tesla's survival depends on that $465 million. |
Jenkins presents the $465 million loan, without the 2013 complete repayment, as a complete picture of the truth.
|
| "$1.3 billion in state incentives for his Nevada battery plant" |
Nevada creates financial motivation for Tesla to build and run the Gigafactory in its state. |
Leaving the following facts out is lying by omission:
- The $1.3 billion is an estimate.
- Such estimated incentives are spread over 20 years
- and only occur if the
Gigafactory achieves $100 billion in revenue over the same 20 years.
|
Implies Tesla gets a $1.3 billion check all up front. |
Jenkins presents the $1.3 billion, without the 20-year spread of that incentive and corresponding revenue estimate,
as a complete picture of the truth.
The correct conclusion is
Tesla receives only a 1% discount on its Gigafactory.
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| "electric-power generation" |
EVs consume electricity from the grid.
Some electric-power generation creates greenhouse gases.
Emissions due to the entire electrical power economic sector is greater
than that of the entire transportation economic sector.
|
Leaving the following facts out is lying by omission:
The vast majority of consumers of electrical power are not EVs.
Generation of
electricity is getting cleaner every year,
and a consumer who buys an EV rather than a gas car results in a net reduction in greenhouse gas emissions.
|
Implies EVs' consumption of electrical power will make greenhouse gas emissions worse. |
Jenkins presents EVs' consumption, without consumption by all other uses of electricity
and without the ongoing overall reduction in emissions per kWh by electric power generation
and without the benefits of eliminating gas cars, as a complete picture of
the truth about electricity consumption and greenhouse gas emissions.
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| "future expected subsidies? The handouts currently amount to at least $20,000 per car." |
Nevada's incentives to build the Gigafactory over 20 years are estimated to be $1.3 billion.
Prior to 2016, Tesla has built about 100,000 cars, about 50,000 of which were delivered in the USA. |
Leaving the following facts out is lying by omission:
- $1.3 billion is almost entirely in the future, spread over 20 years.
- The 50,000 Teslas in the US are in the past.
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Implies dividing $1 billion in the future by 50,000 cars in the past has meaning.
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Jenkins presents $1 Billion/50,000 cars = $20,000 per car, without mentioning the timing of those figures,
as a complete picture of the truth.
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Given the above facts, the reader may choose to conclude Holman Jenkins, Jr., is spreading disinformation.
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Links to sections:
Top |
Government |
Adulation |
Subsidy |
Electricity |
ATVM |
Clickbait |
Tax Credit |
Disinformation
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Dean E. Dauger holds a Ph. D. in physics from UCLA, where his group
created the first Mac cluster in 1998. Dr. Dauger is the award-winning
author in multiple American Institute of Physics' Software Contests and
co-authored the original, award-winning Kai's Power Tools
image-processing package for Adobe Photoshop.
After founding his company,
Dauger Research, Inc., its debut product,
Pooch, derived from Dr. Dauger's experience using clusters for his
physics research, was soon awarded as "most innovative" by IEEE Cluster
and continues to revolutionize parallel computing and clusters worldwide
with its patented technology.
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