Tesla Inc. CEO Elon Musk speaks at the opening ceremony of the Tesla China-made Model Y program in Shanghai, China on January 7, 2020.
Aly Song | Reuters
Tesla and SpaceX CEO Elon Musk lamented the “justified” and “complacent”
Specifically, Musk criticized New York and California – states that have supported his companies, most notably Tesla, with significant tax breaks, legislative credits, and other government assistance.
Automotive News publisher Jason Stein, who conducted the interview, asked Musk, “What about China as an EV strategy leader in the world?”
Musk replied: “China is rocking in my opinion. The energy in China is great. People there – who are like a lot of smart, hard-working people. And they are real – they are not right, they are not complacent, referring to the fact that I in the United States increasingly see much more complacency and justice, especially in places like the Bay Area, and LA and New York. “
Last year, Chinese officials helped Tesla secure loans worth about $ 1.6 billion to design and begin manufacturing vehicles at the company’s relatively new Shanghai plant. This year, the Shanghai government helped Tesla get back to normal operation quickly at its new facility after the region was hit by a Covid-19 eruption and issued extensive quarantines that temporarily suspended production there.
Musk pointed out that Telsa has not received as much help from the government in China as domestic companies there. “They have been supportive. But it would be strange if they were more supportive of a non-Chinese company. They are not,” he said.
The enthusiasm the mercury musk expressed for China contrasts with his expressed contempt for communism. In a tweet Monday this week, Musk mocked social welfare programs in general and Karl Marx’s ‘Das Kapital.’
During the Automotive News podcast, Musk also compared the United States, California and New York to sports teams that were losing their winning status.
“When you’ve won too long, you kind of take for granted. The United States, and especially like California and New York, you’ve won too long. When you’ve won too long, you take things for granted. So like some pro sports teams, they win a championship that you know a lot of times in a row, they become complacent and they start to lose. “
Tesla and the States
Among U.S. automakers, “Tesla has had the least government support from any automaker,” Musk said.
He boasted of Tesla’s repayment of a loan to the U.S. Department of Energy ahead of schedule.
In June 2009, the Obama-era Department of Energy granted Tesla a $ 465 million loan to establish a vehicle assembly plant in Fremont, California, and to begin production of its flagship all-electric sedan, the Model S. Tesla repaid it with interest in May 2013, nine years ahead of schedule.
The DOE loan was small compared to the tens of billions of TARP loans that went into bailing out General Motors and Chrysler during the financial crisis that began in 2008.
However, Tesla has benefited from other forms of state aid in the United States According to analysis by the Los Angeles Times, Tesla’s government aid in the United States has exceeded $ 4.9 billion.
Tesla’s government support in California has included more than $ 220 million in exemptions for sales and use of taxes from California’s Alternative Energy and Advanced Transportation Financing Authority as well as zero-emission vehicles and solar renewable energy credits granted by the state. The sale of these regulatory credits was a significant factor in Tesla’s profitability over the past four quarters.
As CNBC and others have previously reported, the state of New York spent $ 959 million on a solar panel factory in Buffalo, now operated by Tesla, in an attempt to bring more than 1,000 high-paying technical and manufacturing jobs to the state.
Tesla has so far failed to meet its hiring obligations in New York. A financial filing this week revealed that Tesla has obtained a full-year extension from the state to meet the requirement for head count. If it does not, Musk’s electric car and renewable energy venture will have to pay $ 41 million back to the Empire State.
Tesla stock and sales
On the podcast, Musk also celebrated the fact that Tesla is now seen as a “legitimate” American and multinational automaker. While it used to be an upstart and underdog, Automotive News asked him what was going on with the rising price of Tesla shares, which is more than 240% this year, and whether Musk felt a need to control investor expectations.
The CEO drew:
“It’s not worth trying to massage the stock market or manage investor expectations. It’s just. You know? At the end of the day, if you make good cars and the company’s healthy and produce good products, investors will be happy … If you Make lousy products that your customers are unhappy with, and then your investors will be unhappy. “
Elon Musk, President and CEO of Tesla Motors, speaks in front of a Tesla Model S electric car on Day Two of the 2010 North American International Auto Show in Detroit, Michigan.
Daniel Acker | Bloomberg | Getty Images
He also gave this advice to other entrepreneurs:
“My advice, you know, to business America or companies around the world is spending less time on marketing presentations and more time on your product. Honestly, that should be the only thing learned in business schools. Put the spreadsheet and PowerPoint presentation down and go and make your product better. “
He also predicted that online car sales and delivery of cars directly to consumers, rather than car sales through stores or traditional dealers, would become even more of a standard after Covid-19.
Tesla saw “strong orders throughout the pandemic,” Musk said. Tesla deliveries fell about 5% in the second quarter of 2020. Due to Covid-19 impacts, most other automakers saw sales jump more than 30% in the same period. The CEO concluded, “Having a traditional dealership situation seems to me to be becoming more unnecessary, and I think the pandemic has just intensified that.”
Tesla shares closed down 3.8% on Friday, but have been on a spectacular run this year despite the global coronavirus pandemic and the beginning of a recession.