The flagship for transportation visionary Elon Musk, Tesla Inc. (TSLA.Nasdaq) said on Monday August 7 that it plans to issue high-yield bonds to raise about $1.5 billion in order to scale up production of its Model 3.
Although Tesla’s cars were initially conceived as electric-car marketing alternatives to the offerings of major auto companies, the company has repeatedly required infusions from the Majors in order to keep itself afloat. Daimler AG bought an equity stake for $50 million in May 2009, for example, and Toyota invested its own $50 million, a year later.
A recent story in Euro Intelligence asks (though it does not answer) the question whether “Tesla is the new iPhone of the car industry.” What is certain, EI says, is that the car of the future “will have an electric engine, and lots of smart artificial intelligence.” And that is the direction in which Tesla is pushing. European made cars, even the best of them, are starting to look like the Blackberry.
Tesla’s new bond issuance would ordinarily be covered on the “finance” side of news, not the “politics” side. Still, financing in the automotive world, amidst all the fraught questions about infrastructure, carbon emissions, the old-style manufacturing industries, etc., draws politically charged reactions. There is also the fact that Musk’s empire (extending far beyond Tesla, including for example SolarCity Corp. and SpaceX) has received billions in U.S. taxpayer subsidies.
Left Wing View
From the left, or at least the moderate left, Musk has received a lot of praise over the years.
It isn’t simply the fact that he personally adheres to moderate left politics, or that he criticized now-President Donald Trump during the campaign, saying that Trump is not “the sort of character that reflects well on the United States.”
It is more the fact that Musk embodies a certain left of center ideal of how a socially responsible capitalist should act. As one blogger, who describes himself as a “tree hugging” liberal, recently put it, Musk’s example shows that “capitalism can be a good thing, especially when someone with … long range vision uses it for the betterment of humanity.”
There is also the underlying idea of much of the center-left that they are on the side of science and technology: that on climate change, the teaching of biological evolution in public schools, mandatory childhood inoculations, and a wide range of other issues they are opposed not by contrary coherent positions but simply by ignorance and obscurantism. Ashlee Vance, a New York Times reporter, wrote a whole book praising Musk for representing technological/corporate progressivism, which Vance calls “the quest for a fantastic future.”
Getting back (with this background) to the newest electric car from Tesla, the Model 3 — Bloomberg’s Tom Randall has written about it with great enthusiasm, saying that he “took one out for a spin” and returned with “little doubt the age of electric cars has arrived.”
Right Wing View
Musk, Tesla, and those who buy Tesla’s products, are sometimes criticized in politically charged language (right wing) language, as where one tweet recently called Musk “a con man and a welfare queen,” here:
In the same spirit, Nick Short, also referencing the subsidies for Tusk’s empire, tweets that it is “time to shut off his gravy train.”
A writer at National Review uses Musk as an example of the kind of case the right has thus far failed to make. “Republicans must drive this fact home: that it is the Left that is making people billionaires with taxpayer dollars.” [He introduces this point as part of an exegesis of a passage in the first book of Samuel.]
The conservative blog RedState complains that, in addition to the federal subsidies, the state of California also “throws cash at Tesla.” RedState’s “water cooler” column objected to a bill that it said would merely put “more money into a kleptocrat’s pockets and [make] it easier for people with more dollars than sense to virtue signal.”
“Virtue signaling,” by the way, is a relatively new buzz phrase on the right. It suggests a condition in which the signaler is more interested in being seen as doing good than in actually doing good, and such actions as buying an electric car become conspicuous morally high-brow consumption.
The charge, then, is that the Powers that Be are trying to so re-arrange signaling so as to make a Tesla in the driveway a prerequisite to keeping up with the Jones’.