Tricky Tesla

Tesla boss Elon Musk

Why Tesla has to forego a government grant of more than one billion euros, even though it was previously applied for. Elon Musk gives the do-gooders.

From Harald Kaiser

The Lord is once again making a powerful impression - at least with those often uncritical admirers who are hanging on his lips anyway. They think he's honest. Tesla boss and electric car guru Elon Musk, who is as dazzling as it is unpredictable, recently tweeted that he was foregoing 1,1 billion euros in state dough to set up his own battery production in his new car factory in Grünheide / Brandenburg. The unformulated subtext should probably read: We don't need that.

Mister Tesla tweeted as an explanation: "Tesla has always been of the opinion that all subsidies should be abolished, but this must also include the massive subsidies for oil and gas." Later, probably to document his basic position on the subject, he recalled the "onerous terms" that would have been in place on a US Department of Energy loan in 2010/2011.

So: generous or sly? Probably more of the latter. Because the question remains, why did Tesla even apply for funding for its battery production in Grünheide beforehand? Since then, it has been speculated why the widely adored miracle manager Musk forego such a fat amount?

Both the Financial Times, the business news agency Bloomberg and the Handelsblatt have published articles on the possible reasons, some of which contradict one another.

  • The Financial Times *: Tesla was forced to reject the (German and EU) subsidy because of delays at the German Gigafactory, writes the British newspaper. According to the rules of the EU, subsidized systems must always represent the "first industrial application" of a new technology. Mass production elsewhere must not yet take place, according to the report. Apparently, Tesla no longer wants to accept this condition. Because of the delays in the approval of the Gigafactory project in Germany, Tesla will probably start its battery production at another location in the USA beforehand. This means that Tesla would only anticipate an expected return of the billion-dollar subsidy, because the conditions for their payment would not be met. The still pending final building and operating permit for the German Gigafactory may delay the start of production of the Model Y compact car there until further notice, but apparently not the planned battery production there, because the building for this will continue to be built.
  • The Bloomberg Agency ** Citing an informed person: Tesla has decided to start the mass production of its own battery cells differently than previously planned, first in its Gigafactory in Texas. This would mean that the German project would no longer be eligible for funding.
  • The Handelsblatt ***: Under the heading "That is why Tesla waives billions in government aid" it says that Musk is worried about trade secrets. Tesla may fear having to share research results with competitors if these are partly funded by the state. "Tesla may fear that they will have to make research results available to other competitors," says Joachim Ragnitz, subsidy expert at the Ifo Institute in Dresden, the Handelsblatt.

According to the car expert Ferdinand Dudenhöffer, subsidies are “far too complex” and time-consuming. Not only Tesla, but almost all German manufacturers would forego subsidies. He told the Handelsblatt: "Elon Musk shows us how amateurish our funding is." Dudenhöffer, who as a professor who spent more than ten years trying to get public funds at the University of Applied Sciences and Arts in Duisburg / Essen, knows what he is talking about. The application procedure is too complex, time-consuming and laborious. So: Nothing specific is known. It's all conjecture, nobody outside of Tesla really knows why the funding application for the Brandenburg Tesla and battery factory was withdrawn.

Elon Musk is not as generous as he is

But Musk is not as generous as he is about subsidies. Because he does receive subsidies for his German branch, even if the amount, measured against the total investment, is not worth mentioning. Because according to the website of the regional government of Brandenburg, the generally adored electric vehicle manufacturer applied for regional funding for the entire system in November 2020. A spokesman for the Brandenburg Ministry of Economic Affairs said this application had not been withdrawn. How much money is involved was not disclosed. The amount depends on the amount of the investment. But the amount that Brandenburg donates can be estimated reasonably well, because investments worth more than 100 million euros there generally receive 6,8 percent of their value in subsidies, according to the Brandenburg website. Since the construction of the Tesla plant and battery production in Grünheide, according to Musk, devours around five billion euros, the state is likely to be there with around 340 million euros from the state bag - in view of the total investment amount, it is only a drop in the ocean.

In order to keep trouble at bay on another point in the future, Musk has made another move. Because Musk, who is known for fighting argumentatively more with the coarse saber than with the fine foil, has a problem with rules and the authorities due to his quick-tempered nature. Specifically, it is about the US Securities and Exchange Commission (SEC), with which he is repeatedly in a clinch and whose sense he has at least temporarily questioned. In 2018, the SEC accused Musk and Tesla of securities fraud after his boss tweeted that he was considering delisting and re-privatizing the company for $ 420 a share. The funding has already been secured for this. Then all hell broke loose. After all, such a statement is highly relevant to the share price and it is about the shareholders' money.

Musk paid $ 20 million from his private box

Musk eventually abandoned the venture under pressure from the SEC, paid a $ 20 million fine from his private box (the Tesla company separately the same amount), and signed an agreement requiring him to have his tweets reviewed by a lawyer before posting leave. But he has not always kept to that. In order not to get a full broadside from the SEC, he has now hired stock exchange expert David Misler as Managing Counsel. Misler is a former SEC litigator who previously worked for the US Department of Justice. Let's see how long the man stays. Because at the Tesla company, which is autocratically run by Musk, the workforce whispers that the big boss sometimes changes his managers faster than his underwear.

SpaceX going broke?

It's not just in Musk's car company that the bush is on fire every now and then. For example because of the rather average quality or because of the apparently consistently critical cash situation. Now the indicator of profitability is also in another area of ​​his company network in the red area of ​​an imminent bankruptcy. It's about 'SpaceX', its space company. Musk recently emailed SpaceX employees that if more engines were not built for the Starship spacecraft, the company would run the risk of going bankrupt. This is reported by the US online news portal 'Space Explored'. SpaceX is building too few of the engines with which the Starship is powered, which is supposed to fly to the moon and Mars, among other places. It is also needed to launch the second generation of the 'Starlink' satellites into space. "Unfortunately, the production crisis is much worse than it seemed a few weeks ago ”, writes Musk, according to Space Explored. Because of these problems, several managers had left the company, some of them involuntarily. SpaceX will go bankrupt if the company fails to launch a Starship at least once every two weeks in the coming year.

*https://www.ft.com/content/98f9a39c-de78-4cbf-b98b-0955db98c7dd

**https://finance.yahoo.com/news/tesla-forgoes-1-3-billion-145029118.html?guccounter=1

***https://www.handelsblatt.com/unternehmen/industrie/tesla-sorge-um-batteriegeheimnisse-darum-verzichtet-tesla-auf-milliardenschwere-staatshilfe/27837626.html?ticket=ST-2597923-dZQDcwn3Nwonb3B5dFJZ-cas01.example.org

Kommentar hinterlassen to "Tricky Tesla"

Leave a comment

E-mail address will not be published.


*