Elon Musk–The Left’s Idea Of An Entrepreneur–A Relentless Sucker Of Government Subsidies


    Do not think about, write about or deal with  human behavior without determining the effects of incentives. It’s not their money, of course they’ll waste it.

   Sometimes, things become caricatures of themselves. Sustainability through endless government subsidies. Like the plot lines in Hill Street Blues, it would be difficult to make this up.

Peter Foster
Off the wall with Elon Musk

While obviously ingenious, a number of costly questions hover over Tesla’s domestic Powerwall

Elon Musk sounds like a character from Atlas Shrugged. The question is whether he would be a hero or a villain.

The charming South African-born, Canadian-educated, California-based entrepreneur is a bona fide technological and business genius, but he has hitched his corporate wagon to alternative energy, the need for which is predicated on climate catastrophe, and whose “success” depends on massive political subsidy. Climate catastrophe in turn is the master cause of those who deride markets and claim that — despite the abundant evidence of history — we need far more government direction in our lives.


    Solar power and battery power. Pointing to failure.

Last week, Musk — the man famous for Tesla’s electric sports car and private space vehicles, among other things — modestly claimed that a “fundamental transformation about how the world works” was imminent because of Tesla Energy’s “breakthrough” in storage technology: a gadget called the Powerwall. The Powerwall looks like a giant iPhone that you bolt to the wall of your house, storing energy from solar panels, possibly those bolted to your roof.

While obviously ingenious, a number of questions hover over this domestic attachment — which can be mounted outside the house as a symbol of your conspicuous environmental virtue. Is it — or does it promise to be — economic, or is it just another expensive step down a technological cul-de-sac? Does the true technological revolution in oil and gas production threaten not merely the economics of the Powerwall, but more fundamentally undermine climate policy, which was unworkable in the first place?

When it comes to potential Randian villainy, Musk is the recipient of massive government handouts. Tesla’s recent losses would be greater but for cashing in government emissions credits (Kathleen Wynne’s desire to leap into bed with California and Quebec on cap and trade mean that Ontarians may soon boost Musk’s bottom line). California and Nevada have provided Tesla with tax credits of over $1.5 billion (all figures in U.S. dollars). Then there’s the $7,500 U.S. federal tax credit, plus state rebates, for those rich enough to drive a Tesla.

The Tesla is by all accounts is a technological marvel — for an electric car, that is — but is expensive, has tiny sales (50,000 projected this year) and suffers from that major problem of electric cars: where to fill up. We also might remember that while electric cars are emission free, the power stations from which they derive their electricity are not. This made Musk’s demonization of fossil fuels at the Powerwall roll out — via the ritual picture of smokestacks and a grossly misleading Gore-esque projection of soaring CO2 emissions — hypocritical.

“It sucks” he said. But then he admitted that battery technology sucked too. A list of flaws appeared on a screen: “Expensive, unreliable, poor integration, poor lifetime, low efficiency, not scalable, unattractive.” Never mind. The Powerwall and a larger version, the Powerpack, would take care of all that. It would be great for people in remote parts of the world, similar to how cellphones enabled underdeveloped countries to leap right over land lines.

Musk claimed the Powerwall cost a mere $3,500, but the full installed cost is more than $7,000. That has to be added to the cost of electricity. Throw in solar panels, preferably from Musk’s SolarCity, and you’re talking $20,000.

Critics quickly calculated that the Powerwall in fact wouldn’t be able to maintain electricity in the average American house for more than a few hours. You certainly couldn’t charge your Tesla from it.


   Not enough power to charge your electric car. My, my. Aside from that, quite practical. Just shell out the cash and make sure you have a backup line to the standard electrical transmission lines. Like all sustainable energy schemes, one needs 100% backup from traditional energy schemes.

The policy ghosts looming at Musk’s presentation were not merely that government-promoted wind and solar are everywhere proving more expensive and less reliable than forecast, but the existence of all that cheap oil and gas.

This inconvenient truth was acknowledged earlier this week in a report, Energy Technology Perspectives 2015, from the International Energy Agency. The report claimed that since alternatives were flagging, everybody had — Animal Farm style — to try harder. The UN’s forthcoming Paris meeting was doomed, so policymakers had to develop and deploy “new, ground-breaking technologies.” The key was evermore government R&D spending.

As examples of “success,” IEA chief Maria van der Hoeven cited Saskatchewan’s carbon capture and storage scheme, and the “rapid growth” of photovoltaics. She failed to stress the giant subsidies attached to these schemes.

Her greatest example of energy innovation was ironic indeed: the shale gas and oil boom! She peddled the key role that governments have to play in creating “signals” for entrepreneurs, but failed to note that the shale oil and gas boom took place despite the White House’s desire to kill oil and gas.

None of this is to say that there will not be great breakthroughs in alternative energy, but, as with shale gas and tight oil, they are unlikely to come from government, which tends to promote activity in precisely the wrong direction. Far from pointing to the future, Elon Musk in fact is reminiscent of a visionary whose heyday was fifty years ago. Amory Lovins was the guru of the “soft path” of locally-generated power. He also conceptualized a fantasy vehicle call the Hypercar, which would run off fuel cells. Lovins vision proved to be all hype. Elon Musk is a genuine entrepreneur with the ability to turn vision into reality (albeit sometimes with lashings of government money). That makes him potentially more costly both to his shareholders, who deserve what they get, and society, which doesn’t. Hank Rearden he isn’t.


   The perfect situation for sustainable energy. They should just invent a steam car which burns money in its boiler.

Government Job or Respect–Which’ll It Be?
Cheerio and ttfn,
Grant Coulson, Ph.D.
Author, “Days of Songs and Mirrors: A Jacobite in the ‘45.”
Cui Bono–Cherchez les Contingencies


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