How Desperate Is Elon?

Guest Post by Eric Peters

Elon can’t sell his cars – so he is suing to make people buy them.

Or at least, suing to compel the government to keep on paying people to buy them – if that distinction amounts to any meaningful difference.

Canada had a law – like the one in the U.S. – which greatly subsidized the individual purchase of Teslas and other electric cars via rebates bestowed upon those who did buy them. These purchaser subsidies amounted to several thousand dollars each, and worth a lot more to Tesla, et al, since without them the incentive to buy an electric car dims considerably.

When the subsidies dried up in Denmark, so did Tesla’s sales – by 94 percent. That’s not a typo. With the subsidy in place, 2,738 Teslas were sold in 2015. With the subsidies gone, 176 Teslas were sold the following year.

Elon has admitted openly that he can’t do “business” without these subsidies: “Clean energy vehicles” – as he styles them – “aren’t attractive enough to compete without some form of taxpayer-backed subsidy.”

Elon’s language is always a little fuzzy. The subsidies are not “taxpayer-backed,” which implies something akin to consensual approval. They are government enforced transfer payments, the funds mulcted from unwilling taxpayers. What the government “gives back” – i.e., the subsidy – is taken out of the hide of some other victim. And the receiver of the subsidy is artificially advantaged at the expense of someone else.

In any event, when the government of Ontario, Canada announced this week that it planned to eliminate the subsidies  for EVs – at least, those which pay people with other people’s money to buy Teslas – Elon and his lawyers ran to the courts for succor. Time to call Saul!

“The decision has already inflicted substantial harm on Tesla Canada in the form of lost sales,” the brief contends.

And, it’s true – in the same way that’s it true a burglar is harmed by a homeowner with a baseball bat, who successfully runs the burglar out of his house before the burglar can make off with the TV set.

The real harm has been caused by Elon.

He has singlehandedly perverted the market for electric cars – which aren’t an intrinsically stupid idea – by stupidly building them to be high-performance and luxurious, which has made them much too expensive to be anything other than low-volume indulgences for the virtue-signaling affluent. And – because of the Lemming Effect – steered almost every other car manufacturer in the same stupid direction.

There is only one electric car on the market which stickers for less than $30,000 – and only does so by $10. It is the $29,990 Nissan Leaf.

The next most “affordable” electric car is the $36,620 Chevy Bolt.

In both cases, this is at about twice as much as an IC-engined economy sedan such as the Hyundai Elantra I am test driving this week (base price $16,950).

But electric cars don’t have to cost twice as much as IC economy cars.

They cost as much as they do only in part because they are electric cars. The other part is the cost of Me-Tooing Tesla’s electric cars. Because Teslas are quick and slick and full of gadgets, the manufacturers of other electric cars feel compelled to compete with Teslas, by designing their cars to a similar standard.

They must also be quick – or at least not be “slow” – regardless of the efficiency/cost benefit of slowness, which after all is what electric cars should be about, assuming they are about costing you less to drive than an IC-engined economy car or at the very least, not twice as much.

And if they aren’t about costing less, then why bother? 

Or rather, why subsidize?

One can make a blanket moral indictment against any subsidy for anything since a subsidy is by definition the giving over of money not earned by free exchange to a thief-by-proxy – in order to benefit him at the expense of unwilling victims.

But subsidizing high-performing/high-cost electric cars for virtue-signaling affluent people who ought to be buying their own cars is a species of obnoxiousness akin to rent-controlled luxury apartments in Manhattan. Marie Antoinette is said to have suggested that starving Parisians ought to eat cake – but she at least had the decency not to insist they pay for her cake, too.