I'm a big fan of Tesla cars, all electric cars, but I wonder how the numbers work out for this deal?
It cost Nevada $154,000 per job provided at this factory? and BTW, the sales of electric cars are just one percent of the total market.
That brings us to the key to the whole strategy, a decision that would raise the stakes for the company and ripple through multiple states: Tesla’s plans to build a gigantic factory to manufacture batteries. To make his new model affordable, Musk decided he needs a plant that can produce 500,000 lithium-ion battery packs per year—equal to the world’s current production. He expects the Pentagon-size facility to cost about $5 billion and begin turning them out by the end of 2016.
Some see this as a bet-the-company move, requiring near-perfect execution and a wholesale public embrace of electric cars, which today account for less than 1% of the auto market. To make the challenge even harder, every big carmaker is racing to develop its own electric models. The factory also means an outlay by Tesla of $2 billion or more—a hefty sum for a company with $3.7 billion in projected 2014 revenues.
These days companies routinely use the cudgel of jobs to extract huge offers from desperate states—a process that can resemble a shakedown. Musk showed himself to have nearly as much genius for that sort of maneuvering as he does for innovation. He took a process that typically plays out behind the scenes and made it public. Musk played an Oz-like role as master orchestrator, sending signals through earnings calls and blog postings, while keeping the states in the dark and playing on their fears of losing out. The combination of his strategy, the electric Musk factor, and the lure of 6,500 jobs inspired excited bidding among seven states and staggering leaps of faith. States were willing to move mountains (or highways, as the case may be) for a chance to have the factory.
Sorry, this is just absurd.