WSJ Holman Jenkins Jr: "Tesla is a Compliance Company"

dauger said:

In response to Tesla's recent presentation at a Michigan automative seminar, the WSJ posts this trash:

Tesla Is a Compliance Company - WSJ

I see a long history of hit pieces by Holman Jenkins. I can't count how many outdated myths and falsehoods in this one. I see anti-Tesla trolls in the comments, so it's a rough crowd if you want to straighten out the record.

If you hit a paywall, just Google "wsj tesla compliance".

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True enough. It is hard to argue overmuch when several of his facts are correct. Therein is a problem when the credits are swappable and are indeed highly lucrative for Tesla. That only part of the story is told, and he leaves out the non-compliance product features, is only to be expected from the source. Distorted as can be, but probably not actionable. Just the way they intended it to be.

It is clear that Tesla seeks tougher mandates in part out of self-interest and that the credits are a significant part of their financial picture. But the article includes some pretty laughable claims. For instance the statement that "Tesla’s entire market capitalization of $34 billion is nothing but the discounted present value of its expected future subsidies" is pretty easily disproved by anyone with a financial calculator and access to Tesla's financials, which presumably includes the WSJ. The claim that Northern Virginia gets "60% of the electricity is generated from carbon-emitting sources, predominantly coal" is also demonstrably false. 60% is reasonably close (I think it should be 56% this year) but natural gas has a larger share than coal and continues to grow year over year compared to coal.

Also, the argument at the end appears to be "it won't make much difference in climate control, so we might as well not bother" which is a shockingly weak argument, even for Jenkins.

ZEV credits are borderline immaterial at this point(when compared to total revenue) and the tax credit start to get phased out after production of 200k vehicles. Next.

The WSJ is a compliance newspaper. Funny how these people always conveniently forget that half of Tesla's sales are from outside the US.

(LMB spouse)

Owned by Murdoch. Need I say more?

The marvelous thing about Tesla is that is consistently and overwhelmingly proves the critics wrong and often make them look like total fools. So it is with Mr. Jenkins. He is, shall we say, an ass.

Of course, the $35k projected price for the Model 3 is without the tax subsidies.

But anyway, looking at the comments on there, it's not even worth commenting back.

I wonder if Tesla 10 years from now sells a few million vehicles per year and pays more taxes per year from exports, than it ever got in aggregate from government loans, ZEV credits etc., if all those anti-government folk that commented will start lauding Tesla as the governments' biggest success?

If you make the argument that Tesla can't stand on its own without the government, then surely you have to give the government credit if it succeeds.

@deonb: no, no, see, if Tesla becomes wildly successful, that's just proof that the subsidies were never really necessary in the first place.

Facts just don't matter when you already know the answer.

Jenkins has criticized Tesla Motors before. Doubtless he will again. It's an opinion column, so don't blame WSJ journalism.

dauger said:

If you hit a paywall, just Google "wsj tesla compliance".

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No joy. All links go to WSJ paywall.

I didn't see the piece in today's print version of WSJ. Did I miss it yesterday or was it just not worthy of printing?

I felt compelled to remind Mr. Jenkins that the goal is to clear the air...something that does not come up in his opinion. The state and Federal government set the rules for creating cleaner cars, and Tesla set about to meet the need. I posted this comment on his WSJ piece:

Well.....I think Mr. Jenkins needs to take a trip back to the 60s and 70s here in Southern California to fully comprehend what the original generation of automobiles could do to the environment in which we live. A couple of days ago, I had the pleasure of driving past Pasadena - this is August - and actually see the mountains! That was not possible until this state demanded cleaner automobiles...and power plants, too. California'a standards went on to shape the global automobile industry's priorities...and are cars are cleaner, safer and more efficient than ever.
I was working in Detroit in the 70s, and watched our traditional auto makers seemingly spend more time on lobbying against emission regulations than on meeting those regulations. In the process, the Japanese took over a huge portion of the market. It comes down to leadership, doesn't it?
So...how will Detroit address Zero Emission Vehicles? Fight or comply?

Aren't we past when attack pieces on Tesla as a concept have any effect on the main core of buyers and investors? Only the fringe weak mushy people will be affected by any attack crap at this point, and the rest of the people need hard solid facts to sway action.

The main problem Tesla faces right now is political, and it would take an enormous amount of political evil to slow Tesla down. Everything is on Tesla's side, and Earth has everything to win from Tesla succeeding and Tesla and Earth have everything to lose by failing. The pressure on politics to have Tesla succeed are overwhelming. Probably the worst thing Tesla could do right now is gain an attitude and go after stupid politics and lose enough ground to become overly vulnerable. Tesla is almost getting so big now that it can withstand dark spots in the political geography without care. Not quite, but very nearly there. Nothing's a given, of course, but it's definitely in a particular position of relative lack of weakness, and getting moreso as it continues to increase productivity, quality, reach and product comprehensiveness.

Of course, that's assuming they stay on their path and Elon doesn't have some sort of wacky religious conversion or something akin to that.

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Ed Hart said:

I felt compelled to remind Mr. Jenkins that the goal is to clear the air...something that does not come up in his opinion. The state and Federal government set the rules for creating cleaner cars, and Tesla set about to meet the need. I posted this comment on his WSJ piece:

Well.....I think Mr. Jenkins needs to take a trip back to the 60s and 70s here in Southern California to fully comprehend what the original generation of automobiles could do to the environment in which we live. A couple of days ago, I had the pleasure of driving past Pasadena - this is August - and actually see the mountains! That was not possible until this state demanded cleaner automobiles...and power plants, too. California'a standards went on to shape the global automobile industry's priorities...and are cars are cleaner, safer and more efficient than ever.
I was working in Detroit in the 70s, and watched our traditional auto makers seemingly spend more time on lobbying against emission regulations than on meeting those regulations. In the process, the Japanese took over a huge portion of the market. It comes down to leadership, doesn't it?
So...how will Detroit address Zero Emission Vehicles? Fight or comply?

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God, what a wonderful response, Ed Hart. Thank you for letting us see your writing.

The advertising monies spent by oil companies and automakers prevent the WSJ from objectively reporting on Tesla Motors. The conflict of interest is overwhelming.

Apart from the clearly provocative headline designed for clicks, what does everyone speculate is the author's objective in writing this piece?

nathanharman said:

Apart from the clearly provocative headline designed for clicks, what does everyone speculate is the author's objective in writing this piece?

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The narrative that alternative energy is bad. Oil, gas, and short term thinking prevail in WSJ-speak. Long term? They consider that is merely fringe "tree huggers" who want to move to alternative energy and reducing greenhouse gas emissions.

Merely more of Rupert Murdoch's attack on the Earth.

Jackl1956 said:

The advertising monies spent by oil companies and automakers prevent the WSJ from objectively reporting on Tesla Motors. The conflict of interest is overwhelming.

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Have you ever read WSJ? I subscribe and I can't remember seeing an ad for either cars or oil companies. Closest thing was yesterday's ad for Pebble Beach Concours d'Elegans.

rxlawdude said:

The narrative that alternative energy is bad. Oil, gas, and short term thinking prevail in WSJ-speak. Long term? They consider that is merely fringe "tree huggers" who want to move to alternative energy and reducing greenhouse gas emissions.

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I don't think "bad" is the right term here. There is a school of thought, that Jenkins & company apparently hew to, that (a) short term results are all that matter (destruction of the earth will occur on somebody else's watch, right?), and (b) companies have absolutely no responsibilities other than maximizing profit and shareholder value. This way of thinking leads to the conclusion that in today's world (because fossil fuels are sold far below their cost to the environment) it is not good economics to put any money or effort into renewables or other "green" technologies.

Here's the thing: if we agree that companies/corporations have no environmental or social responsibilities, then we must also agree that somebody - the government in this case - has to see to the public good of protecting the environment (to say nothing of protecting the coastline from being submerged). Thus it is disingenuous in the extreme to insist on maximum corporate profits and also rail against government subsidies toward environmental protection.

Some companies take a nuanced view: they are willing to forego some profit to do what's right. I remember Daimler taking this position, and Tesla seems to be trying to. It's a shame to see "journalism" that is biased toward short-sighted and selfish policies.