Romney Decides That Thriving Electric-Car Startup Tesla Is a "Loser"

The Citizen's Guide to the Future
Oct. 4 2012 12:21 PM

Romney Decides That Thriving Electric-Car Startup Tesla Is a "Loser"

Tesla Model S
Tesla is scrambling to meet demand for its new, all-electric luxury sedan, the Model S.

Tesla Motors

In one of the sharper lines of Wednesday night's presidential debate, Mitt Romney jabbed President Obama over his green-jobs investments, saying, "You don't just pick the winners and losers. You pick the losers."

Will Oremus Will Oremus

Will Oremus is Slate's senior technology writer.

Burn! But what losers was Romney referring to, specifically? Here's the full quote:

But don’t forget, you put $90 billion, like 50 years’ worth of breaks, into—into solar and wind, to Solyndra and Fisker and Tesla and Ener1. I mean, I had a friend who said you don’t just pick the winners and losers, you pick the losers, all right? So this—this is not—this is not the kind of policy you want to have if you want to get America energy secure.
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For anyone drinking along at home, the Solyndra reference was cause to pound one back. Republican politicians, Romney included, never tire of trotting out the failed Silicon Valley solar-energy startup as a symbol of all that is wrong with Obama's America. But here Romney indicated that Solyndra is just one example of the folly of industrial policy. There's also Ener1, a Department of Energy grant* recipient that filed for bankruptcy earlier this year.

And there's Fisker Automotive, an electric-car startup which—well, actually Fisker is a going concern. In fact, it has just raised a new round of private financing and is gearing up to launch its second car, a 300-horsepower plug-in hybrid coupe called the Atlantic. But its first effort, the Karma, was hampered by recalls and reliability problems, and the Department of Energy cut off funding. So we'll give Romney a pass on that one, even though the company has not cost the government any money and may still have a bright future.

And then there's Tesla Motors, the Silicon Valley-based all-electric car maker that is bent on revolutionizing the auto industry with its sleek, silent, rocket-fast plug-in vehicles. In nine years, the startup has gone from a twinkle in Elon Musk's eye to taking over 13,000 orders for the Model S, a luxury sedan that has drawn raves from just about everyone lucky enough to test-drive it. I am one of them. Mitt Romney, clearly, is not.

The Romney camp is standing by the candidate's diss of the startup, which employs some 3,500 workers, many of them at the former NUMMI factory in Fremont, Calif., which GM and Toyota closed in 2010 amid struggles of their own. Apparently he was referring to recent reports that the company was behind schedule on production of the Model S and had renegotiated some of the terms of its loan from the Department of Energy. But production delays for a startup are par for the course, let alone one that is building a super-high-tech all-electric vehicle from the ground up. And Tesla CEO Elon Musk said in a blog post on Wednesday that the company is paying back its loan early because it has excess cash, not because it is financially troubled. In fact, he said he expects the company to be cash-flow-positive by the end of next month. And its private investors are hardly running for the hills: The company's stock has been hovering near $30 a share, way up from its IPO price of $17 two years ago. There's certainly no shortage of demand for Tesla's products: The latest reports are that it is scrambling to fill 13,000 orders for the Model S, which starts at about $60,000.

To Romney, it seems, even the most promising companies are losers if they involve green energy. The slowly dying coal industry, on the other hand, is apparently a winner. "I like coal," he said Wednesday night, and blamed Obama for the industry's decline.

*Correction: This post originally referred to Ener1 as a Department of Energy loan recipient. It actually received a DoE grant as part of the American Recovery and Reinvestment Act.

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