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Not all U.S. auto companies are doing poorly
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Tesla Roadster
The big 3 auto manufacturers have seen their auto sales slump 30 to 45% in recent months. Years of bad designs, questionable quality, high costs, and bad management / labor relations have finally caught up with them. Watching the CEOs of the big 3 and the head of the UAW beg congress for money was depressing.
We need to remember that we are entering a new era where high oil prices and global warming concerns will cause major changes to our transportation system. We will probably still be driving cars, but they will probably be very different from the current gasoline powered cars of today.
Tesla Motors recently received $40 million in convertible debt financing from private sources to accelerate manufacture of their Tesla Roadster. This is an all-electric sports car that is now on sale in the United States and Europe. The company is located in San Carlos, California (Silicon Valley).
The Tesla Roadster is a very high performance car. It will accelerate from 0 to 60 in 3.9 seconds and travel 244 miles on a single charge. They are sold out of cars for 2008 and have 1,200 deposits for cars to be delivered in 2009. They are planning on building a 5 passenger sedan for delivery starting in 2011.
Instead of putting more money into the failed businesses of the big 3, we should be looking at funding new companies like Tesla Motors that have the vision to build cars that get 100 mpg or more per gallon. This will greatly reduce our consumption of imported oil over time and if the electricity for these cars comes from green energy sources, we will reduce our carbon emissions and clean up our environment at the same time. The government is actually doing this already. Tesla will receive low interest loan money from the recently enacted $25 billion congress appropriated to build high efficiency cars.
Tesla is planning on building a production plant in California to produce its new sedan. Maybe they will have a chance to get an already built plant cheap from the Big 3 in bankruptcy court. Experienced industry executives will also become available to help build and grow new innovative companies. Creative destruction is fundamental to our good economic performance over time. Reallocating manufacturing facilities to innovative companies will create more jobs over time and make our economy stronger.
