Elon Musk is an impressive fellow. He has put himself at the helm of by far some of the “coolest” companies in the world. His three companies are SpaceX, Solar City, and Tesla.
Read the lofty interplanetary goals from the SpaceX website…SpaceX designs, manufactures and launches advanced rockets and spacecraft. The company was founded in 2002 to revolutionize space technology, with the ultimate goal of enabling people to live on other planets.
Oh, just that! Wow! Lofty goals to say the least.
The other two companies are almost as impressive. Tesla Motors has boasted luxury vehicles fully electric with such cool accessories like “Autopilot” and “Hands free” driving and “Traffic Aware Cruise Control”. These cutting edge claims have made Tesla the car company of the future!
The third Elon Musk venture is called Solar City. They are a manufacturer of solar panels for residential and commercial use. They boast, “Get control of your energy costs with America’s #1 solar provider”. This is where all the cool stuff starts to go all wrong.
Elon Musk even has a cool name and he is a billionaire. I don’t think he wears a cape or has a bat cave, but I wouldn’t put it past him. If you have the right friends, you can accomplish anything in America. Sometimes, even the coolest of companies just don’t turn a profit.
Solar City, makes solar panels and kind of rhymes with Solyndra, remember them? It turns out that no matter how “cool” it is to talk about owning a solar panel company, it’s pretty difficult to make a buck building and selling solar panels. True market viability may only exist on another planet. There have been literally dozens of companies with liberal dreams of solar panel success who have ended in bankruptcy. To name a few: Suntech Power, LDK Solar, Q-Cells, and the most famous disaster, Solyndra. It looks like Solar City may be on its way to the same fate. Over the last year USA Today reported that Solar City has been sucking wind. It has lost 63% of its value.
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It’s been almost as bad for Tesla. The revolutionary car company took a 40% hit. That is about a $15.7 Billion in market value losses between the two companies. Ouch! Elon Musk personally took a 50% loss on the two beleaguered ventures.
So what? No big deal…right? Billions invested, billions lost, what goes up, comes down. Well, that would be true if it weren’t for that fact that billions and billions of the money had come from the American taxpayer…not just venture capitalists. Solar City and Tesla have taken more than $4.9 billion in subsidies from federal and state governments. Like an exploding SpaceX rocket, all that money is up in flames.
Both Tesla and Solar City have failed to bring their product successfully to the marketplace and actually achieve a market share. Market share comes from happy people who wait in lines to get your product and then you actually deliver the product. Products that people need and love don’t need billions from the government. The fact is that both of these companies would not exist without the backing from government entities.
The other wealthy individuals who invested in these companies, including Elon himself, don’t sweat 60% losses because the government will in all likelihood bail them out. What a great investment! If it succeeds you make millions or billions on the success of the company. If it fails, the government will either take the fall or bail out the investors. A real win/win for “Crony Capitalism”.
Right on the front page of the Solar City web site it makes this staggering claim, “We’re backed by billions! We’re revolutionizing the energy industry with the strong support of partners who have funded billions of dollars’ worth of solar projects with us. They know that clean, more affordable solar power is the bright solution for homeowners, their investors, the environment and the future.”
Here is a list of the companies who have invested in Solyndra…I mean Solar City. Honda, Goldman Sachs, Google, US Bancorp, Citibank, Bank of America, Credit Suisse, Oz-Corp, and Hydra. Okay, I made up those last two, but strangely omitted from the list of folks who have invested billions in these failed ventures is the American taxpayer!
I’m quite sure that all those companies who invested are going to be fine no matter what happens to Solar City or Tesla because the money has already changed hands. The success or failure of these companies is irrelevant when they are used solely as a means of distributing billions of government dollars into private hands of friends…hence the term…cronyism. It has nothing to do with creating a crazy awesome product and everything to do with helping friends make out like bandits.
These companies are really cool to look at. Elon Musk might be a real-life Bruce Wayne, but the truth is these exciting ventures are seemingly just business as usual among the business elites and a corrupt government.
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