I like Tesla like the next guy, but when it comes to investing, especially public money, the burden to prove profitability comes on the company.

I'm glad this happened, but the GP is not wrong to criticize this. It's still taking public funds and putting them in a company who still hasn't made a profit.

You summed it up very well.

"Profitable in a few months" means you're unprofitable. We can draw up all sorts of extrapolations based on preorders and expected order rates etc., but until the past month's income statement shows green, a business is not profitable. It really is that simple.

I hope nothing but success for Tesla in that they usher in an electric car revolution (just imagine if the USA became the primary source of electric cars for the world), but until then I'd like to see some numbers if I'm paying for Elon to run his mouth.

I'd rather own stock in a company (early Google for instance), that is a few months out from 'profitable', with a sales curve that is trending up, up, up, than stock in, say, GM, in the last month or two that it was profitable.

"Not profitable yet" does not necessarily imply "doing it wrong", but you're right, it is easier to ignore that fact, make a cheap snarky comment, and then act self-righteous because you know the definition of the word 'unprofitable'.

I'm not sure I understand what you're saying. Most startup capital goes to companies that aren't profitable.

Maybe this'll help you understand - Musk is not getting venture capital, he's getting our money.

Government funding is needed to create new industries or spur innovation in nascent fields. Entire industries like online companies would not exist without DARPA funding of internet, fast food companies would not exist without govt. funding of the interstate.

In light of the fact that Detroit got bailout money its perfectly sensible for the govt to invest in innovation within the auto industry.

I don't agree with this AT ALL.

It's not the role of government to decide when to "fund" or "not fund" certain types of industries. Let the private sectors decide if that's a good idea or not. Do you agree with farm subsidies?

Are you glad your tax dollar get spent on projects that may have no practical purpose because there's no market or products ready to use them?

That sounds like an awfully naive version of how government works. What about DARPA grants to university research projects? Or NIH grants for medical research? What about speculative defense projects, like (to name a bad case) missile defense, or (a good one) unmanned aerial vehicles?

The government "funds" and "doesn't fun" "certain industries" all the time. In fact, it even does what it's doing with Tesla in a smaller scale routinely, through the SBA process. The Tesla loan is a drop in the ocean compared to the SBA loan budget.

I understand that the government funds lots of projects as you mention, my point is that I don't think the government should fun these types of projects and it's going beyond the intentions of the founders.

I suppose I'm in the minority, having a small government is better than a fat government.

I'd rather have an Internet and atorvastatin than an ideologically pure government. But that's just me.

The private sector is not a perfect allocator of resources. If we let the private sector alone decide where money went there would, for example, be very little funding for basic research.

I hope you're not saying that the farm subsidies are meant to encourage new technology? If you are, what technology would that be?

Actually, I was hoping to bring up farm subsidies as a failure of spending government money on something that should be handled via the private sector.

But is it the lesser of 2 evils that Tesla get some that would have otherwise gone to say, GM?

Considering that tesla is valued at 1BB (http://bit.ly/14WPOY) and has had 701MM in funding (http://bit.ly/2lv8So) I would say the onus is on you as the refuter to show data that they will be "profitable in months."

While renewable energy cars is something we all hope will eventually succeed, I'm not sure how sound it is to throw a bunch of money at Elon Musk.

Instead of waiting on Musk to provide evidence to backup his statement, you're seriously putting the burden on kirse to prove that Musk is lying...? That's a weird path to take. The fact is Tesla isn't profitable yet, and although Musk says they will be in the coming months, that talk doesn't mean anything until the reports are released showing profitability.

I'm sorry, I'm not suggesting whether he's right or wrong. Like I said, it's entirely possible Musk is wrong, or lying.

What I'm saying is, looking at a pre-revenue startup and calling it "unprofitable" may be a true statement, but it's certainly not an interesting one.

Ah ok, that's fair.

> Musk says they're on track to be profitable in months.

How many startup CEOs say anything else?

...and how many of them turn out to be correct?

"(b) Detroit auto companies have historically been very profitable."

Have you ever heard that phrase, "past returns not a guarantee of future returns"?

To Detroit it applies triply. Autos are no longer a growth industry, the US auto market is no longer free of foreign competition, foreign customers are no longer interested in US-made cars, and the union-guaranteed benefits to Detroit autoworkers are no longer financially sustainable.

This is a company that said 6 months ago that they couldn't even do proper cost accounting. From what I've read about them in the past, this is one of the last companies I'd be giving hundreds of millions to.

On the other hand, they seem like they are very close to having an incredible product.