Elon Musk on How to Build the Future

I'm not sure I did pick a poor metric. Income in the Bay Area is pretty uneven. You see a lot of Teslas at the Google campus, but relatively few at Wal-Mart. Salaries at tech companies are six figure but minimum wage is just above $10/hr.

> Parking is not free, although some municipalities subsidize rebates for EV spots in select garages. Urban dwellers (majority of EV market) nearly never take ferries. Incentives were clearly temporary from the beginning, you are hardly breaking any news to me here.

The article I read indicated that they were, but maybe not. Obviously the tax exemption is the big factor.

> The price of car is not subsidized, a Tesla here costs more dollar-to-dollar than it does in California before rebates.

That's not a realistic claim if the government is waving taxes that would otherwise amount to half the total cost of the car.

It's not very interesting to compare the absolute Tesla cost there and in California. What's interesting to compare is the Tesla cost there vs California relative to other options. A Tesla Model S in California costs about as much as a BMW M3. It looks like in Norway the effective cost of a Model S is closer to a basic Model 3.

> Sure there are (also temporary) import tax incentives, but it's about the only way a government can encourage adoption of clean tech in chicken and egg infrastructure situation. There has to be some upside for being the first guy in the town who can't fill at gas station. As soon as it gains momentum, the incentives will be rolled back. It is however already clear that EV adoption in Norway is a success.

I'm not opposed to tax incentives. My point is just that the "revolution" here is being driven by massive government subsidies. A 50% subsidy will make almost anything a success.

> Also you have to be really really broke to see an ordinary German sedan as a status symbol, certainly not anywhere in Western Europe.

I think this says something about your financial situation that you think the only way to see an Audi as a status symbol is if you're "really broke". I don't know about Norway, but most cars sold in Europe are not Audis or BMWs. Fiat outsells BMW and Audi. So does GM. So does Ford. And Peugot. And Renault. Volkwagon beats Audi and BMW combined. BMW and Audi are not "ordinary German sedans". They are luxury cars purchased by a minority of the population. They are absolutely status symbols.

http://www.acea.be/statistics/tag/category/by-manufacturer-r...

Guess what, same here. An engineer at Statoil makes a lot more than a janitor. Minimum wage here is higher and there's a more elaborate safety net, still living at that end is very uncomfortable. Again I don't see any takeaway from this.

> That's not a realistic claim if the government is waving taxes that would otherwise amount to half the total cost of the car.

This is a realistic claim because the government does not subsidize a vehicle with own money as it is often presented here, but withholds extra taxation. No taxpayer money harmed. Tax discounts are not unprecedented, e.g. tax code here has elaborate cases for families with children, people with disabilities etc. Two people doing identical job can be paying very different amount of tax. Different categories of imported food can have taxes differing by magnitude, and so on.

> What's interesting to compare is the Tesla cost there vs California relative to other options.

I don't think anyone had illusions that Tesla isn't economic in Norway relative to other options. That's why people buy it and I mentioned it before.

The end result is people here drive tons of Teslas and other EVs, and the market has changed for good. When tax incentives removed, people will still drive them, as they are simply better rides overall with simpler maintenance routine.

I don't see in any way why has Tesla miscalculated the market as initially stated. I see tons of their cars on the roads every day, so it arrived here. It is hilarious my benign remark was treated as some classist rub.

> I don't know about Norway, but most cars sold in Europe are not Audis or BMWs.

Look, I'm not sure how it's in the States, but a BMW or Audi won't get you laid in Europe. Kids won't drop their candy and men won't think of your "status". Cabbies drive Merc E class here (not just in Norway). Pakistani immigrants drive German sedans. Everyone knows they are more expensive but not out of range of a middle income family on a financing - just a matter of your priorities. Porsche Cayenne is "luxury", Maibach is, but A5 and the likes, made in hundreds thousands each year is not. Tesla is cool in its own high tech way, but salon trim doesn't give a luxury vibe either.

Point being that poor people don't buy Teslas. That's why inequality of income in the Bay is relevant. Wealthy engineers are buying Teslas because they can afford it. Most of the population cannot. Your government subsidies make Teslas affordable to a larger chunk of the population, but wealth is still a significant factor. Subsidies just happen to be a bigger one.

> This is a realistic claim because the government does not subsidize a vehicle with own money as it is often presented here, but withholds extra taxation.

These two scenarios are effectively the same:

1. Car costs X and taxes are Y. Government waives Y in taxes.

2. Car costs X and taxes are Y. Government provides discount of Y against cost of car.

Whether the government waives taxes or literally helps you pay the car is irrelevant. The net effect on the government's finances (and the customer's finances) is the same.

Again, I'm not saying this is a bad thing. But it is absolutely a massive subsidy.

> The end result is people here drive tons of Teslas and other EVs, and the market has changed for good. When tax incentives removed, people will still drive them, as they are simply better rides overall with simpler maintenance routine.

Maybe. I bet if the incentives disappeared tomorrow a lot of people would stop buying them, especially if the price hasn't dropped on its own. Hopefully incentives like Norways are helping to push down cost permanently by increasing the volume, though.

> I don't see in any way why has Tesla miscalculated the market as initially stated. I see tons of their cars on the roads every day, so it arrived here. It is hilarious my benign remark was treated as some classist rub.

I don't think anyone actually asserted that Tesla had miscalculated the market, only that there hasn't been a revolution yet. Good for Norway for achieving a local one at least.

> Look, I'm not sure how it's in the States, but a BMW or Audi won't get you laid in Europe. Kids won't drop their candy and men won't think of your "status". Cabbies drive Merc E class here (not just in Norway). Pakistani immigrants drive German sedans. Everyone knows they are more expensive but not out of range of a middle income family on a financing - just a matter of your priorities. Porsche Cayenne is "luxury", Maibach is, but A5 and the likes, made in hundreds thousands each year is not. Tesla is cool in its own high tech way, but salon trim doesn't give a luxury vibe either.

Cars in general don't get you laid anywhere. That doesn't mean that they aren't status symbols. Most status symbols aren't actually out of reach of the average middle class family. Smart marketing is to price these things such that they are affordable but also a decent stretch. That keeps them reasonably exclusive while also providing access to a massive market of consumers. This is no different in the US. Middle class families can afford BMWs, but most of them don't.

You're welcome to think that expensive cars aren't status symbols if you like, though.

True, but here they wouldn't buy cars at all, just use bus. The income extremes don't matter as much if we stick to the cars that are actually on the roads. If we restrict to what lower vs higher middle class buys, calling that 'income inequality' in original sense of the problem is a joke. The gap is not huge and social mobility there is relatively easy (in Norway).

> The net effect on the government's finances (and the customer's finances) is the same.

There are other fiscal effects as well, even if not explicit in annual budgeting. E.g. my town is mostly surrounded by mountains and every winter it has an exhaust cushion over it. Which triggers crises among the asthmatics, so the municipality has to introduce date driving for prolonged periods. E.g. drive with odd number licence plate on odd days and even on even. This has both direct costs and productivity losses.

The whole idea to push for electric was to reduce externalized costs of car pollution on population and the nature. Mind you it's not the first such an effort: in the 1990s, the government here (and in some other countries) promoted diesels vs petrol cars for lower emissions. That is until they learned about particle emissions of diesels.

And how it was done? Correct, import tax rebates on diesel vehicles. Except you never ever hear anyone saying "diesel revolution has not arrived" or "diesel has to be subsidised by government to compete".

> You're welcome to think that expensive cars aren't status symbols if you like, though.

Maybe I misunderstand the concept then, point is these cars are bloody ordinary in Europe. When I singled out A5 I meant it's being bought by people who previously would consider different class vehicles, as Tesla was meant to compete with 7-seaters and top of the line sedans.