Elon can't legally financially entangle Tesla to SpaceX due to Tesla being a public company, so his hands are tied.
Tesla is clearly benefiting from protectionism and its sales would collapse if BYD were allowed to openly sell in the US. Most people just want affordable, maintainable and reliable cars.
> Elon can't legally financially entangle Tesla to SpaceX due to Tesla being a public company, so his hands are tied.
He absolutely could do it, just like he did when Tesla bought SolarCity. It just isn’t as easy when one of the companies is public than when both are private.
We're witnessing a bailout and downloading of costs, at scale. Whether or not one buys into whatever the vision of these companies are - it's clear, there's interdealing.
Tesla theoretically now owns a chunk of xAI... whose valuation will no doubt increase due to the internalized SpaceX acquisition. Append to this a future IPO, as discussed in the artice, presumably an eventual premium of 20-50% (reasonable, 14% purely for the ibankers when this will happen)... yields to an interesting bailout situation.
To me, the real question is why. The $2B from Tesla can't possibly move the needle for any party involved in this transaction. If this were to be work 50x as opposed to a potential 50% upside (hell, make it 2x for argument's sake) it still doesn't compute. So what's the actual reason.
> Tesla is clearly benefiting from protectionism and its sales would collapse if BYD were allowed to openly sell in the US
So would most of EU car makers in Europe. China is not playing by the same rules and everyone with car manufacturing domestically is slamming them with tariffs.
How isn't China playing by the same rules? Every country subsidises and supports industry it thinks is important, surely nothing would stop Germany from investing into Volkswagen and BMW or the US from investing into Ford the same way China invests into BYD?
Environmental regulations around rare earth minerals needed for the batteries. China loosens them thus making it cheaper to mine which starves out all global competition that actually has tighter regulations which protect the environment.
Then of course there is cost of living and salary; both of which are lower in China compared to where most legacy auto manufacturers are.
So China can pay their employees less and pollute the environment more in order to create an affordable, very high quality vehicle.
I can understand a small amount of tariffs to help "even the playing field" but not the 100% tariff or whatever was proposed against BYD
Hm, how are tariffs state subsidies? They're a tax on some products to give other products a competitive edge, but that feels different from a subsidy?
And what does that have to do with China playing by different rules than the west?
If not for the tariffs, the domestic company would have to charge lower prices to make sales. Thus tariffs provide domestic companies with additional revenue from domestic consumers.
Tariffs and subsidies both help companies succeed, but they're not the same thing. For one, tariffs can only really help your country's companies be competitive within your country. Subsidies can help your companies be competitive globally.
He's broken pretty much all the other financial rules.... for example, the amount of blatant self-dealing he gets away with is staggering.
As long as the consequences of his actions continue to increase the paper value for investors, regulations don't really have teeth because there aren't damages. So the snowball gets bigger and the process repeats.
> Elon can't legally financially entangle Tesla to SpaceX
Bill Ackman has proposed taking SpaceX public by merging it with his Pershing Square SPARC Holdings, distributing 0.5 Special Purpose Acquisition Rights (SPARs) to Tesla shareholders for each share held. Each SPAR would be exercisable for two shares of SpaceX, aimed at enabling a 100% common stock capitalization without traditional underwriting fees or dilutive warrants.
With SpaceX IPO set to be one of the biggest of all time, this could have a pretty gnarly financial engineering impact on both companies -- especially if the short interest (direct or through derivatives) remains large.
Why would SpaceX go public? They already have a robust enough private market to give liquidity to all of their employees and shareholders who want it. They can get more private investment.
Going public would add a lot of hassle for little to no gain (and probably a negative of having to reveal their finances).
It has been widely reported for weeks that SpaceX is planning to go public in a few months. The reason is they have big plans to run a vast network of AI servers in orbit and will need to raise a massive amount of funding. xAI merger fits with that plan. I'd assume SpaceX still plans to go public.
Was ignored on HN but here's an article explaining:
It's all BS. There is no viable way to put industrial levels of compute into a space based platform that can work within the severe thermal, power, mass/volume, radiation, reliability, and economic demands. It is just stupid smoke blowing to separate idiot investors from their money. J-school grads don't have a clue what they're parroting about.
it wasn't ignored on HN, there were many articles correctly noting that building data centers in space is a stupid stupid idea because cooling things there is infeasible
Google, Blue Origin and at least 5 other smaller companies have announced plans to build data centers in space. My understanding is the cooling issue is not the show stopper you assume.
yup, bezos said "we will be able to beat the cost of terrestrial data centers in space in the next couple of decades". presumably this means they'll need huge ass radiators, so its all about bringing down launch costs since they'll need to increase mass.
Was doing some back of the envelope math with chatGPT so take it with a grain of salt, but it sounds like in ideal conditions a radiator of 1m square could dissipate 300w. If this is the case, then it seems like you could approach a viable solution if putting stuff in space was free. What i can't figure out is how the cost of launch makes sense and what the benefit over building it on the ground could be
AI datacenters are bottlenecked by power, bandwidth, cooling, and maintenance. Ok sure maybe the Sun provides ample power, but if you are in LEO, you still have to deal with Earth's shadow, which means batteries, which means weight. Bandwidth you have via starlink, fine. But cooling in space is not trivial. And maintenance is out, unless they are also planning some kooky docking astromech satellite repair robot ecosystem.
Maybe the Olney's lesions are starting to take their toll.
The shadow thing can be solved by using a sun-synchronous orbit. See for example the TRACE solar observation satellite, which used a dawn/dusk orbit to maintain a constant view of the sun.
Every telco satellite can cool its electronics. However, more than a few kW is difficult. The ISS has around 100kW and is huge and in a shadow half the time.
The cooling is the bit where I'm lost on, but it will be interesting to see what they pull off. It feels like everyone forgets Elon hires very smart people to work on these problems, it's not all figured out by Elon Musk solely.
Google, Blue Origin and a bunch of other companies have announced plans for data centers in space. I don't think cooling is the showstopper some assume.
Good call out, and really interesting. SpaceX being the cheapest way to get things into space, it seems like SpaceX is about to become extremely lucrative.
I've been thinking about this recently as I hear it often. Would people who want to buy a car in the Tesla price range really choose a slightly cheaper Chinese EV if those were available?
Personally I have a hard time believing this. But even if you had similarly priced Chinese options, I would guess the main reason for buying a Tesla is not just because you want an EV. While a Tesla will be a reliable baseline EV, surely the reason you (or at least I) would buy one is for the supervised self-driving feature.
Chinese EVs self-drive too. You can buy level 3 cars today that are cheaper, have more features, better build quality, and better reliability. Having just been in China.. yeah it’s not close they are way ahead of us and the gap is growing fast.
BYD are just affordable and maybe reliable, regarding maintenance their spares are hard to come by and are almost as hard to work with as Tesla and other brands.
I've done plenty of work on my own Tesla. It's not hard to work on at all. Parts are not even very difficult. There are plenty of 3rd party shops (such as one I went to when I needed to replace my windshield.) I really wonder why people continue to think this. It's not 2016 any more.
Tesla body work is extremely expensive. Aluminum, extensive welding instead of fasteners, substantially reduced modularity due to castings, specialized tooling just off the top of my mind.
Body work is expensive no matter what car you're working on. The presence of paint ensures it. The OP was talking about "maintenance" and body work doesn't fall under that category.
No, but I live in a country were Chinese cars have been sold since the 2010s and spare parts are still an issue. It might be an issue with their sales partners here, but many sell other brands from Korea and Japan and have no issues with them.
It's "ironic?" considering Tesla launching in China is what created the necessary supply chain to turn BYD into the powerhouse it is today. Tesla's greed will become their own demise.
Tesla cars made in Shanghai are sold in Europe and other places. That is helping them be competitive and they haven't had much price pressure until recently. Just because the Chinese have their own internal competition and deflation which drove their prices down aggressively doesn't mean it was a bad idea to build there. Also the idea the Chinese couldn't figure it out without an American company coming there first to show them is pretty silly.
Tesla Shanghai opened in 2019
BYD made their first hybrid in 2008 and they were a battery company since the 90s
Tesla is clearly benefiting from protectionism and its sales would collapse if BYD were allowed to openly sell in the US. Most people just want affordable, maintainable and reliable cars.