There were several:

* The business argument for electric cars has been there for a long time. It's obvious to anyone who looks at it that there's an efficiency to using electricity instead of gasoline, as evidenced now by Tesla's incredibly low cost-per-mile. That of course doesn't explain Fisker....

* Many of us started believing in Tesla almost immediately after hearing the 3-part business plan: Build a ridiculously fast, desireable sports car (which they did, and brought it to market long before the DOE loan), then build a luxury car, then build a mass market car. I had a sense Tesla would do well with this plan, for the same reason I think Square will do well where others will fail: You need more than a viable destination, you also need a viable stepping stone at every point between zero and profitability. Tesla always had this plan. It was a good one. It's proving itself to be a good one.

* Did I mention they already had built, brought to market, and made real revenue off a car? You can't say that about Fisker.

* Musk had a track record as a successful CEO.

"Fisker thinks the most important thing in the world is design, so he outsourced the engineering and manufacturing. But the fact is that's the crux of the problem. And he's outsourcing to people who don't know how to solve the problem. So he came up with a product – it's a mediocre product at a high price. It looks good. Particularly from the side it looks good. I don't love the front. It looks too much like a caricature of a Mexican Bandito, the grille. The car looks very big, it's bigger than the Model S, but it has no trunk space and it's cramped inside, particularly in the rear seats. The mark of a good design is something that has great aesthetics and great functionality."

The DoE actually has a better record than most venture capitalists and angels, but in reality, you need a pile of failures to get a success. Failure is the engine of success, and the demand from the right that the government not do anything that might fail actually acts to increase government failure and expense, by making agencies so risk-averse that they spend way way more money on analysis and over engineering to avoid failures. That's one reason why SpaceX can beat NASA military contractors because they design and test to try to reduce failure to zero.

If you care about small, effective, cheap government, it would be paradoxically better IMHO, to let the government dole out cash like a VC with the expectation of 40 failures for every 1 mammoth success.

What I don't get is, people on the right never complain about all of the government failures on military spending. X-Ray lasers, planes and tanks that don't work, crazy and kooky DARPA projects. Hundreds of billions are flushed down the toilet, trillions if you look at the disaster that is the F-35/JSF, and here they are whining about Solyndra.

Isn't the huge military industrial complex a ginormous distortion of the market? Why is it so much more terrible for the government to fund early stage industry (which is relatively cheap), but perfectly ok to give huge incentives to oil companies in taxes, regulations, military and state department support, or to spend hundreds of billions on weapon systems that never get deployed or used?

I wonder if it has has more to do with cultural conservatism than fiscal conservatism. The kind of George Will "Fossil fuel Cars are American/Apple Pie, and Trains, electric cars, are squishy European stuff" feeling. Green energy = hippies, latte sipping coastal elites, not real 'mericans who drive gas guzzling SUVs across the plains.

Crazy and kooky DARPA projects... like the internet?

Joking aside, some people on the right do complain, especially those with libertarian leanings. You are correct that mainstream politicians (in both parties) do not, they are in bed with these industries and you will never see anything but occasional feigned outrage over something absurd and irrelevant like a $300 toilet seat.

I actually think the question is, would Tesla have succeeded anyway? I think the answer is yes. The people buying them now are not people who could not afford them absent the tax incentives. Musk did all the right things, he was an established success story to start with, he started his company in California, home of large numbers of wealthy environmentally concerned people who will overlook practicality if they can make a fashion statement. On the other hand you don't see very many middle class people who can afford a Tesla even with the tax breaks, or whose needs in a car match what a Tesla offers.

Investments in companies like Solyndra failed because those companies would have failed anyway, they either had a bad business plan or were trying to enter markets that didn't really exist.

Regarding military waste- there are many conservatives who are just as upset about that. I don't think the media pays as much attention to it, for one reason or another, and thus it is not part of the day to day rhetoric.

Also, defense is also generally considered by conservatives to be the Federal Government's primary reason for existence. ("To provide for the common defense"). Spending a large percentage of the Federal budget on Defense initiatives therefore makes sense within this paradigm.

Lastly, there is a major problem in our society, both right and left, conservative and liberal, that believes that throwing money at any problem will automatically fix it. Is Education lagging? Spend more money on it! Need a next generation airplane and it isn't getting here fast enough? Throw some more money at it! Etc.

The purpose of the DoE isn't to invest to get monetary award, it's to invest to drive basic engineering forward. The government isn't as business and isn't supposed to derive a profit, that's the basic fallacy of the idea that the government's budget should reflect how CEOs run corporations.

Throwing money at research, science, and technology is pretty much how you get breakthroughs. As a said, there's no formula, breakthroughs are often serendipitous, unpredictable, and happen over long time scales.

I view technological advancements as exploring an infinitely large landscape of possibility. There are mountains of opportunity, but you don't know if a given mountain is worthwhile until you scale it, and you may fine nothing, or a local optima, in which you see a better mountain farther away. From the ground level, most of the mountains look the same, and the landscape is always shifting.

What is the best strategy for finding the successful mountains? Hire as many teams of climbers as possible and distribute them around the landscape far and wide. That's what capitalism is, that's what the startup economy is, it's lots and lots of people doing local hill climbing.

There are some mountains that are too big to climb, the gear is too expensive, and the time horizon to summit, too long. That's the government's role in basic R&D, to fund research and development at an early stage that is not economic, has little chance for ROI in the short or near term, stuff that even VC's won't touch.

Could any private company have built the GPS system all our phones used, if the government hadn't funded rocketry, satellites (most for military reasons?) You've talking from the 1950s until the 2000s when practical consumer GPS became a viable business. What company could have stomached 50 years of spending for ROI?

Much of the technology we have today is the result of government spending in the military, national labs, the space program, and state funded academic research. Often, the private companies are successful in taking the basic advancements and figuring out how to manufacture them, but it is usually the government that proved the basic design first.

"the meaning of all reform-movement, electing and electioneering, of popular agitation, parliamentary eloquence, and all political effort whatsoever, is that you may get the ten Ablest Men in England put to preside over your ten principal departments of affairs. "

Government isn't bad because it is government. Government is bad when it sets up systems with incentives built in to keep good men away, and to hamper the few that choose to join it anyway.

In this case, the stopped clock of government told its daily truth - it picked a winner.

[1] If Carlyle is too dense for you, Moldbug is his modern prophet

I don't know why you think it would be heretical to say this.

Government intervention in and of itself is neither good nor bad. It can be used well, and it can be used badly. But at the end of the day, it is just a tool.

In the case of emerging technology players going up against incumbents, the government should absolutely intervene and help the newcomers.

In the case of established markets such as agriculture, the government should stay the fuck away and refuse to subsidize anything.

I mean, seriously... when it comes to spending taxpayer money, the thought process should be purely pragmatic. We should think about the result we want to achieve, and then determine whether we need government intervention to achieve it.

Where do you draw the line on this? Should all newcomers be subsidized? Every YC startup that wants to enter the automobile sector should be federally subsidized? What about newcomers in other industries like healthcare, banking, and mining? Should those be subsidized too?

Wherever the elected officials want to. Generally it is a big hammer and is applied to sectors, so there is an expectation of low success rates. That is why the government is doing it, and not private investors. This time they supported the "green" technology sector through allowing companies to apply for low interest loans, and giving consumers tax credits for those items. The next elected administration / congress might try to encourage the airline industry with fewer fuel taxes, the clothing industry with import tariffs, or support USPS by taxing the internet. You never quite know what they might do, you just hope they don't do it for very long.

In the right place.

EDIT: HN really can't take a joke. Sigh

http://www.greentechmedia.com/articles/read/fact-checking-go...

So in this case, Tesla is one of the many many successes. The others you don't hear about because they're not suddenly disrupting consumer-facing businesses like car companies.

http://energy.gov/articles/moniz-tesla-repayment-shows-stren...

Petroleum and defense? Wall Street? Pork, regulatory capture, and lobbying are part and parcel of American business practice now. Government finagled with business, which does the same to government.

I suspect that you dislike as much of that as I do.

Ten years from now when people look back they will definitely say that the government played a critical role in Tesla's success. And that's a very good thing.

Where did the DOE say this?