Tesla Kerfuffle Of The Week: Jay Leno Questions 'Attacks' (And A Brief History Of Tesla's Origins)

Jay Leno made innocuous comments about Tesla Motors this week but it was enough to get under the skin of a columnist at the Wall Street Journal.

Leno's comments surfaced on CNBC's Mad Money with Jim Cramer. "I don't understand why people attack this car. It is made in America, by Americans. It is built local. You know we are becoming like the British — we like noble failures more than we reward success," Leno said to the Mad Money host.

Those utterly harmless comments (which Leno has also made in the past) were enough to annoy an old-style (read: last century) free market/free trade columnist who, of course, couldn't resist the old the-American-taxpayer-is-getting-screwed argument. (See: "Hey, Jay Leno, What About Tesla’s Dependence on the Taxpayer?"*)

The problem is, there's no such thing as free-market capitalism on the world stage (where all American companies must compete) or anything close to it. Toyota, for example, is getting gobs of Japanese government largesse and support for its hydrogen fuel cell cars (among other things) which the company, in turn, uses to underwrite sales in the U.S.

But getting back to the "attack" on Tesla. The company had what they call in the political world a "bad week" (actually, a bad month). Fodder for the attack includes the hubbub about the "Goodwill Agreement," Model X quality issues, and uncertainty about Tesla's ability to manufacture the high-volume Model 3.

Feeding all of this is the insidious effect of U.S. government support, according to the WSJ piece. The author cites examples like the Nevada Gigafactory and aid from the Nevada government. "The real question isn’t whether Mr. Musk is enterprising and innovative, but whether government’s excessive interest has so distorted his decision-making that it’s leading his company to disaster," the piece said.

I'll leave it to readers to agree or disagree. My post isn't meant as a long rebuttal to that argument. But let's set one thing straight. Listening to Elon Musk describe Tesla's initial struggles during the recent shareholder meeting, it hardly sounds like a company born of government largesse. Particularly the do-or-die meeting with Daimler executives (audio cited at bottom). "A lot of people think Tesla was bailed out by the federal government," Musk said at the meeting. "This is not true. We were bailed out -- but by Daimler, not by the government. Tesla wouldn't be around if they (Daimler) hadn't helped out...There are some people out there that constantly beat us over the head about the DOE loans," Musk said. The government loans (which Tesla paid back with interest) came mostly in dribs and drabs after "Tesla was out of the danger zone." And the DOE loans were not "fundamentally essential" for Tesla's survival, according to Musk. (And note that those U.S. government loans even when to Japanese carmaker Nissan, to the tune $1.45 billion. Go figure.)

*Note to the WSJ writer about the IPO: it was Daimler's $50 million, before the IPO, that saved Tesla, not Toyota and not the U.S. government loan, according to Elon Musk. See 01:22 mark of Tesla Motors 2016 Annual Shareholder Meeting.