Elon Musk: Crony Capitalist Hall of Shame Inductee–$4.9 BILLION of Your Tax $

 Want to be a billionaire? Just figure out how to get the government to give you the money for your ideas. No need to go to Well Fargo for a loan, who needs to sell bonds or stock for capital when you have government willing to give you billions.

“Tesla CEO Elon Musk has one very important supporter in his quest to build the future: the U.S. government, which has subsidized Musk’s companies with an estimated $4.9 billion.

Space X, Tesla Motors and SolarCity maintain a public-private financing model that relies on public funding for growth, according to a report out from the Los Angeles Times on Saturday. The paper based its estimates off a variety of government incentives, including grants, tax breaks, factory construction, discounted loans and environmental credits, in addition to tax credits and rebates to buyers of solar panels and electric cars.”

Crony capitalists take money from the poor and middle class, so they can become rich. The Left and the Right unite on this point—end the crony capitalists ownership—with unions—of government.

Tesla_logo

Elon Musk’s companies receive $4.9 billion in subsidies

Gina Hall, San Francvisco Business Journal, 6/1/15 

Tesla CEO Elon Musk has one very important supporter in his quest to build the future: the U.S. government, which has subsidized Musk’s companies with an estimated $4.9 billion.

Space X, Tesla Motors and SolarCity maintain a public-private financing model that relies on public funding for growth, according to a report out from the Los Angeles Times on Saturday. The paper based its estimates off a variety of government incentives, including grants, tax breaks, factory construction, discounted loans and environmental credits, in addition to tax credits and rebates to buyers of solar panels and electric cars.

So how much is the government paying for Musk’s business? Here’s a breakdown of some of the largest subsidies each company receives.

Tesla
Nevada doled out $1.3 billion in incentives to woo Tesla’s Gigafactory, which will build lithium-ion batteries outside of Reno. At first, Nevada was only willing to offer its usual package, up to $700 million in incentives, but it eventually upped the amount because of the 6,000 jobs the factory will create in the state.

The federal government gives Tesla buyers a $7,500 federal income tax credit, while California grants a $2,500 rebate. However, don’t expect the subsidies to last for long. The federal government capped the $7,500 credit at a total of 200,000 vehicles per manufacturer. The Palo Alto-based automaker has used 25 percent of that total.

California has pending legislation that could limit who receives its rebate, essentially cutting off the wealthy from taking advantage of the subsidy. The average Tesla buyer makes over $300,000 annually, per the report. So far Tesla buyers have received an estimated $284 million in federal tax incentives and collected more than $38 million in California rebates. The electric car company has also collected more than $517 million from competing automakers by selling environmental credits.

And as the company moves into energy storage with Tesla-branded batteries, expect Musk to look for more incentives. Tesla already solidified a $126 million commitment from California, which subsidizes companies developing energy storage technology.

SolarCity
New York state is building a $750 million solar panel factory in Buffalo for SolarCity, which the company will lease for $1 a year, per the Times. The San Mateo-based solar panel provider will not pay property taxes for a decade, which equals $260 million in savings. The 1.2-million-square-foot facility, which will be completed in 2017, will be the largest solar panel factory in the Western Hemisphere and should create 3,000 jobs.

For SolarCity customers, the federal government is providing grants or tax credits that will cover 30 percent of the cost of solar installations. SolarCity has already received $497.5 million in direct grants from the Treasury Department.

SpaceX
SpaceX received $20 million in economic development subsidies from Texas to build a launch facility in the state. Local governments contributed an additional $5 million to woo the company. Included in the local subsidies is a 15-year property tax break from a local school district worth $3.1 million, according to the report.

Musk’s stake in the firms is now worth $10 billion. Musk is the chief executive of both Tesla and SpaceX and the chairman of SolarCity. He holds a 27 percent stake in Tesla and a 23 percent stake in SolarCity. SpaceX is not a publicly traded company.

 

About Stephen Frank

Stephen Frank is the publisher and editor of California Political News and Views. He speaks all over California and appears as a guest on several radio shows each week. He has also served as a guest host on radio talk shows. He is a fulltime political consultant.

Comments

  1. There is a HUGE distinction between a company that uses the power of government to keep down competition, and one that has government as a customer. IF there is money available, a smart businessman would fight for it and avoid giving competitors an advantage they do not deserve.
    I would agree in most cases government should not be giving away public funds. Elon Musk is a case where the products are extremely valuable. His companies are not Solyndra. He deserves to be recognized for his many positive contributions.
    Obama cut the NASA program intended to replace the Shuttle. Now we are dependent on Russia to maintain access to ISS. SpaceX has Falcon9 boosters and Dragon cargo capsules regularly and reliably supplying ISS. The manned Dragon capsule design just passed its emergency abort test. Soon we will have independent access to ISS again, at a time when the Russian launch capabilities are increasingly in question.
    PowerWall will adapt the Tesla battery technology for home use. With economy of scale, we will be able to capture solar energy and use it any time of day. Moreover, with a whole-house system, you will be able to avoid huge new costs in electricity when time-of-use metering begins. Unless you want to do your cooking and laundry at 2am, your power bill will jump dramatically. The brilliance of the system is, we will double our power generation without building any new power plants. We can store electricity generated at a time of day when many power plants are warm, but not generating power.
    I’m not really in favor of these as solutions in the long run. Modern nuclear energy in the form of modular reactors that cannot melt down or are designed with a molten core, and virtually impervious to earthquakes are what we need. No more 60s nuclear technology. We need to move on to 21st century technology. A great comparison is TV technology. Shouldn’t we replace that ancient black and white mono analog hulk in the living room with a flat screen 4k HD with 7.1 stereo sound?
    Musk, as SpaceX, Tesla, etc., is not in the same category as GE, and other big companies using government to crush competition with laws and regulations favoring him and hindering others. Perhaps that’s how government works – get you hooked, make you dependent, and then they control you. Musk is no dummy. I hope he can avoid the trap.
    Personally, I think he’s one of the bright spots in an otherwise very bleak economy, a very depressing time. Musk deserves credit for what he’s built. Obama and the rest of that gang don’t want anyone to show they can be successful without their “help”.
    And wouldn’t it be great to build Hyperloop? Wouldn’t it be brilliant to embarrass old Uncle Jerry in Sacto? http://www.spacex.com/sites/spacex/files/hyperloop_alpha.pdf

  2. Shame on them and shame on the Government giving them OUR taxpaid money!

  3. Robert Poole says

    If it wasn’t for Tesla getting your tax dollars and all these cap and trade credits to sell to other companies they would collapse. Green cars cannot be produced and make it on their own. We have to subsidize our dollars for every one of them built. Time to stop this crap.

  4. This crap makes me sick, the corruption is so deep, so we’ll entrenched only a full blown revolution will serve to pull the county ou,t from the depths of corruption and government abuse.

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  1. […] Tesla CEO Elton Musk has one very important supporter in his quest to build the future: the U.S. government, which has subsidized Musk’s companies with an estimated $4.9 billion. ~Steve Frank […]

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