Slashdot Mirror
How Elon Musk's Growing Empire is Fueled By Government Subsidies
theodp writes: By the Los Angeles Times' reckoning, Elon Musk's Tesla Motors, SolarCity, and SpaceX together have benefited from an estimated $4.9 billion in government support. The figure compiled by The Times, explains reporter Jerry Hirsch, comprises a variety of government incentives, including grants, tax breaks, factory construction, discounted loans and environmental credits that Tesla can sell. It also includes tax credits and rebates to buyers of solar panels and electric cars. "He definitely goes where there is government money," said an equity research analyst. "Musk and his companies' investors enjoy most of the financial upside of the government support, while taxpayers shoulder the cost," Hirsch adds. "The payoff for the public would come in the form of major pollution reductions, but only if solar panels and electric cars break through as viable mass-market products. For now, both remain niche products for mostly well-heeled customers." And as Musk moves into a new industry — battery-based home energy storage — Hirsch notes Tesla has already secured a commitment of $126 million in California subsidies to companies developing energy storage technology.
do the exact same thing when conservatives favored companies do this. ... unless you are looking at it solely with political partisan hatred
Not a big deal
If the people pass laws to promote businesses investing in developing new capabilities (e.g. space flight) then we WANT companies to do that work and thus get those grants, tax breaks, etc. That's how the airline industry got launched in the US, for example - huge government subsidies (airports, air traffic control system) and contracts (for mail delivery) that jump started the US airline industry, which was IMO a brilliant investment, because transportation doesn't just benefit the company providing transportation, it benefits everyone who uses transportation. Highways were another brilliant investment, funding construction companies and thus jobs, and creating a national road system that everyone benefits from.
The subsidies/grants/tax breaks that I object to are the ones that go to mature, profitable industries that don't need any support because they should be able to survive on their own. Oil companies and sports teams are just the most blatant examples. Agri-business corporations don't need subsidies, either - the farming grants should be reserved for the few percent of farmers who are independent, small family farms, and right now the money all goes to huge, profitable corporations that have huge resources and don't need the money, and relatively little to the small farms that need the support to survive the ups-and-downs of farming.
Enable 3D printed prosthetics!
In a 2008 blog post, Musk laid out a plan: After the sports car, Tesla would produce a sedan costing "half the $89k price point of the Tesla Roadster and the third model will be even more affordable."
In fact, the second model now typically sells for $100,000, and the much-delayed third model, the Model X sport utility, is expected to sell for a similar price. Timing on a less expensive model — maybe $35,000 or $40,000, after subsidies — remains uncertain.
The Roaster cost more than $89k. That was the value without subsidies. The article is comparing the price of the cheapest model of the Roaster (with subsidies) to the price of the most expensive Model S (without subsidies). Well DUH.
The Model X isn't the third model Musk was talking about. The third model SEDAN is supposedly to be called the Model 3 and unlike what the author said it's planned to be launch in 2017. YMMW. They need the battery factory to be finished so they'll have batteries cheap enough for the Model 3.
OK, I bet there is an image of a crowd of thousands of men with their lunch pails all walking into their shift at the plant who then jump on the line and build cars.
No.
At best it's a couple of dozen people working in the back office and some techs to walk around and monitor the automated plant.
Tesla has 6000 employees
But go ahead and keep undermining your arguments with such unnecessary hyperbole, mister Anonymous Coward.
I'm a leaf on the wind. Watch how I soar.
At best it's a couple of dozen people working in the back office and some techs to walk around and monitor the automated plant.
A quick look at Wikipedia says Tesla had 10,000 employees in November of 2014 and SpaceX had 3,500 employees in April of 2015.
You didn't even bother with that much fact checking about what you 'know', though, did you. Your entire post is a demonstration of idiocy in action.
SourceForge, the code repository site owned by Slashdot Media, has apparently seized control of the account hosting GIMP for Windows on the service, according to e-mails and discussions amongst members of the GIMP community—locking out GIMP's lead Windows developer. And now anyone downloading the Windows version of the open source image editing tool from SourceForge gets the software wrapped in an installer replete with advertisements.
Link to original source
The GIMP developers aren't happy at all about this. They say that Sourceforge impersonated the GIMP developers, and abused the trademarks owned by the GNOME foundation
Also, much less than the incentives oil companies get. They buy a scarce resource (crude oil reserves) from the government for a fixed cost, instead of a "percentage of sales to customers" cost (as it would certainly happen if the government acted as a seller looking after the bottom line). But this scheme is so well hidden most people have no idea it even exists.
A tax break is considered a subsidy in all international trade agreements.
How funny.
Tesla employed over 6000 full-time last sept. That does not include ppl working on gigafactory.My guess is that with model X gearing up that it will jump to 10,000 by Jan.
Solar city employs full time over 8000 as of Dec, 2014. And they doubled last year They are still hiring like mad. Again, that does not include those working on the new 1gw/year solar plantS. On a side note , it turns out that solar employs more ppl than coal.
spacex employed more than 3000 last summer when they cleaned house of 150. In addition, they said that they would be at 3600 by 2015.
So, musk employs conservatily, 25,000 ppl and it is growing very fast. OTOH, the fossil fuel industry is subsidized more than 8b PER year in America. In fact, we pay 1 B / year to cover coal miners health. I would suggest that we look to kill a number of subsidies, esp in the fossil fuel arena.
I prefer the "u" in honour as it seems to be missing these days.
$4.9 billion? That's nothing compared to the Koch brothers. They got more than twice that amount.
XML is like violence. If it doesn't solve your problem, you're not using enough of it. --AC
If only the Middle East were our main source of oil... it isn't.* And even with the shift to electric vehicles and solar power, petrochemicals are still vitally important industrial feedstocks, and thus a stable Middle East is still of prime economic interest to the West.
Money is fungible, but the word "subsidy" does imply a flow of government to someone. Tax break is the proper term to use unless you are deliberately trying to mislead people. See also "corporate welfare".
I've commented on this before in other threads. There's a (rather disturbing IMHO) school of thought that thinks government is the ultimate economic engine. Thus any money the government doesn't collect is equivalent to subsidy.
Only two things are infinite, the universe and human stupidity, and I'm not entirely sure about the universe - Einstein
So all of Elon's companies get $5b in subsidies? The oil industry in the US get $37.5 billion in subsidies a year, including $21 billion for production and exploration. That's a far worse proposition for this country.
----- obSig
That bottom 50% not paying anything in taxes is understandable if you look at the amount of wealth it represents in this country.
Graph here:
http://www2.ucsc.edu/whorulesa...
"It is widely believed that taxes are highly progressive and, furthermore, that the top several percent of income earners pay most of the taxes received by the federal government. Both ideas are wrong because they focus on official, rather than "effective" tax rates and ignore payroll taxes, which are mostly paid by those with incomes below $100,000 per year."
http://www2.ucsc.edu/whorulesa...
Wealth, Income, and Power
by G. William Domhoff
Do Taxes Redistribute Income?
Adam Smith, who wrote Wealth of Nations, said that those who have benefited more from society should pay a greater proportion of their income for the costs of running that society. In other words, Smith advocated progressive taxes.
Right now, in America, the bottom 50% pay NOTHING in the federal taxes.
I don't know much about America, probably just borrows or prints money to make up for tax shortages. In Canada the way it works is we get low income taxes but the governments , both federal and provincial, make up the tax shortages by having large other taxes and fees, eg gas tax, unemployment payments, pension plan payments and numerous fees that are mostly capped so someone making $70,000 and someone making anything higher pays the same and all the excess money brought in goes into general revenue (and unemployment benefits have been clawed right back even with the huge surplus). It actually works out to the poor paying a larger percent of their income to the government then the wealthy when federal and provincial government taxes/fees are taken into account, at least here in BC.
https://en.wikipedia.org/wiki/Inverted_totalitarianism