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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.
Employing mainly Americans, manufacturing in America.
They forgot the benefit that it gets us out of the Middle East. That sandtrap is a massive waste of resources that I hate is being subsidized.
So we have a brilliant industrialist creating new pathways that we will all benefit from. In this case I hope the government gives him even more money. We need these technologies and a support system to actually conquer some of the issues that now confront us.
Big companies get subsidies in the form of tax breaks all the time.
They bitch about taxes, get a deal, then they bitch because the schools aren't churning out worker robots with the necessary skills- schools that would be funded by the taxes the big corps aren't paying.
We want him to succeed. That's why those incentives exist.
If you want to complain about government largess to corporate America, there is no shortage of other, far more dubious, targets...
The oil industry periodically requires wars to secure its supplies, and a lot of its profits accrue to countries with interests inimical to those of the U.S. To give you an idea, Operation Desert Storm cost $104 billion in nominal 2014 dollars. From a strictly cost/benefit perspective, the U.S. is underfunding these companies.
Stop learning! Only you can prevent esoterrorism.
Loans that were fully paid back (e.g. the one Tesla got). Space launches for the government that are *cheaper* than the other launch services the government is using. You can't call it a subsidy when they are selling the government a service.
Most of the other clean tax subsidies are given to the clients (e.g. SolarCity, Tesla) not to Musk's companies directly. If they are that rich, as the author claims they are, I think they would still buy the cars to make a kind of fashion statement even if there was no tax break at all.
As for the tax breaks he gets for building that factory its no different from what any other company doing a similar activity would get. Yes I know its crap but its the world goes.
Rather spending that type of money on the bazillions pointless DOD contract where it doens't trickle down but simply trickles away, it goes to a guy and his various crews that actually get shit done. And manufactures mostly domestically. I don't see a problem here.
We suffer more in our imagination than in reality. - Seneca
I'm sure they did.
And the evidence is that they were right, by the by. Note that sans railroads, the USA would probably be five or six nations now. Running a nation that requires literally months to cross isn't practical....
"I do not agree with what you say, but I will defend to the death your right to say it"
Those tax breaks and subsidies were set up to encourage advancement in those areas by offering an economic incentive. Musk just did exactly what the government was handing out money for people to do... advance those areas.
while(1) attack(People.Sandy);
Yeah, right. Installation is done in India, right?
Meanwhile, What about Microsoft? Exxon? All foreign workers employed, taxes avoided and shit like that?
With trillions a year paid in to help the fossil fuel industries and fuck all employement in the USA from it, this isn't worth noting.
But some non-fossil fuel help for an industry that environmentalists support and that's sufficient for you to come out with the hate.
Compared to the shenanigans of the coal and oil businesses, even if it is true, this 5 billion is nothing. But most likely it is a hit piece commissioned by the same people who brought you the Iraq war. That one was expansion attempt. Now they are defending the home turf, public utilities using gas and coal. Entrenched monopolies who have never faced competition, lightly regulated by revolving door politicians, lobbyists and company men.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
Lobbying used to be called bribery. Just because there's a few strings attached doesn't make it any difference in actual practice.
Get free satoshi (Bitcoin) and Dogecoins
And that comes to what, over $360,000 per employee?
Here is the problem. Most of this subsidy money is not given to anyone or any companies. It is a waiver of future costs that wouldn't likely be collected anyways. Some is in the format of direct payment but those are generally to share the costs of getting people and companies to do what they wouldn't do already. So its pointless to really argue about it outside of whether we want someone or companies to act in certain ways while remaining free people.
Subsidies are policy implementation devices. When people take the subsidies under the condition the subsidies are offered the result is that something the government wants to happen happens. Theoretically its an inexpensive way to get things done without the government doing it and assuring private investment in the outcome. (so there's vested interest in successes and usually commercialization).
Just because one guy happens to feed at the trough isn't a problem neccessarily. It could be. But that's why you have oversight.
Some drink at the fountain of knowledge. Others just gargle.
Another way to descript this would be:
Elon Musk structures his businesses to support government priorities.
The real "Libtards" are the Libertarians!
And this is a problem how? Don't those subsidies exist precisely to encourage the development of these sorts of technologies? The government (and theoretically, by extension: the people) decided that to encourage the development of greener technologies and/or space technologies, they would provide various bits of assistance to companies, as well as consumers buying into said technologies. Musk appears to be successful in developing these technologies. Now people are complaining that he got government subsidies? Bah. We, the people get the benefit of these new emerging technologies, and Musk gets to make some money doing it so that these emerging technologies exist. Win-win scenario. The subsidies will go away at some point as the technologies become more mainstream.
...he fossil fuel industry is subsidized more than 8b PER year in America...
Not to mention that the Internet was started by the government. And companies like Lockheed Martin rely almost completely on government military subsidies. This article was a hit piece. The American media really is shockingly corrupt.
This and no other is the root from which a tyrant springs; when first he appears as a protector - Plato (423 to 327 BC)
It's even sillier than that ... "[the figure] also includes tax credits and rebates to buyers of solar panels and electric cars" ... in other words "subsidies" given not even to Musk/companies, but to customers.
"Quite frankly, government subsidies for these are a waste until the fundamentals line up."
Are you suggesting that the government should only be subsidizing mature industries?
I am not a fan of any subsidies . . . especially for mature industries. If the economics do not line up for a mature industry then the industry creates a net economic drag on the economy and should not be subsidized.
The entire point of a subsidy should be to test and support the viability of new ideas that have the potential to create large economic benefits in the future. Instead what we have is a 100 years of subsidies for a handful of companies while pointing the finger at peanuts that should fundamentally change the world if allowed to compete on a level playing field.
-rd
Having rich and poor is an inevitable feature of any civilization that has ever existed or ever will exist. The societies that try to eliminate it (namely, communists) end up destabilizing quickly.
You mean, like Canada, that slum-ridden cesspit to the North?
Try dialing down the dogma a fraction, and accept that there are reasonable compromises that provide reasonable mitigation to the worst aspects of any economic system. You might find that it is indeed possible for sober public investment in private enterprise not only to work, but to work well. There's a whole sub-discipline in economics devoted to the study of it. Yes, there are downsides to Public/Private Partnerships (it even has a name!!), but with the proper checks, they can sometimes work better than either a purely public or a purely private undertaking.
Crumb's Corollary: Never bring a knife to a bun fight.
and they go out of their way to hire veterans: http://www.military.com/vetera...
And they doing their best to insure that most of the battery production in the world will be done in the U.S. in the future: http://www.teslamotors.com/gig...
And oh by the way they are the future of the car industry... and perhaps getting the U.S. energy independent in a sustainable way...
But yah, let's bitch about giving them tax breaks... because we need to save those for more worthy industries (sarcasm).
Pat