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How Does Musk's Government Funding Compare To Competitors?
Rei writes: We recently discussed an article in the LA Times complaining about how Elon Musk has built his corporate empires — Solar City, Tesla Motors and SpaceX — on the back of government subsidies. However, how does the funding compare in context to various competitors? USC professor Greg Autry breaks it down, noting among other things that SpaceX's competitors have benefited from decades of tremendous government money and a launch monopoly, while the Volt receives — on a percentage basis — 2 1/2 times greater subsidy than a Model S, and was developed on the government's dime.
Does anyone really give a fucking shit about every little thing Elon Musk does? Is the media really so determined to manufacture a new Steve Jobs?
And are we really at the point of calling Solar City, Tesla Motors, and SpaceX "corporate empires"?
Sure, he has no clothes himself, but being naked is a sign of status.
while the Volt receives — on a percentage basis — 2 1/2 times greater subsidy than a Model S, and was developed on the government's dime.
Maybe that is because a Model S costs 2.4 times that of a Volt. On a per vehicle basis they are almost the same.
Elon Musk has alot of fans and fanboys. Government helped him out thats cool better then all those start-up's and solar turds that died that took all that money 4 years ago. but i think people would like musks cars and ideas if they where more practical to more people. most his cars wont see mass usage for along time. they are cool and they make for good youtube videos and car magazine reads. but intill tesla has a car that will travel long range its just a toy for someone with a bmw or benz all ready siting in garage . i dont see the cheaper model 3 being any better ..seeing how used volts sell for 11k-16k . tesla isnt bad just its not for travelers or common people ..its a apple watch with wheels
No one cares how he compares to competition. There are two broad groups of people on this:
1) People think it's fine for the government to subsidize some industry.
2) People who think the government should not subsidize industry.
The people in group #1 think it's good that the Tesla and Volt got government funding. The people in group #2 oppose funding of both Tesla and Volt. So a study like this will change no one's opinion (and from the author's writing, it is clear that is what he's trying to do).
"First they came for the slanderers and i said nothing."
.
For instance, General Electric is always whining about taxes, yet pays a small percentage of revenue in taxes. It's an example of a corporation that is focused on taking, not giving.
So if you want to complain about excessive government subsidies, don't just look at one industry.
You can read the whole article (and you should), but here are some nice excerpts.
FTA: On the electric car front, the Chevy Volt is the most significant U.S. competitor to Musk's Tesla Model S...
Meanwhile, Volt was developed during Uncle Sam's bailout of "Government Motors" with $30 billion. That's more than six times the number that got Mr. Hirsch so worked up! Though GM touts that they've "repaid" the government, Treasury reports that the government lost more than $11 billion on that dubious deal.
The Model S is not comparable to the Volt. The Volt is a plug-in hybrid (not an EV) cludge to meet the requirements of a bail out. The Nissan Leaf is a better comparison and it blows the Model S out of the water in its effects on the market. But, the author wants to hamstring a stronger comparison by requiring that the company be American.
Additionally, a bail out deal and subsidy are not comparable. A bail out deal your mom throwing you a few hundred bucks because your business failed, rent needs to be paid, and you have to go visit her to pick up the check. A subsidy is your mom throwing you a few hundred bucks to start up or expand your business. One's there to save your as with some nominal requirements and the other is there to help you profit. Musk has taken both for Tesla.
FTA: The most polite response I can offer to the critics is: Get over it. Find something more productive to do than condemning success. If you insist on continuing to carp, do your research first and hit the right targets. Otherwise you will continue to sound jealous and misinformed.
Wow, internet tough guy, huh?
Oh, and this isn't the only time this guy has white-knighted for Musk. He's actually a bit of a fanboy, so don't let his professorship lull you into a false sense of academic separation:
http://www.huffingtonpost.com/... "Disclosure: Dr. Autry currently owns Tesla stock."
https://twitter.com/gregwautry
https://www.facebook.com/gregw...
http://www.forbes.com/sites/re...
I'm getting a little sick of the slovenly Musk worship on this site. It's worse than the way 99% of Slashdotters used to drop to their knees anytime Steve Jobs whipped his dick out. Like Jobs, Musk could take a shit on stage and most of your pathetic fanboys would be fighting each other for the privilege to touch it.
SJW's don't eliminate discrimination. They just expropriate it for themselves.
Musk is a poster child for the cronyism that has marked these sad, low growth Obama years. Musk's 'commercial space' is the same as old space, except he had political allies at NASA whom he was able to talk out of owning the rockets that they purchased.
The reason we use government funding to incentivize things is because we as a public want people to do/build/invent/fix those things and are willing to pay for that to happen.
So Elon Musk comes along and says he will and then he does. And then we pay him what, as a public, we planned to pay (via those incentives) to whoever did them.
Seems like everything is going according to plan, for all involved, and that we're lucky enough to have found something of a one-stop-shop for incentivized work that few others are willing to take on, but that seems to really move the needle on tech progress for something other than consumer electronics gadgets.
Win/win all around. Smells like right wing paranoia and demagoguery to me in here.
STOP . AMERICA . NOW
I see a lot of people reacting as if all funding is just a governement subsidy, but if the government is paying you to launch something into space for them, that is not a subsidy. A subsidy is when the government pays money either to the company or the consumer to reduce the price of an item.
Therein lies the problem. A comparison of lavish subsidies among various companies rather than responsible subsidies with some strings attached. Currently massive amounts of tax payer dollars are hemorrhaging from capitol hill.
You cannot lay the $11B lost by the government at GM's feet.
GM underwent a debt-for-equity swap. This happens when the debt holders feel the company would be better off with less debt and if they convert the debt to equity (ownership) they can share in that improvement.
Once the debt-for-equity swap occurs, it is on the shareholder to decide whether to hold to break even (or make money) or to liquidate the equity at a loss. The government decided for political reasons to take the loss. If the government had held longer they would have made money instead of losing it. But does this mean it is GM's fault that the government lost money? No, not any more that it is Apple's fault if you sold their stock before it went up.
Ford also had huge debt and executed a debt-for-equity swap during this period.
Say... if this guy is so against condemning success why is he condemning the Volt? How can he tell others to be above dishing out criticism while banging the drum himself?
http://lkml.org/lkml/2005/8/20/95
Envy is pathetic. The government offers incentives and leftists bitch because someone is smart enough and driven enough to capture those subsidies for his own ends. The answer is simple, remove the subsidies. Do that, and I'm pretty sure Mr Musk or others like him from of the productive classes will adapt and find some other way to achieve their vision. If space X can achieve its goals of cost to launch a pound into orbit, society will have been greatly advanced in ways that Nasa has failed to accomplish after 50 years and untold billions spent.
But we also have voting, and the voting public chooses leadership, often in part on the basis of precisely the use of policy to incentivize behavior with government funds. Tax breaks for specific kinds of behavior being the most common of these.
This gives the public two ways to encourage people ot do/build/invent/fix things; one for individual choices, and one for collective goods, presumably (though people don't often think in these ways) to avoid tragedy-of-the-commons situations.
You were never asked per se, but you are a member of said voting public if you're complaining that Musk is being supported by you tax dollars. In such cases, you may or may not have a beef, but we're beyond complaining about Elon Musk there and into the basic tensions of democratic governance, which really isn't all about whether Musk is a good guy or a bad guy, but about whether you like collective goods or not, and if so, what system you prefer for choosing them.
That's political science, political philosophy, and/or the fringe of sociology, but has little to do (once again) with this particular article.
STOP . AMERICA . NOW