Slashdot Mirror
Can Elon Musk Be Weaned Off Government Support? (thehill.com)
mi shares an opinion piece written by Jenny Beth Martin via The Hill: A study published in 2015 by The Los Angeles Times revealed that just three of Musk's ventures -- SolarCity Corp. (which manufactured and installed solar energy systems before its 2016 merger with Tesla Motors Inc.), Tesla Motors Inc. (which manufactures electric vehicles), and Space Exploration Technologies Corp., known as SpaceX (which builds rocket ships) -- had received $4.9 billion in government subsidies to that point in time. By now, Musk's various ventures have sucked well over $5 billion from government coffers. Worse: in order to induce car buyers to spend their money on electric vehicles, the federal government offers a $7,500 rebate on the purchase price. Some states enhance that rebate with rebates of their own. In California, for instance, purchasers of electric vehicles get a state-funded rebate of $2,500 more.
Slashdot reader mi asks: "Why are you and I subsidizing Elon Musk's products and when will his businesses be able to compete on their own?"
Slashdot reader mi asks: "Why are you and I subsidizing Elon Musk's products and when will his businesses be able to compete on their own?"
lol
Tesla does not receive subsidies apart from zero-emission credits. Tesla's _customers_ receive them ($7500 federal tax rebate) until Tesla sells 100000 cars. Other automakers also receive them - I claimed it for my Chevy Volt, for example. And Tesla is going to do just fine without it.
For SpaceX it's even more disingenuous - they counted governmental launch contracts as "subsidies".
ULA, a competitor to SX, gets 1B / year subsidy. Boeing recently got 4B to develop a human rated space craft and fly it 3x. SX got less than 3B for doing it AND flying it 6x. SX continues to under bid all other rocket launchers for NASA, and the DOD while having 2/3 to 3/4 of their flights be commercial work, not gov.
.5B loan that they paid off early. In addition, customers get 7500 / EV that Tesla sells. .25/gal MINIMUM.
So very little subsidy for SX, and massive ones for its competitors.
Tesla got a
GM, Ford, and Chrysler were bailed out by the gov partially with payoffs and partially with loans that STILL ARE NOT PAID OFF. All of the cars sold in America get 7500 for being hybrid or EV. In addition, back in 2008, America bought a large number of used cars to subsidize car sales for Ford, GM, and Chrysler. So, very little to no subsidy on Tesla's part, but HUGE ones for its competitors.
Oil companies and coal are MASSIVELY subsidized. Worse yet, ICE vehicles are not paying anywhere close to what it takes to maintain the roads. We need to increase taxes on diesel and gas by another
Then we have solar city. CONgress continues to push subsidies for Solar. Yet, SC has the LOWEST costs in America and are about to go even lower later this year.
To read idiots that claim that Musk is living on subsidies is just a FUD POS from kock bros and other idiot far right wingies.
I prefer the "u" in honour as it seems to be missing these days.
All car companies can access the subsidies for electric cars. You can say Elon benefits more since he's only building electric cars, most of the big automakers have only been building half-assed compliance cars. Because Elon didn't start out with a huge car company he couldn't start out building a cheap car because it takes an enormous amount of money to develop a vehicle and everything needed to build it. Roadster proved an electric car can be interesting. Model S & X was needed to help scale up and develop the next thing. Model 3 is not *cheap* but it's getting closer to what the "average person" can afford. I suspect whatever follows Model Y will be even more accessible. He needed the Gigafactory battery plant to help push the cost of batteries down faster.
The article saying the same about SpaceX is pretty fuzzy if you're talking about subsidies. NASA contracted companies to ship cargo and (soon) people to the space station rather than developing it in house. The original commercial cargo contract was helpful for developing SpaceX's commercial satellite launch business. If it weren't for the Commercial Cargo & Commercial Crew programs, all the US ISS launch business would have gone to ULA's even more expensive rockets and Russia for expensive rides to the space station.
This is one of the dumbest articles I've ever seen on Slashdot, and that's saying a lot.
1) SpaceX has been saving the US government a huge amount of money versus its formerly monopolistic competitor, ULA, which even still gets paid even when it doesn't launch anything. SpaceX charges a tiny fraction as much per launch as ULA does, and this before they get to widespread rocket reuse.
2) The federal EV credits were basically designed by GM, for the Volt. The credit is per-kWh and maxes out precisely at the pack capacity of the Volt (gee, what are the odds of that?). Furthermore, it expires on a per-manufacturer basis. This has the perverse effect that manufacturers of popular EVs - such as Tesla - get no credits (Tesla's phaseout starts next year), but their competitors who make less popular EVs will continue to be subsidized for years to come.
3) Tesla's reservations are in place despite the fact that its US customers know that most of them will be getting a partially-phased-out credit if any at all. That's because even without credits and without accounting for savings in energy and maintenance costs, the Model 3 outcompetes other vehicles in its class (BMW 3-Series, Audi A4, etc) on performance and features for its price point.
(Cue the Slashdotters rushing to pretend that there's no difference between standard features and performance in a midrange sedan and, say, a base-model Yaris. Because that's what these conversations usually devolve to ;) )
4) Tesla Motors did get - like the Big Three - government loans during the auto bailout. But unlike some of the Big Three, they paid theirs back 100% with interest - and more to the point, years before they were due.
In large part, the subsidies that affect Tesla's products have had the perverse effect of hurting the company, giving them artificially supported competition. Musk frequently complains about them.
He's really very... gentle... and fuzzy. We're becoming fast friends.
So what?
The 5 richest people in the US (the Waltons, owners of Walmart), get 17% of every food stamp dollar
Government aid to Farmers will be $23+ billion in 2017
When Dick Cheney, the former CEO of Halliburton, convinced "W" to start a war in Iraq, Halliburton was awarded $8B in no bid contracts
The oligarchy in the country have always enriched themselves with "the peoples money" - how do you think they got there?
While California wanted more low-emission and zero-emission cars they didn't want to force manufacturers to make them. Therefore manufacturers who didn't meet requirements for percentages of low/zero emission vehicles are allowed to purchase credits from manufacturers (like Tesla) who exceeded the government's requirements so that the manufacturer doesn't need to pay a penalty.
Because there is a free market for these credits the price varies, and the price is thus set by the supply and demand. Because of the slow ramp up of CA's emissions requirements the price is currently below what the cost of the penalty would be for a manufacturer to fail to meet the requirements (or buy credits).
To your first point, does the government save more than they pay out in subsidies or tax credits?
The US federal government gives neither tax credits nor subsidies for rockets. They buy launch services. There's a bunch of laws requiring it. A ULA launch costs $480 million. A SpaceX launch costs $62 million. Subtract the latter from the former and that's the straight up savings. SpaceX has already launched one national security payload, saving the US government in the form of the NRO hundreds of millions of dollars.
If you're asking about saving money with SpaceX vs spending tax credits with Tesla, ultimately yes, the government will save money. As the post you replied to pointed out, Teslas will be ineligible for the federal tax credit very soon. Projections were Tesla would hit the ceiling late this year, with Model 3 production. If not, they'll definitely hit it next year. After that, no more tax credits for Tesla vehicle purchases in the US. Meanwhile, SpaceX will continue saving hundreds of millions of dollars with every single launch the government buys.
NASA has booked no less than 26 resupply launches to the International Space Station with SpaceX. Every single one of those launches saves a fortune in tax money. Next year, NASA's contract with Russia for Soyuz launches of American astronauts to the ISS runs out. SpaceX is pushing hard to finish the Commercial Crew NASA contract, which would get them certified to take over from Russia late next year. That won't save quite as much money: Soyuz launches cost NASA $81.6 million per seat for six launches in three years. SpaceX will probably come in under that, but not by much. More importantly, that money will go to an American company with American employees, instead of a Russian "company".
More abstractly, the existence of Tesla is making electric cars a reality. The usual suspects can no longer lie to Congress and say it's impossible for them to build a product acceptable to consumers because there's now a company doing it. Electric cars reduce emissions, move emissions, and change the nature of emissions. Rather than hundreds of millions of vehicles spewing toxic fumes from gasoline combustion at ground level everywhere people live, we'll have merely thousands of power plants spewing toxic fumes from coal combustion hundreds of feet into the air far outside of cities. It's not a great win (yet), but it's still a win. The net result will be fewer lung disorders Medicaid has to pay for, saving the government money.
The Medicaid savings are a lot harder to quantify. Easier to just point to the rocket launch savings, which will add up to many many billions over time. Still, there will be more than just rocket launch savings from Elon Musk companies.