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http://www.latimes.com/business/la-fi-hy-musk-subsidies-20150531-story.html#page=1
I love Elon Musk as much as the next guy but sometimes, some of my libertarian friends are so insufferable when it comes to him. They are always 'why let the government do this when Elon Musk can do it with newer tech', etc. It is especially insufferable when it comes to the hyperloop and the California High Speed rail. Actually, I see it on GAF all the time too.
edit: Just to be clear, I think what Musk is doing is fantastic, and what the government is doing in investing with him is great. Great use of government funds and more should be poured in his general direction and others like it.
Los Angeles entrepreneur Elon Musk has built a multibillion-dollar fortune running companies that make electric cars, sell solar panels and launch rockets into space.
And he's built those companies with the help of billions in government subsidies.
Tesla Motors Inc., SolarCity Corp. and Space Exploration Technologies Corp., known as SpaceX, together have benefited from an estimated $4.9 billion in government support, according to data compiled by The Times. The figure underscores a common theme running through his emerging empire: a public-private financing model underpinning long-shot start-ups.
"He definitely goes where there is government money," said Dan Dolev, an analyst at Jefferies Equity Research. "That's a great strategy, but the government will cut you off one day."
The figure compiled by The Times 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.
A looming question is whether the companies are moving toward self-sufficiency — as Dolev believes — and whether they can slash development costs before the public largesse ends.
Tesla and SolarCity continue to report net losses after a decade in business, but the stocks of both companies have soared on their potential; Musk's stake in the firms alone is worth about $10 billion. (SpaceX, a private company, does not publicly report financial performance.)
Musk and his companies' investors enjoy most of the financial upside of the government support, while taxpayers shoulder the cost.
New York state is spending $750 million to build a solar panel factory in Buffalo for SolarCity. The San Mateo, Calif.-based company will lease the plant for $1 a year. It will not pay property taxes for a decade, which would otherwise total an estimated $260 million.
The federal government also provides grants or tax credits to cover 30% of the cost of solar installations. SolarCity reported receiving $497.5 million in direct grants from the Treasury Department.
Elon Musk's companies benefit from subsidies
SpaceX, Elon Musk’s rocket company, cut a deal for about $20 million in subsidies from Texas to build a launch facility there. (Brian van der Brug, Los Angeles Times)
That figure, however, doesn't capture the full value of the government's support.
Since 2006, SolarCity has installed systems for 217,595 customers, according to a corporate filing. If each paid the current average price for a residential system — about $23,000, according to the Union of Concerned Scientists — the cost to the government would total about $1.5 billion, which would include the Treasury grants paid to SolarCity.
Nevada has agreed to provide Tesla with $1.3 billion in incentives to help build a massive battery factory near Reno.
The Palo Alto company has also collected more than $517 million from competing automakers by selling environmental credits. In a regulatory system pioneered by California and adopted by nine other states, automakers must buy the credits if they fail to sell enough zero-emissions cars to meet mandates. The tally also includes some federal environmental credits.
I love Elon Musk as much as the next guy but sometimes, some of my libertarian friends are so insufferable when it comes to him. They are always 'why let the government do this when Elon Musk can do it with newer tech', etc. It is especially insufferable when it comes to the hyperloop and the California High Speed rail. Actually, I see it on GAF all the time too.
edit: Just to be clear, I think what Musk is doing is fantastic, and what the government is doing in investing with him is great. Great use of government funds and more should be poured in his general direction and others like it.