Quoted: Elon Musk on government subsidies for Tesla, SolarCity, SpaceX

“(Incentives) tend to be characterized as either absolutely necessary or absolutely unnecessary. Both of those positions are false.”

Elon Musk, Tesla CEO, calls a Los Angeles Times article about his use of government subsidies “misleading and deceptive.” In a phone interview Monday on CNBC’s “Power Lunch,” Musk took issue with the LAT’s reporting that Musk has built his “empire” — Tesla, SolarCity (where he’s chairman) and SpaceX — from $4.9 billion in government subsidies. He calls incentives “helpful” but not necessary, and “catalysts” that can help projects along.

The LAT notes that its $4.9 billion figure includes “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.” The paper does mention that Musk and others have put private capital into the companies, but one of the paper’s main assertions is that “Musk and his companies’ investors enjoy most of the financial upside of the government support, while taxpayers shoulder the cost.”

Musk says the article doesn’t provide enough context. For example, he said that the more than $1 billion in tax incentives for the Gigafactory that’s being built in Nevada kick in only if certain goals are met. (The LAT describes “hardball negotiations” during Nevada’s quest to land the Gigafactory, a long process we wrote about on SiliconBeat.) Musk also pointed out that Tesla didn’t invent California’s zero-emission vehicle credits — they were established years ago.

“The article makes it seem as though my company is getting some huge check, which is fundamentally false,” Musk told CNBC.

The LAT also talked with CNBC: Deputy Business Editor Brian Thevenot reportedly said on the “Closing Bell” show that the story “paints a picture that I think Elon Musk would agree with, that his business strategy is to incubate high-risk, high-tech companies that promote green technology with the help of billions of dollars of government money.”

Did someone say green? Musk also mentioned that “the incentives that Tesla and SolarCity receive are a tiny, tiny, pittance compared to what the oil and gas industry receives every year.”

This isn’t the first time Musk has spoken out publicly against a high-profile story. In 2013, we followed his (data-backed) war of words with the New York Times after the paper’s negative review of a test drive of Tesla’s Model S.

 

Photo of Elon Musk, center, by Patrick Tehan/Mercury News archives

 

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  • sowhat

    I look forward to seeing a comparable article about the ULA, big oil, Boeing, GM, Ford, Chrysler and the tens of thousands of other companies that have received tax breaks.

    • Sumit Nagpal

      Precisely. Moving on. There is no “story” here other than one of extreme focus and unprecedented success to make good on promises to many, many means of funding.

    • Guest

      Attempting to change the subject won’t make any of these facts go away. Basically he lives off of taxpayer handouts and stock bubbles driven up by people that can’t do math and are easily suckered by someone that says just what they want to hear.

      • Patrick James Bayham

        how is that minimum wage at shell PR working out for you?

        • Guest

          That’s another attempt to change the subject called an ad hominem fallacy. The only reason to desperately try to change the subject is to avoid these facts.

          • Patrick James Bayham

            no ,,not when its the truth..we all know what you do for a living…

          • Guest

            Repeating the same fallacy yet again thinking something will change just enters into stupidity.

          • Patrick James Bayham

            not a fallacy.you don’t know the meaning of half the words you use. 🙂 lol

          • Guest

            You can easily look it up yourself.

          • Patrick James Bayham

            no need.

          • Guest

            Some people resist education. That would help prevent being suckered by the Musks of the world.

          • Patrick James Bayham

            ok..:)

      • sowhat

        My point is, this is EXTREMELY COMMON!!!! If you don’t like it, complain to your politician. It would be extremely stupid for Elon to just leave those credits on the table. Have you kindly returned all the credits you have received from being married, kids, mortgage, EIC, etc?

        Also keep in mind, other countries are investing in technologies such as this. So, would you rather be a leader or a follower? I guess you prefer that we should be just grateful for Facebook, Walmart and McDonalds. Do you think we would have gone to the moon and our space industry without government involvement? Don’t forget, the Internet was also started by the US government. Where do you think our technology sector would be today if we let Russia and China be the forefront on this?

  • Dr. Dean Dauger

    Sounds like when Apple was accused of Foxconn’s problems. Lots of other computer companies use Foxconn so why highlight Apple? Lots of companies get bigger subsidies so why focus on Tesla?

    • Guest

      How does it sound anything like that? It’s a fact Musk is gaming government handouts to create a stock bubble and put billions in his pocket. That takes the money away from the legitimate and intended uses along with robbing some (not so smart) people of their retirements.

      • Dr. Dean Dauger

        Fill in the blanks:

        Why highlight ______ when so many other companies use ______ too? Clickbait!

        A. Apple; Foxconn
        B. Tesla; government subsidies *
        C. All of the Above

        Answer: C

        * More subsides go to:
        Boeing $11+ Billion
        Alcoa $5.6 Billion
        Intel $4 Billion
        Sempra Energy $2.2 Billion
        Cameron LNG $2.2 Billion
        And many more at:

        http://subsidytracker.goodjobsfirst.org

        Where is all _your_ outrage about subsidies to Boeing and a couple dozen other companies who _each_ get more than Tesla?

  • Yogi baba

    Elon musk is a fraudster. He makes random statements to support his case, making them sound like facts. But they are not. Only fools will believe this guy.

  • Dave

    Incentives are a very straightforward and effective way to correctly price into the free-market externalities that cause sub-optimal performance.

    Why did companies pollute the Hudson river, because they don’t have to pay the actual costs associated with the damage to fisheries, tourism, health related costs, etc, directly the result of said pollution. By incentizing industries with positive externalities, and taxing ones with negative externalities, you make for a more perfect free-market, in which entities act according to the actual cost of their actions.

    Kind of what Adam Smith alluded to in a ” The Wealth of Nations”.

    • Guest

      What are the positives of creating a huge stock bubble where a lot of people are going to lose a lot of money while a few people at the top hide a way a few billion before it crashes?

      • Dave

        Before forewarned, I don’t take you seriously.

        “What are the incentives of creating a huge stock bubble”?
        -None of course. So lets not.

        Stock bubbles are a natural part of an unregulated freemarket (http://en.wikipedia.org/wiki/List_of_stock_market_crashes_and_bear_markets), and are a dangerous weaknesses. The freemarket is an excellent tool, but is not fire and forget. Heck, the Tobacco companies have killed more people than all the wars put together 6M per year world wide (http://www.cdc.gov/tobacco/data_statistics/fact_sheets/fast_facts/), literally targeting kids. The banking industry knowingly took us over the edge in 2008.

        Incentives, taxes, and regulation are not used to CREATE bubbles, rather to make sure the free-market is performing optimally. Without it, it is a very dangerous thing. We need to pro-actively alleviate pressure to avoid collapse when bubbles are observed.

        With Electric vehicles, solar energy, and oil, long term costs/benefits are not naturally factored in, so we must act to optimize. The result is a far more optimal system.

  • Patrick James Bayham

    seems the FUD of the massively tax-free oil companies is failing to take hold.
    GOOD.

    • Guest

      Why are you so easily suckered? Why are you making false statements?

      • Patrick James Bayham

        hahahaha..wanker.you sad little turd of a liar,:)

        • Guest

          Name calling doesn’t work either. Sorry.

          • Patrick James Bayham

            you are dismissed
            as a failed human being.

          • Guest

            Name calling a third time doesn’t work either. It’s getting clearly want kind of thinking process allows people to be so easily suckered.

          • Patrick James Bayham

            still here? guess you’ve stop spewing your nonsense fud then?

          • Guest

            No, that didn’t work either. Facts are still the facts. Funny how that works.

          • Patrick James Bayham

            yes i agree,but you don’t have facts..you do know what FUD is ..right?

          • Guest

            No, that didn’t work either.

          • Patrick James Bayham

            ok i guess you don’t then.

  • Guest

    Really it’s a sad reflection of the education system that people can’t see through fraudsters like Musk. Just in this case he used red herring fallacy of “but but but gas and oil”. Anyone educated in logic knows the only reason to use such a fallacy is to avoid the facts. He’s also used bullying tactics by suing and threatening to destroy the careers of anyone that gives Tesla products bad reviews. Just that should clue people in that he is a total slime.

    • Patrick James Bayham

      lol…
      lots of science fiction in those “facts”

      it’s a sad reflection of the education system that people can’t see through fraudsters like

      the oil companies and its middle men.
      see how easy it is.?

      • Guest

        Yet another attempt to change the subject won’t make any of these facts go away. The stupid level is exceptionally high to use the SAME fallacy replying to a post explaining why it’s a fallacy.

        • Patrick James Bayham

          LOL

          • Guest

            This appears to have no point at all.

          • Patrick James Bayham

            finally you understanding what your “opinion” is.. 🙂

          • Guest

            No, that didn’t make any facts go away either. Would you like to try some more name calling?

          • Patrick James Bayham

            sure..how about willfully ignorant ? is that an attack? because from your “facts” .thats what it looks like.

          • Guest

            There doesn’t appear to be any point here.

          • Patrick James Bayham

            danm right..go and annoy another forum..your job here has failed.

          • Guest

            Going back to the ad hominem doesn’t work either. If you google “fallacies” you can get a whole list to try. They won’t work but you can try them.

          • Patrick James Bayham

            like your fallacies?

          • Homer

            You have failed fool! Sad part is you have no ability to see it!

          • Patrick James Bayham

            lol.ok.if YOU say so…:)

          • Patrick James Bayham

            so…what do YOU think? got anything? guess not.
            shame you don’t live up to your avatar name. try some critical thinking .

          • Homer

            Critical thinking from the super helmet boy? LOL!

          • Patrick James Bayham

            still here?

          • Homer

            That is all he is capable of!

          • Homer

            You are making a fool of yourself!

          • Patrick James Bayham

            you still haven’t said anything..:)

          • Homer

            Says the child with the the little boy super hero helmet.

          • Patrick James Bayham

            you still have nothing.

        • Patrick James Bayham

          idiot 🙂

          • Guest

            Name calling a second time won’t change anything either.

          • Patrick James Bayham

            not name calling…just an observation.

          • Guest

            No, still no facts vanished.

          • Patrick James Bayham

            so funny..you do stand up right? because that really needs imagination..right?

          • Guest

            That doesn’t even make sense but obviously yet another ad hominem fallacy of some sort.

          • Patrick James Bayham

            is that it? you keep repeating words in the hope you
            ‘ll stumble on their meanings….pretty sad.

          • Patrick James Bayham

            did you just learn a new phrase” ad hominem”..and like a child you feel the need to constantly use it, even without actually knowing what it means?
            calling you stupid is not an attack is it?
            its almost like a confirmation.

          • Homer

            Incredible childishness!

          • Patrick James Bayham

            thats called projection.

          • Homer

            Look at your own picture and please explain why your are not acting like a child . LOL!

          • Patrick James Bayham

            piss off …:)

          • Patrick James Bayham

            why the obsession with avatars? is it deflection or just stupidity?

          • Homer

            No childish SV name calling!

          • Patrick James Bayham

            wtf does that even mean?

          • Homer

            Sorry I post things above your comprehension level. SV= Silicon Valley

          • Patrick James Bayham

            why do you apologize all the time?…shows inadequacy .

          • Patrick James Bayham

            gafysrhwym stumpy leg.
            let me know when you get it? 🙂

          • Homer

            The idiots are the Elon worshipers!

          • Patrick James Bayham

            ok..you’ve obviously though this out….(snark)

          • Homer

            “though”? LOL!

          • Patrick James Bayham

            better now..glad you caught that!

    • Dr. Dean Dauger

      You’re exposing yourself, and maybe SiliconBeat, to libel, Guest.

    • sanibonani

      Boeing and other companies have received $ from NASA for space ventures. Probably the money that NASA has put into SpaceX will be their most profitable investment. SpaceX has significantly lowered costs for space trips, and Russian rockets (expensive) will no longer be necessary. Win for the US.

      The Nevada investments are based on performance goals, and Nevada will be getting more money out of their investment in jobs and other economic benefits than they put it. Win for Nevada.

      Unlike other people, Musk has also put a lot of his own money into his ventures.

      Guest does not know what he is talking about. And makes up stuff as well.

  • lad76

    Seems like the only way new tech gets implemented is when our failing capitalist system gives industry middle-class taxpayer money to do it. At one time companies used their own money for R & D; now I think Wall Street drives the money to the 1%ers pocket because they are part of the 1%. One day we all or going to get fed up with this greedy nonsense and vote for a President who doesn’t work for the 1%ers and will fight for the welfare of the middle-class. Gotta a hint…it won’t be a Republican and it ain’t a Clinton.

    • sanibonani

      Lordy, the tax payers have funded oil companies for several decades to the billions of dollars.

      And the solar energy govt entity that helped solar companies get a head start, was started by Bush II.

      You don’t really know much.

      • lad76

        Know enough to know I caught myself a Republican fish with the bait.

        • sanibonani

          You don’t know much.
          Musk used his own money to start.
          The internet you are using was funded using government money.
          Doing its socialist thing, you know.
          Except for the military, which is now only used to line the pockets of Republicans.
          If Sanders could win, he would be second best after Warren.
          (Jeez, heard that the wolfowitz group was advising Jeb. How stupid.)

  • Homer

    Musk companies CANNOT make it on their own!

  • Homer

    Elon Musk, Tesla CEO, calls a Los Angeles Times article about his use of government subsidies “misleading and deceptive.” How so? Seems completely true!

 
 
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