Can we wean Elon Musk off government support already? (opinioin piece)

In this opinion piece, one I agree with, a question is brought up. Is there a limit to the amount of tax money ($5,000,000,000) going to the 3 companies the Musk heads up.

Tesla’s new Model 3 has finally arrived, and not a moment too soon. The critics seem to love it, and Tesla management says it’s already received deposits for 500,000 of the vehicles. Perhaps now Elon Musk can finally get his hand out of U.S. taxpayers’ wallets?

thehill.com...

Musk is indeed an ideas man, but the ideas are not new. Would these ideas get funding in the private world of funding? Evey business day Musk gets a check from the tax payers for $1,000,000,000.

Musk is, to be sure, an ideas man. Private, commercial space travel? Check. Washington to New York in less than half an hour in what he calls a “hyperloop” train that will travel at 800 miles per hour? Check. A new kind of tunneling engineering? Check. Solar energy? Check. Electric cars? Check, check.

As wide-ranging as these various entrepreneurial ventures may be, they all have one thing in common – not a single one of them would get funding in a competitive private capital market if it weren’t for massive (and I do mean massive) taxpayer-funded government subsidies.

It is called crony capitalism. I would have no problem with this if it were a non profit doing the research and then selling it to a company to then make the tax payer whole again. I believe that Musk should be removed from the govt welfare doles.

But granting literally billions of dollars in taxpayer subsidies to Musk’s firms isn’t the worst of it. No, that honorific is reserved for this little gem: 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.

There’s a phrase for that – it’s called “crony capitalism.” And it stinks.

a reply to: seasonal

I couldn't agree more, however, I am a bit torn. The opposite of subsidizing private companies is the government doing this themselves. Which, based on history, is as inefficient as we can imagine. The costs under a government sponsored and government led program would most likely be triple if not more.

What I take issue with is the ongoing personal enrichment Musk enjoys at taxpayers expense. Tesla is nothing more than a proving ground for Musk's solar cell technology. The reality is most people cannot afford a Tesla car. Those that can comprise the least number of car consumers. The average cost of a Tesla car for it to be actually put into widespread use would have to be around $12,000. They will never reach that number because the ongoing cost of R & D makes it impossible.

Essentially the taxpayer is paying to fund a massive R & D program across his companies that have yet to prove it will be viable. All the while Musk makes a ton of money.

On a side note there is private money involved with Musk's companies. How much I do not know but I know it doesn't even come close to what the federal government is paying.

a reply to: Outlier13

We do not know how much the costs would be if Nasa would be in charge of let's say solar research and give additional funding. It is unknowable because Musk's company is handling that.

We need to be pushing tech, and as you said Musk, who was very successful before his new 3 ventures is doing very well for himself. I often wonder if any of this could be done is well if it wasn't for his flair and showman's ship.

I'm glad the critics love the Model 3, because I'm not seeing a ton of enthusiasm among the general public. A common complaint seems to be that the interior is too spartan. There's the usual gushing reviews which sound like they were paid for by a PR department (and probably were), but not nearly as much real "buzz" as the Model S, or even X, generated.

Tesla hasn't been able to make money selling cars for $80,000 each. I don't see how they plan to make money selling cars for half that.

In any event, the federal subsidies are supposed to end once an automaker has sold 200,000 electric vehicles. For Tesla, this is expected to happen some time next year.

In his defense; Musk, through SpaceX has done a tremendous job saving the taxpayer some money. While the EV subsidy may be a waste, the model 3 is entering production and soon will take away Tesla's $7500 discount to buyers through tax credit. The money may help EV companies through sales of vehicles, but in the end the purchaser gets the credit. If Tesla unfairly got the increased sales over Nissan, Fisker, GM; it's because they produced a much more desirable product, so it's not fair to blame Musk on this at all.

Note: I am biased on this issue and own a Tesla. Hated the company at first, then I drove one and saw the innovation. Imo, it's easy to hate the Montgomery Burns of the world, hoarding all the wealth, and using it to build more. On the other hand, I'm glad someone is finally sort of speak "getting things accomplished" in my lifetime.

a reply to: seasonal

I am against all subsidies and public funding of private business.

The only thing the Federal Government should subsidize are public infrastructure projects related to things like the power grid, highway system etc. Giving money to private business is a ridiculous use of private funds and has huge potential for abuse by those in power.

a reply to: seasonal

Frankly, I'm suspecting that in the long run, this may SAVE taxpayer dollars.

I'd be willing to bet that Musk is doing space for a fraction of what NASA would spend; he's probably doing it in half the time and he's probably going to end up doing far more efficiently and effectively. How could he NOT do it cheaper and better? He doesn't have to spend $50.00 on toilet seats and $250.00 for a crescent wrench like the government ends up paying.

As for the EV thing, its perfect acceptable to me and I'd recommend extending the rebate past the 200,000 vehicle limit. I'd be surprised if Tesla Motors turns a profit in ten years, but the subsidies make it possible to accelerate the build out of the infrastructure, like the charging stations. Ultimately, someone will pass a law banning the sale of fossil fuel burning automobiles and light truck and that can only happen because Musk has blazed the trail. I see the subsidies as less a tax on the people but rather as an investment in the future.

a reply to: hitparader

Picking and choosing crony capitalism is a dangerous game that has given us the US medical system.

Tesla is highly over rated. They've never made a profit but Wall Street just loves them. The government funding is a scam. Tbeir cars aren't even meant for the masses. They're luxury cars.

Its just a matter of time before some other company takes hold with a reliable and affordable product. GM has been at it the longest and will be the affordable one. Porche and Mercedes will fill the luxury slot and Tesla will either be sold or close its doors.

recently elon begged the government to end the subsidy you know, so i doubt it's "cronyism" as you say.

a reply to: namehere

source please

Aren't the taxpayers helping to fund Trump's business empire vis a vis the fact that he hasn't paid any taxes in forever? And what does his organization produce that pushes the envelope? Golf courses, resorts and hotels that virtually no one on this board could ever afford to enjoy? At least Musk's organization is creating new technology and expanding our capabilities into the future. I'd rather the money go to him than some mismanaged, politically motivated government agency.

a reply to: jtma508

Funding Trump or not is not what the thread is about and does not justify or negate Tesla's insatiable appetite for tax $$.

originally posted by: seasonal
In this opinion piece, one I agree with, a question is brought up. Is there a limit to the amount of tax money ($5,000,000,000) going to the 3 companies the Musk heads up.

Tesla’s new Model 3 has finally arrived, and not a moment too soon. The critics seem to love it, and Tesla management says it’s already received deposits for 500,000 of the vehicles. Perhaps now Elon Musk can finally get his hand out of U.S. taxpayers’ wallets?

thehill.com...

Musk is indeed an ideas man, but the ideas are not new. Would these ideas get funding in the private world of funding? Evey business day Musk gets a check from the tax payers for $1,000,000,000.

Musk is, to be sure, an ideas man. Private, commercial space travel? Check. Washington to New York in less than half an hour in what he calls a “hyperloop” train that will travel at 800 miles per hour? Check. A new kind of tunneling engineering? Check. Solar energy? Check. Electric cars? Check, check.

As wide-ranging as these various entrepreneurial ventures may be, they all have one thing in common – not a single one of them would get funding in a competitive private capital market if it weren’t for massive (and I do mean massive) taxpayer-funded government subsidies.

It is called crony capitalism. I would have no problem with this if it were a non profit doing the research and then selling it to a company to then make the tax payer whole again. I believe that Musk should be removed from the govt welfare doles.

But granting literally billions of dollars in taxpayer subsidies to Musk’s firms isn’t the worst of it. No, that honorific is reserved for this little gem: 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.

There’s a phrase for that – it’s called “crony capitalism.” And it stinks.

Your playing to the trills of the industries he fighting.

Once again. He is doing the same thing everyone in those fields do....

The same loans he paid back ford got, same subsidies Boeing gets

How about we get rid of it all so he can compete in a free market?

Your literally falling for seeking alpha propaganda. There is a huge push to disredit musk right now since he is competing against the old gard ( who all get MORE than he does.

And by the way a lot of what he does is OPEN SOURCED.

Find me where ford or Boeing does that.

a reply to: seasonal

How much more does musk take then his competitors?

a reply to: Outlier13

Huh?

Why is government subsidizing anything?

Why would they do it themselves?

A private company thats able to sustain itself would be the obvious answer...

a reply to: gladtobehere

They do it to advance technology. In this case the manufacturing process.

In all honesty.....

If Tesla started exporting at REASONABLE prices, I'd buy a model 3.

Here in Australia, the model X and that SUV thing are sold at hyper inflated prices. I'm talking $156,000 AUD for a USED model X and $259,000 for a used SUV.

So, the only electric car that I would actually consider after discovering it actually has the range I need for every day country driving is firmly off the shopping list, with the SUV being worth double what I paid for my house one year ago.

Once the price comes down, I'm sure that more people will consider buying them because who wouldn't revel at the idea of a low maintenance car where you can avoid having to see a gas station ever again with?

As for government funding. I just hope Tesla plans to pay back the money he is enjoying right now.

a reply to: markosity1973

He has paid a lot back. The stories being pushed that are extremely antI tesla are often from the industry competition.

Tsla ain't perfect but it's not the welfare baby the industry ghost writers would have you believe.

a reply to: luthier

There are 5,000,000,000 reasons that prove otherwise.