Elon Musk’s $4.7 Billion In Government Aid

Tesla Motors, SolarCity and SpaceX are all founded and directed by Elon Musk. It appears all three organizations also profit greatly from government incentives. The helping hand the government has given to Tesla Motors has come in the form of loans, grants, tax credits, environmental credits or incentives.

Most famously, Tesla Motors grew into what it is now on the hinges of a large government loan. The Department of Energy loaned Tesla $465 million dollars as part of their Advanced Technology Vehicles Manufacturing loan program. A tribute to Tesla and their progress remains on the U.S. Department of Energy website. That loan was paid back 9 years early, with interest. However, in recent days, numerous media outlets are reporting that Elon Musk’s help from the government runs deeper than previously thought.

For example, his organization, SpaceX, which champions itself as a privatized space exploration company, is set to receive $20 million in subsidies from the state of Texas to construct a launch facility in the lone star state. As the L.A. Times reported, that subsidy is in addition to $5.5 billion in government contracts that Space X has secured from both NASA and the United States Air Force.

Elon Musk’s other well-known company, SolarCity, has secured a large contract with the state of New York. New York is spending $750 million dollars in order to have SolarCity build a solar panel facility in the state. The lease on the property is $1 per year and no taxes are due on the property for 10 years, a savings of $260 million. To aid the organization and industry further, the federal government provides grants to subsidize 30% of the costs of residential solar energy system installations. The LAT reports that direct grants from the treasury department to SolarCity have added up to $497.5 million. Again, SolarCity, like Tesla Motors would be what it is today without a government loan. Back in 2011, the department of Energy loans SolarCity $344 million to install solar panels on 160,000 homes on 124 military bases all across the United States. The U.S Department of Energy loan to organization founded by Tesla’s Elon Musk was part of a reported $1 billion dollar contract with the federal government.

What could government financial support or the lack thereof mean for the future of Tesla Motors? Currently a $7,500 tax credit is available to new car buyers who opt for an electric vehicle such as a Tesla Model S. However, what would happen if that program went away? How would Tesla have to readjust its prices and advertising to reflect a loss of government support?

What do you make of the money that Tesla Motors has received from the Government? Do you look at it in the same way that you look at the U.S government’s bail out of the auto industry, or has it different since the funding helped the companies get off the ground?