A recent article from the LA Times‘ Jerry Hirsch has ruffled the feathers of Tesla Motors CEO Elon Musk – as well as our own, if we’re honest – as it accuses the billionaire of receiving $4.9 billion in government subsidies since his companies Tesla, SpaceX, and SolarCity (of which he is a Chairman) have launched.
The problem with that $4.9 billion figure, according to Elon Musk, is that it’s purposefully deceptive.
You can listen to the executive’s entire phone interview with CNBC in the video below, but we’d like to touch on a number of key points that Mr. Elon Musk makes during the chat. First off, there’s the matter of the Nevada state government’s $1.2 billion in incentives for the first Tesla Gigafactory, currently being constructed near Reno. While the LA Times piece presents this figure as though it were “a check that we just get,” says Musk, the reality of it is that this $1.2 billion in tax breaks is spread out over two decades, and carries with it a massive caveat.
That caveat is this: according to Elon Musk, in order to actually receive the $60 million per year in tax breaks, the factory must meet or exceed $5 billion per year in output – or $100 billion total over those two decades.
This first Tesla Motors Gigafactory is also projected to lead to around 6,500 more jobs in the state directly, before any economic ripple effect has taken place. And then, Elon Musk raises the minute little point that Moody’s independently assessed the incentive package offered to Tesla Motors, and predicted that it would raise rather than lower Nevada’s overall credit rating.
Billionaire and serial entrepreneur Elon Musk also notes several other glaring faults with regard to Mr. Hirsch’s maths. Those include the $517 million included in that $4.9 billion figure which came from selling ZEV credits to other automakers. That money didn’t come from any state or federal government, argues Musk; it came from other car manufacturers.
And then, also included in the inflated figure is the millions of dollars given to customers through tax subsidies and rebates extended to all purchasers of zero-emissions vehicles. Elon Musk reminds us that such incentives began roughly two decades ago as lawmakers grappled with the issue of addressing declining air quality. Plus, if Tesla Motors never existed, those incentives would simply have gone to the buyers of ZEVs from other manufacturers.
Ultimately, the phone interview with CNBC below leaves us feeling as though Jerry Hirsch’s piece regarding Elon Musk and his alleged corporate welfare-chasing is nothing more than a purposefully misleading attempt at character assassination, crying foul at the $4.9 billion that Musk was allegedly handed, while failing to address the millions more granted to or stolen by corporations in every sector of the US economy.
If we want to throw stones at Elon Musk and his Tesla Motors outfit for taking taxpayer handouts, we’d better grab handfuls to toss at just about every other US corporation, as well.