Tags: elon musk | billionaire | receives | government | funding

Solar Billionaire Elon Musk Receives Billions in Govt Funding

By    |   Sunday, 31 May 2015 07:43 AM

Elon Musk's multibillion-dollar companies that build electric cars, launch space rockets and sell solar panels were built through the help of an estimated $4.9 billion in government incentives, an analysis of federal data reveals.

"He definitely goes where there is government money, Dan Dolev, an analyst at Jefferies Equity Research, told The Los Angeles Times. "That's a great strategy, but the government will cut you off one day."

Musk's Tesla Motors Inc., SolarCity Corp. and Space Exploration Technologies Corp., or SpaceX, have all benefited from public funds, including grants, tax breaks, low-cost loans, and even environmental credits and rebates to attract customers to buy solar panels or electric cars.

Tesla and SolarCity are both reporting net losses, but their stocks are climbing while taxpayers end up paying for incentives for the creation of products for wealthy customers.

Musk and other officials with the three companies have not commented publicly, but the government subsidies are detailed in public records, reports The Times.

For example, in New York, the state is spending $750 million to build a SolarCity solar panel factory in Buffalo. However, SolarCity will only pay $1 a year to lease the plant, and will not pay property taxes on it for 10 years, at a savings of $260 million.

In addition, the federal government provides grants or tax credits that cover 30 percent of solar installations, and SolarCity reported receiving $497.5 million in direct grants from the Treasury Department.

In other examples, Nevada is providing Tesla with $1.3 billion in incentives for a battery factory in Reno, and SpaceX has made a deal to allow $20 million in economic development subsidies in Texas.

SpaceX has also received more than $5.5 billion in government contracts from NASA and the U.S. Air Force.

"Government support is a theme of all three of these companies, and without it none of them would be around," said Mark Spiegel, a hedge fund manager for Stanphyl Capital Partners.

Musk is in the process of moving into a new industry, last month announcing Tesla Energy-branded batteries that he claims will one day make the world's energy grid obsolete. The batteries will be made in the Nevada factory, along with those used in Tesla vehicles.

The government funding is already lined up for that venture as well, as Tesla has secured  $126 million in subsidies in California for companies that develop energy storage technologies, The Times reports.

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Elon Musk's multibillion-dollar companies that build electric cars, launch space rockets and sell solar panels were built through the help of an estimated $4.9 billion in government incentive, an analysis of federal data reveals. He definitely goes where there is...
elon musk, billionaire, receives, government, funding
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2015-43-31
Sunday, 31 May 2015 07:43 AM
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