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Musk defends receiving $4.9 billion in government support for Tesla, SolarCity and SpaceX

RT | June 1, 2015

Tesla CEO Elon Musk defended the backing his companies get from state and federal sources as legitimate business practices, blasting a newspaper report about government subsidies as “inexcusable” and inaccurate.

According to the report published by the Los Angeles Times over the weekend, Musk’s companies – Tesla, SolarCity and SpaceX – have received an estimated $4.9 billion in government support in total over the years.

The electric entrepreneur didn’t deny the company gets the incentives, however he went on CNBC’s Power Lunch show on Monday, blasting the report as “incredibly misleading and deceptive to the reader.”

“Musk and his companies’ investors enjoy most of the financial upside of the government support, while taxpayers shoulder the cost,” wrote the LA Times, adding that public records show “a common theme running through his emerging empire: a public-private financing model underpinning long-shot start-ups.”

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

The subsidies have been disclosed in the companies’ filings and public records, but no one has tallied all the various forms of public assistance over time, the paper said. Its estimates of subsidies are based on state and federal records, interviews with local and state officials, credit analysts, and watchdog groups.

According to the LA Times, Tesla Motors has received $2.391 billion in government subsidies, while SolarCity has received $2.516 billion. Space Exploration Technologies (SpaceX), a private company that does not publicly report financial performance, received $20 million in local incentives and rebates for a space launch facility in Texas.

Among the examples cited by the paper was a $750 million solar panel factory in Buffalo, New York, which Musk’s SolarCity leased for $1 a year. The company will also not pay property taxes for a decade, amounting to $260 million in savings.

Tesla is getting $1.3 million from Nevada to build a battery factory near Reno, and has received more than $517 million from other automakers by selling environmental credits, known as carbon offsets.

Though after ten years in business Tesla and SolarCity still operate at a net loss, the stocks of both companies are riding high on future potential, the LA Times reported. … Full article

June 1, 2015 - Posted by | Corruption | , , , , , , ,

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