Tesla Unfairly Criticized For Subsidies

Tesla Electric Car
Tesla Electric Car

How much money does Tesla get in subsidies?

According to various reports, Tesla and the other entities owned by Elon Musk, SpaceX and SolarCity, are being kept afloat by almost $5 billion in subsidies. The vast majority of which, being all but $20 million, is divided between Tesla Motors and SolarCity. SpaceX got a $20 million grant to build their space port in Texas that is to be literally a launching pad for humanity to begin interplanetary space exploration. If you feel that is unreasonable try looking into what NASA costs the public just to turn on their lights.

Tesla received just under $2.4 billion in total subsidies. Over $300 million of which is based wholly on incentives and rebates any company that sells electric vehicles get. That $7500 rebate you get for an EV purchase is being counted in these reports as part of the subsidies for Tesla, even though these rebates are standard and apply to any electric car company. Misleading to paint that rebate as something special Tesla gets over the rest of the industry.

Over $500 million comes from other car manufacturers who must pay penalties to the industry for not producing enough zero emissions vehicles. This one is really dishonest to hang as a tax break that the public are on the hook for. Tax payers do not pay it. It’s part of a long standing regulation way before Tesla came along. Manufacturers are required to produce a certain amount of zero emissions vehicles and must pay $5,000 per missing credit if they do not meet the requirements. That means over 10,000 credits were paid by other car manufacturers that just went to Tesla. http://www.arb.ca.gov/msprog/zevprog/zevcredits/2012zevcredits.htm

Just under $1.3 billion to build a Gigafactory in Nevada. Sounds like a lot unless you read about how there are terms and conditions to that amount. The term being over 20 years. The conditions, among others being the creation of close to 7,000 jobs. In fact, Tesla would have to spend over 77 times the amount of the subsidy to fully qualify. So about $100 billion. Still outraged?

Tesla Tax Credit Explained
Tesla Tax Credit Explained

Over $1.75 billion of the “subsidies” to SolarCity are in the form of tax breaks on property taxes and the 30% energy rebate in their solar installation. Depending on which program the property uses the 30% rebate either goes to SolarCity or to the homeowner. None of this is disclosed in any of the articles attacking Elon Musk.

$45 million of the Tesla subsidy came as a result of a discount from a department of energy loan that was paid back with interest in which taxpayers actually made money. In fact when digging into each account it seems like shoddy reporting at best in which the facts have been skewed to paint Tesla as a burden on the taxpayer. I do not wish to list the various places that these faulty reports have originated as there is nothing to be gained from personal attacks. You can find them on your own easily.

A detailed report on these subsidies was written last year by Fred Lambert in a report for Electrek. Fred explains in detail where $750 million of the subsidy to SolarCity went.

Complete breakdown of the $4.9 billion in government support the LA Times claims Elon Musk’s companies are receiving

“The state expects to spend $350 million to build the plant and $400 million for equipment. They are securing this investment by owning the plant. The company secured a $1 per year lease for the next 10 years with an option to renew. SolarCity would have to spend $5 billion over the term of the lease and employ directly 1,450 workers at the Buffalo factory and 2,000 additional employees in New York

“If SolarCity was to fail to deliver on these terms, they are subject to a $41.2 million penalty payable to the Research Foundation of SUNY, the organization overseeing the project for the state, for every year they don’t comply with the terms. Not only the state’s investment is backed by the fact that they own the infrastructure, but they also get their money back if SolarCity fails to properly utilize the money invested.” – Fred Lambert

Subsides Compared

In 2014 alone it was estimated that the oil and gas industry received over $37 billion per year in subsidies in the US. Global estimates by the IMF in 2015 were over $5 trillion http://priceofoil.org/fossil-fuel-subsidies/

Estimates on big pharmaceutical companies are in the neighborhood of $270 billion per year that the taxpayers end up shelling out for in the US due to President Bush passing legislation prohibiting the government from negotiating prices with pharmaceutical companies. The top 11 pharmaceutical companies between 2002-2011 pocketed over $700 billion in profits. http://usuncut.com/news/drug-companies-receive-61-times-more-in-subsidies-than-planned-parenthood/

According to the Sunlight Foundation, the top 200 companies spent a combined $5.8 billion on lobbying Congress between 2007 and 2012. And in those same years, received $4.4 trillion in federal contracts. (https://sunlightfoundation.com/blog/2014/11/17/fixed-fortunes-biggest-corporate-political-interests-spend-billions-get-trillions/)

Tesla Plan

Elon Musk has revealed his plan for Tesla and SolarCity, which essentially has the goal of making the world a cleaner one where we can breathe the air, drink the water and where all people of the planet can have power. When you take a closer look at the “subsidies” afforded Mr. Musk and his companies, see that there is solid reasoning behind each one, see a vision that looks to benefit humanity rather than feed off of it for personal gain. One must question the true intentions of those looking to besmirch Tesla. I have my own feelings on that, but will allow you to speculate using your own imagination.





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Born in Vancouver, B.C. , Canada. Father, musician and philosopher, lover of people, culture, eco-tech, hockey and craft beer. Thinking of solutions to global issues since 1994 when I was awakened due to the Rwandan genocide and the lack of action by the G7 nations. Adopted the Buckminster Fuller philosophy that in order to solve a problem you create solutions that make them obsolete.