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Stinking rich - Josh 330


H/t Paul Homewood on an interesting story in the LA Times about the subsidies Elon Musk receives. Well worth a read - if you dont mind the niff.

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Reader Comments (30)

A $billion subsidy here, a $billion subsidy there and soon your talking big money. And the outcome of all that subsidy - nothing of any worth.

If there's one thing politicians are good at, it's wasting taxpayers' money.

Jun 2, 2015 at 5:19 PM | Registered CommenterPhillip Bratby

So using unreliable power to drive unreliable technology only works with Renewable subsidies.

Green maths at its best.

Jun 2, 2015 at 5:20 PM | Unregistered Commentergolf charlie

It's the way America works. When I see estimates of Bill Gates' fortune, I wonder how much of it really belongs to the government, much of it to intelligence, military protection rackets.

Jun 2, 2015 at 5:28 PM | Unregistered Commenteresmiff

Parfum de Blob - marvellous! Calendar please!

Jun 2, 2015 at 5:35 PM | Unregistered CommenterCapell

Anyone who can come up with faery stories so good that politicians hand him $5 Billion dollars is indeed a genius.

Jun 2, 2015 at 5:51 PM | Unregistered CommenterE. Martin

~10 $olyndras (h/t Willis Eschenbach)

Jun 2, 2015 at 6:30 PM | Unregistered CommenterSlywolfe

This is why it's important to take a sceptical view. Getting people too scared of AGW means that decision makers throw money around hoping for a magic solution. They believe the merchants of doubt meme and stop trusting professionals because they're not on message. They're vulnerable to ambitious chancers who are often very charming and leave people grateful that they've tried and failed, even as they walk away with the money.

What I've never been sure is how much the 'cheapness' of solar panels is due to Chinese subsidies.

Jun 2, 2015 at 6:47 PM | Unregistered CommenterTinyCO2

To be fair, SpaceX have achieved down mass capability for the ISS and considering this was done using the Shuttle, costing almost a billion a pop, 20 million is not that large a subsidy.

The carbon credit scheme with Tesla does appear a different matter though.

Jun 2, 2015 at 6:48 PM | Unregistered CommenterMicky H Corbett

He is a South African, as am I. He epitomizes the values in our society. Steal, steal, steal!

Jun 2, 2015 at 7:00 PM | Unregistered CommenterBC

Some of the subsides quoted do not appear to be subsidies at all (e.g., "New York State cost to build solar panel factory") while others are tax breaks and often given to many types of industry (including oil).

In short, it is not the smoking gun. But it is interesting to see that the author/newspaper has risen above intimidation and have published this sort of thing.

Jun 2, 2015 at 9:03 PM | Unregistered CommenterBrute

Musk makes DeLorean seem like a philanthropist.

Jun 2, 2015 at 9:15 PM | Unregistered CommenterHarry Passfield

Musk is very, very bright boy who thinks big. SpaceX - as just one of his ventures - is no small achievement.

The entrepreneurial mindset probably says that if the pols are stupid enough to offer it, it would be a crime not to trouser it.

The gulf between Musk and (say) Deben or Yeo - or indeed any of our uber-lightweight homegrown unreliable industry chieftains - is wide indeed.

Jun 2, 2015 at 10:39 PM | Unregistered CommenterJerryM

This is an effect of the present broke system and broke establishment.
The new Lysenkoism is going to cough up more and more of these types of con men

Jun 2, 2015 at 10:54 PM | Unregistered CommenterVenusNotWarmerDueToCO2

Here is a quote from “The Savior Elon Musk”, Wall Street Journal, May 29.

Mr. Musk has yet to show that Tesla’s stock market value (currently $32 billion) is anything but a modest fraction of the discounted value of its expected future subsidies.

Jun 2, 2015 at 11:07 PM | Unregistered CommenterDouglas J. Keenan

I once worked for Elon, long before he was a billionaire.

Yeah, bright guy, bullshit artist, just about everything you can say about him is true good or bad.

What I appreciate is that he took his money and went outside the software/app/cloud bubble and and did hardware, and he's got a lot of his own skin in the game.

He's got a jones about being titled as 'founder', but he founded neither Tesla nor SolarCity (nor PayPal) - he just rolled in with a fat wallet at the right time. SpaceX is all his.

Tesla benefits greatly from the government of the state of California being a criminal enterprise. The Tesla Model S is a great product in a lot of respects and quite an industrial achievement, but its manufacturing facility, its ZEV incentives, and much of its market exists only because the state is run by crooks.

SpaceX is probably the LEAST subsidized of all the rocket outfits.

Jun 3, 2015 at 1:00 AM | Unregistered CommenterJEM

Just to continue a little more on this:

When I say 'SpaceX is probably the LEAST subsidized' I'm referring to ULA and the Ariane folks and everyone else who's actually carting payloads back and forth to orbit at this point, not Armadillo or the rest that are still kinda embryonic.

Some folks went out and put a camera in the grass, <A HREF="">this</A> is entertaining if you care about Tesla's ZEV credit scam.

Tesla is playing the game as it's been set up, as most other businesses would in their situation, the issue is that it's a rigged game, set up by the crooks at CARB and in the rest of the California state government.

Jun 3, 2015 at 2:47 AM | Unregistered CommenterJEM

Wait'll everyone starts grabbing their own share of the available Teslas. Like the Cadillac factory worker building a car from one stolen piece at a time.

Jun 3, 2015 at 8:09 AM | Unregistered Commenterkim

"He is a South African, as am I. He epitomizes the values in our society. Steal, steal, steal!".

You can post any unthinking junk here but let's recognize it as junk. Musk hasn't stolen, he's sensibly taken advantage of government offers as any astute business person might. By definition, the process of taking money by force via taxation is not stealing, either.

Jun 3, 2015 at 8:20 AM | Unregistered Commenteralleagra

To anybody who hasn't read the Daily Kanban article - the crookedness of California Air Resources Board (CARB) is just epic.

It also goes a long way to explaining that video of Teslas being recharged with a diesel generator.....

It's not a stretch to compare Musk to 19th Century robber barons like Leland Stanford - California politicians have long dipped Federal (i.e. taxpayer) funds to buddy up to titans of industry who in turn grease the pols.... The whiff coming from the High Speed Rail project is extremely strong.....

Musk seems to be quite sainted in much Mercan tech press where in some cases *any* mention of subsidy is verboten

Jun 3, 2015 at 9:34 AM | Registered Commentertomo

Someone has been taking creative accounting lessons from the IMF. Almost none of the 'subsidies' that supposedly accrue to Tesla would traditionally be called subsidies. Tax reductions* are just not a subsidy end-of. If discounted loans are subsidy (a very much larger loan was given to GM btw) then all big banks are receiving a state subsidy all the time but I don't hear much bleating about that. And if someone wants to take issue with the way that California supports it's businesses then they might consider that is how they started silicon valley and that they have been a net contributor to the Federal budget for all of the past 30 years bar one precisely because of such hitech-friendly policies.

Similarly the solarcity 'subsidies' are not different to any subsidies given to many traditional industries, including auto plants, for creating jobs in the district. And, as mentioned above, SpaceX is still far cheaper than NASA was to the public purse.

If we accept such specious arguments (even including training grants for Pete's sake!) then we must accept the arguments of green activists about fossil fuel subsidies. We can't argue both ways.

Meanwhile Ryanair are accused of being subsidised because many European authorities keep loss-making airports open in order to encourage tourism. We must presume this is a net benefit to the region or they wouldn't do it but the EU was frowning upon it....
Yet this is just natural competition that supports a thriving industry that increases business overall which seemingly everyone is happy with; take away these piffling grants and you take away the tourism net business gain. And anyway who can possibly blame Ryanair for anything other than trying to offset some of the ridiculous flat airline taxes that otherwise undermine it's business?

The bottom line is that grants can and do increase growth in many industries! Some you win and some you lose; only a fool would pretend they knew what is certain to succeed or fail in the hitech field. Without state help, for example, the internet would not have got off the ground at all. If it had been dependent on the EU or entrenched business communication companies then it would be unlikely we would have an internet at all.

*The truth about tax reductions, credits or breaks: Any time you get some money back from dumb-spending governments it offsets some of the money they grab in other ways to then waste on countless other vanity projects eg pointless wars, farm subsidies or the sheer administrative burden to support and police all these ever-increasing restrictions to business.

Jun 3, 2015 at 9:38 AM | Unregistered CommenterJamesG

Herein lies the difference between green subsidies (where someone else's money is given to a company to prop it up and without it either wouldn't have existed to start with or would have gone out of business) and fossil fuel subsidies (which don't actually exist as someone else's money is not handed over to allow a fossil fuel company to exist or operate).

Just like the solar farm near Hitchen in the UK, where the only thing being farmed are government subsidies.


Jun 3, 2015 at 9:40 AM | Unregistered CommenterMailman

I hate to strike a discordant note here, but some of these "subsidies" are the government not taxing, or reducing the taxes, (around $1.84Bn). That is only a subsidy if all the country's money belongs to the government.

Jun 3, 2015 at 9:44 AM | Unregistered Commentergeronimo

JamesG I see you beat me to it.

*The truth about tax reductions, credits or breaks: Any time you get some money back from dumb-spending governments it offsets some of the money they grab in other ways to then waste on countless other vanity projects eg pointless wars, farm subsidies or the sheer administrative burden to support and police all these ever-increasing restrictions to business."

Precisely the way I feel about the winter warming allowance.

Jun 3, 2015 at 9:48 AM | Unregistered Commentergeronimo

I cannot help but think that Elon is playing a blinder here.

He wants to do SpaceX and they are achieving incredible things without anything like the budget of NASA, which of course is not a subsidy.

Now can you imagine the screams from the Environmentalists if all he was doing was SpaceX?

Instead he gets the environmentalists onside by pointing at his green credentials with Tesla & Solarcity and gets left in peace with SpaceX.

Jun 3, 2015 at 10:33 AM | Unregistered CommenterLesK

I think the original Tesla was based on the Lotus Elise, so the idea of battery replacement is pretty ironic. I had an Elise, which was a glorious car to drive. The problem was that the battery would very quickly go flat. When it did, there was no point re-charging it, so replacing the battery was unavoidable and that was incredibly difficult, if you thought that keeping at least some of your fingers was actually a plus-point in life.

I love the irony that Tesla is still struggling with battery replacement.

Jun 3, 2015 at 1:15 PM | Unregistered CommenterOwen Morgan

That doesn't include subsidies other countries give to Tesla buyers. With Norway's Sovereign Wealth Fund and tax breaks for people who buy electric vehicles, Tesla model S was the best selling car in Norway in 2014 according to this podcast anyway:

Jun 3, 2015 at 2:21 PM | Unregistered CommenterRc

As far as SolarCity goes, yes, they're subsidized by the state and Feds but it's not a subsidy that's unique to their operation, lots of other solar businesses hoover up exactly the same Benjamins. I'm guessing Elon invested in them because it was run by a couple of youngish simpatico South Africans.

Disclaimer: I've got a bunch of PV solar on the roof, not through SolarCity, for which I got my state and Federal baksheesh, and they're old enough that I'm on the relatively generous PGandE E7 TOU net-metering tariff if you want to look it up...

California - CARB and the rest of the administrative-law state - are firmly behind Tesla because it's the poster child for the Green Industrial State - proof that (given sufficient taxpayer-funded fluffing) you can, in fact, build a Big Shiny Pretty Product in California that excites all the Right People.

Elon's too smart to tie himself to California manufacturing forever, he put his battery plant in Nevada and I'm sure that if the state took away his money for the NUMMI plant he'd have someone figuring out how to get all the tooling out to somewhere else in a hurry.

I'm guessing the new flexible tooling they've put in to support the Model X is probably much more portable...

Jun 3, 2015 at 3:38 PM | Unregistered CommenterJEM

Tim Worstall provides some analysis here:

A great salesman, or just an efficient conduit for tax dollars?"

Jun 3, 2015 at 7:49 PM | Unregistered CommenterPcar

Pcar - Worstall's wrong on one crucial point.

Elon Musk has, so far as I can tell, not pocketed significant money off of the three ventures he's currently associated with in the popular mindset.

He took seed money from his family and started a very early maps-and-business-directory company, once the VCs paid him off and sold it to Compaq he pocketed a small fortune ($16M). He took that, bought into an outfit that didn't really have a name but became PayPal, and pocketed a considerably larger fortune ($2B) when eBay came calling. And that's the basis for what he's been doing since.

Jun 4, 2015 at 12:18 AM | Unregistered CommenterJEM

Musk is certainly seeming to provide more bang per buck than NASA as far as SpaceX is concerned - Tim Worstall's take that he's a superlative conniver in other areas stands up too.

The debasement of language and the consequent re-definition of subsidy has been underway - as we all well know - for some time by assd. AGW activist goons - the peculation (for that is what much of it is) of public funds continues apace - especially with the wholesale corruption of the definition of "charity" and the explosion in parasitic, publicly funded activist lobbying groups about - due to the near stranglehold of policy by activists and, erm.... enterprising goons crafting irresistible expensive trinkets to decorate idiotic policies was inevitable .... Mr. Musk is at the moment rather successful at it - eh?

Once something gets as big as this - the torturing of the balance sheet and real flows of funds - as we can already (not) see aren't that easy to divine. It's almost like he's "too big to fail" ..... even if he falters folk like CARB will raid other peoples money to keep their trinkets arriving.

Jun 4, 2015 at 12:25 AM | Registered Commentertomo

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