How Elon Musk And Tesla Benefit From Tax Breaks

How Elon Musk And Tesla Benefit From Tax Breaks


Elon Musk: visionary technologist. His
projects shoot for the moon or literally Mars. Across space travel, energy, and of
course transportation. His companies have propelled him to a net worth of almost
20 billion, but how have government policies and taxpayer money boosted his
businesses? His major companies have all had significant government support in
one form or another. Let’s start with Tesla. Tesla has inked north of $2 billion
in federal and state subsidies in recent years. For a company that is yet to turn
a yearly profit in almost a decade as a public company the number is significant. On the Tesla side, which now includes Solar City obviously some of the biggest deals have been both in Nevada, and also in upstate New York in Buffalo In Nevada the state gave Tesla nearly $1.3 billion in tax breaks to build their first Giga factory in 2014.
Tesla will be sales tax free for 20 years, exempt from property tax for ten
years, and will receive millions in other incentives, that is if they keep up
their end of the bargain by investing billions into the facility and employing
thousands of people. I think that any other city or local government that’s considering getting into this massive tax subsidy game should take a hard look at Reno and ask if the costs are worth the benefits
Fulkerson says that Nevada’s infrastructure is unable to accommodate
Elon Musk’s plan for massive expansion. We want Tesla to succeed I mean we
really want electric cars and we really want to get off fossil fuels and we want
you know this economic region to succeed, but this kind of growth is just not
sustainable here. And that 2 billion dollar number doesn’t include the
federal electric vehicle tax credit that consumers get.
The $7,500 credit has made Tesla’s electric cars about $1.5 billion
cheaper in aggregate for consumers in the U.S. Some states even have extra
incentives on top of that. The Federal credit is phasing out for Tesla starting
in 2019. To be clear other companies making electric cars benefit from this
as well and Tesla isn’t the only company to get
direct government subsidies. Billions of dollars in incentives have been given
out in states across the country to attract economic development. Not a new problem and we’ve never had any federal leadership trying to stop the race to the bottom Tesla’s competitors GM, Ford, and Chrysler all received more than a billion dollars in subsidies in the state of Michigan
according to a New York Times investigation. Of course Tesla sells
fewer cars and has far fewer employees also federal fuel economy standards have
helped Tesla’s bottom line. Automakers that sell gas-guzzling cars can buy credits
from electric vehicle makers like Tesla to comply with regulations. Tesla said it
made more than $830 million in revenue from 2015 to 2017 selling these credits.
A Tesla spokesperson told CNBC: While Tesla is
helped by some incentives other government policies has held the company
back for example they aren’t allowed to set up shop to sell their cars directly
to consumers in every state. Of course government subsidies and tax incentives
are not necessarily bad by default if a government decides to invest in an
industry for the good of its citizens it has the power to do so. Many countries ,including the US, have been subsidized and clean energy in the face of climate
change. That is the crux of Elon Musk’s mission in fact on the Tesla website
there is even a constantly updated tracker that displays a total CO2 saved
by Tesla vehicles. In 2015 Elon Musk responded directly to an LA Times report
saying his company has received almost five billion dollars in government
support he called the report misleading and deceptive and defended taxpayer
subsidies. By adding up everything that’s ever happened and and including
things that will take the next 20 years to happen and then summing that into a
single number and paying today it makes it sound as though my company’s getting
some huge check which is fundamentally false the reason these incentives are
put in place is because the voters want a particular thing to happen and they
want just happen faster than it might otherwise occur.
None of them are necessary they are all they’re all helpful. Government
subsidies aren’t the only way Tesla’s got support from the government. Before
Tesla went public in 2010 it received a substantial government loan. Elon Musk
took advantage of an entirely new government initiative called the
Advanced Technology Vehicle Manufacturing Loan Program.
Tesla received a 465 million dollar loan and paid it back with interest in 2013
nine years ahead of schedule. While addressing the American taxpayer Musk
said, I hope we did you proud Ford and Nissan also got larger loans
with this program along with Fisker Automotive which went bankrupt. Musk’s
solar company also benefits from federal policy supporting solar energy. He helped
start Solar City in 2006 and it was bought by Tesla ten years later it’s now
called Tesla Energy “Nobody with a brain cell would want to put these two
together but Solar City desperately needed a bailout” People who invest in
solar energy can get a 30 percent tax credit on their costs of installation.
Tesla energy also goes after state incentives aggressively. In fact recently
it had to pay back millions to the state of Oregon for overstating the cost of
large-scale projects in order to qualify for higher tax credits. Tesla told CNBC
it provided the state with accurate information and was entitled to every
dollar of tax credits it received however it settled for $13 million and
finally: SpaceX The rocket company receives very little
in the way of government subsidies instead relying upon government contracts
from NASA, the military, and satellite companies. NASA helped SpaceX off the
ground by awarding SpaceX with a key 400 million dollar contract in
2006. Since then SpaceX has won over four billion in
additional awards from NASA launching many critical missions for the U.S. space
agency. SpaceX has also won over $600 million in military contracts it has
been on the government’s list of top federal contractors since 2013. While
that may sound like a lot of government money these contracts are competitive
bids against other aerospace companies like United Launch Alliance and Boeing.
Launching with SpaceX often cost taxpayers half as much as the money
competitors requested. Elon Musk has repeatedly tweeted thanks to NASA
recently saying SpaceX would not be where it is today without NASA. Basing
business off government contracts can be a risky strategy, but former PayPal founder Reed Hoffman thinks Musk has made it work. “Then I was
I think the second person Elon pitched SpaceX to and I was like oh you’re gonna
be doing this thing that comes off you know national government subsidies and
so forth and thought it was a disaster he was right I was wrong. So while Tesla is not
alone in going after government dollars to support its business Elon Musk has
certainly gotten some help from taxpayers along his rise to stardom

100 comments / Add your comment below

  1. F#_;k You! F&!€k you! I'm not sure really the whole point of this video for Tesla who has created so much American jobs that will be sustainable for future. Can't say tje same with oil, natural gas, and coal plants. 😱😱😱💩💩💩

  2. Waiting for your video on how the Koch brothers get paid from subsidies too. I won't hold my breath though. Just admit it already people, he made it.

  3. Alongside the FBI investigation claim released the day after the profit announcement, now I can start to see why Republicans hate you guys.

  4. What about how oil companies benefit from tax breaks? Fossil fueled natural disasters are fixed by fema. Tesla doesn’t contribute to those natural disasters because Tesla’s don’t cause climate change. Buyers get rebates because the money fuels the growth of ZEV’s and the government saves lots of money from the lower carbon footprint.

  5. Bloomberg News reported in a 2013 editorial, “Why Should Taxpayers Give Big Banks $ 83 Billion a Year?,” that economists had determined that government subsidies lower the big banks’ borrowing costs by about 0.8 percent. 45 “Multiplied by the total liabilities of the 10 largest U.S. banks by assets,” the editorial said, “it amounts to a taxpayer subsidy of $ 83 billion a year.” “The top five banks—JPMorgan, Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and Goldman Sachs Group Inc.—account,” the editorial went on, “for $ 64 billion of the total subsidy, an amount roughly equal to their typical annual profits. In other words, the banks occupying the commanding heights of the U.S. financial industry—with almost $ 9 trillion in assets, more than half the size of the U.S. economy—would just about break even in the absence of corporate welfare. In large part, the profits they report are essentially transfers from taxpayers to their shareholders.” Chris Hedges, America: The Farewell Tour

  6. If you consider corporations benefited most from tax cuts, and that most of that money went to share buybacks, and that had that money been collected it could otherwise have been slated for social services, then in effect you had a shift of money from social welfare, where it is needed, to corporate welfare, where it is not needed.

  7. Look at the timing of the video.. I think CNBC owners have a short position on Tesla.

    Not surprising since Tesla is the most shorted stock on the stock exchange.

  8. So freaking what, do you CNBC idiots know how hard it is to start up a new form of transport. Telsa should get even more tax breaks.

  9. The first time I have seen the public protect a company benefit from the tax payers' money and they are happy about that. In Elon we trust !

  10. CNBC posts nothing but biased stuff. I dont believe a word they say. Tesla and electric cars are a great thing for the future. We need to be doing everything we can to help it along

  11. GUYS LETS REPORT THIS VIDEO FOR SPAM OR MISLEADING CONTENT. PAID NEWS IS GETTING OUT OF HAND AND WE NEED TO STOP THIS

  12. Any company say like Fisker (That went bust) can and do take advantage of the same programs that are available in the market… there is an awful lot of whining about that fact that Tesla and Elon Musk have just been successful at doing that.

  13. Millions and millions of CO2 dumped in the atmosphere and this seem not to cost anything because they think people are stupid to buy this story.

  14. Is the reason for this headline that CNBC could not get Bob Lutz, Chanos or Einhorn on to say that TESLA will go bankrupt and never make a profit now after the Q3 report??

    What can we do to bash TESLA???
    AAhhh they get taxbreaks and SpaceX get government contracts.
    Very strange indeed.

    All US states try to lure new companies to their states with tax breaks.
    To get the taxbreaks they have to invest a lot of money.
    I do consider that is a bad thing since it is a race to the bottom BUT IT IS NOT TESLA SPECIFIC
    Would claim the bailouts of the financial industry and car industry was much worse.

  15. Nice that you released this after the eve of the $300,000,000+ profit announcement…FUD, who is you biggest oil sponsor CNBC and what tax breaks do you get….Thumbs down to you!

  16. I think you stated it correctly when you pointed out that Government subsidies aren’t necessarily a bad thing, and lots of other players are subsidized, including the oil industry. I think Musk also characterized it well saying that they are very helpful, but Tesla wouldn’t die without them. Partly because of Tesla, the US is a leader in the EV field, although China, France, and Germany are close oncour heels, so we can either stay in the lead or cede our lead in an pioneering industry to the rest of the world.

  17. Oh please, take a look at this: https://driving.ca/chrysler/auto-news/news/canadian-government-writes-off-2-6-billion-bailout-for-chrysler
    According to this video Tesla got $2billion indirectly? Really..really? Do you think Toyota, Nissan, GM don't get the same? But the clinch is Chrysler getting a whoping $2.6 directly. (See article attached). If you take the $2.6Billion, and divide by $7,000 (the EV subsidy), you find that Chrysler got a $7,000 subsidy for a whopping 371,000 vehicles…. Tesla has to date only built 100,000 vehicles.
    .
    Stop this discussion about EVs benefiting from Tax breaks or subsidies. All EVs need to succeed is a true level playing field. Subsidies in every form are bad.
    .
    ps: NASA would not have gotten to where we are today without SpaceX, as Boeing has been too slow and too expensive at delivering rockets.

  18. Shame on you CNBC! That is why nobody cares or trusts about traditional media anymore….ALL BIG COMPANIES GET MONEY FROM THE GOVERNMENT….Shame ! Shame! Shame!

  19. On the other side… Fracking isn't profitable and never has been, the whole industry is subsidized by governments as well as private investers, oil and gas are a whole nother level of subsidies.

  20. Fanboys. Fanboys everywhere. How hard is it to understand that Tesla gets a lot of government help PROPORTINAL TO A COMPANY THAT HAS YET TO EVEN MAKE A PROFIT? Seriously, can Americans just admit that they have a fetish for delusional Silicon Valley millionaires and all their "disruptive" snake oil? If you want to know why Tesla can get away with not turning a profit in all this time, it's because you people keep insisting your messiah Elon Musk keeps getting a pass. Literally nothing else but hype is propping his businesses up and they will crash all the harder for it, just like with any financial bubble. But in this case, a cult of fanboy NPC's is literally going to screw over millions of people's jobs and investments.

  21. The timing of this article is interesting. Tesla announces record profit and record deliveries, and this is CNBC:s takeaway?
    All while the oil industry in the US is receiving 4 billion per year of taxpayer money in subsidies. Shameful.

    https://www.nytimes.com/2016/08/06/upshot/do-oil-companies-really-need-4-billion-per-year-of-taxpayers-money.html

  22. CNBC you really are something else. Where are the videos showing tax benefits for oil and gas companies? Even Amazon gets tax benefits, but you seem to always go after Tesla. Does your CEO have a short position on the company? Or is the fossil fuel industry handing you a boat load of money to hate on Elon and Tesla?

  23. That's me at 1:10, operating the last robot of the first automated production line in Gigafactory1. I have to say, it's not like Nevada handed Tesla a billion dollar check. This was a 20 year agreement in which the state of Nevada greatly benefited. The House always wins.

  24. Let's keep in mind they only get that tax savings if they make billions of dollars. I believe it's a 1% tax savings big deal. Over 20 years

  25. Holy crap what a load of manure. US and state government enact policies that are popular things that help encourage clean air and clean water. Federal Fuel Economy standards help everyone breathe easier. Tesla is making a car that can go for a million miles with no pollution. Most EV owners have solar to power this car. Here is a good thought experiment ; imagine getting stuck in traffic jam, now imagine this is in a tunnel. Would you rather have all GAS cars spewing CO or all ELECTRIC cars with no emissions.

  26. How about expose on the current insane experiment called burning fossil fuels and being surprised when temperature goes up? How much has the latest hurricanes cost the US taxpayer ? These hurricanes are revved up with warmer air warmer water thanks to FF and Greenhouse gas warming.

  27. I'm curious how much add revenue CNBC gets from: legacy car companies, Oil companies, aerospace industry companies, and energy producers on a national and local level.

    All of whom are threatened by Musk.

    Journalistic integrity be damned, lets smear the new guy.

  28. CNBC👎🏿👎🏿👎🏿👎🏿👎🏿. Big oil gets subsidized for polluting and ruining the planet ecosystems. Tesla however is doing good by our planet and deserves all the subsidies to transition people away from fossil fuels. The more electric vehicles on the the better for our own sake.

  29. Companies like Tesla should get government subsidies and companies like Philip Morris and Exxion mobile shouldn’t. Which by the way Exxion didn’t pay any taxes for 2 years in a row and they had the most profitable quarters in the history of all companies in the world, till they broke their own record. And let’s not forget about BP and their oil spill down in the golf. I can go on about all these companies who receive government subsidies and destroy our environment and health.

  30. ELON MUSK IS THE BRIGHTEST ENTREPRENEUR OF THIS CENTURY AND ALL YOUR SMALL MINDS CAN DO IS CRAP ON INOVATION ……REALLY ……. BECAUSE YOU SUPPORT OLD INDUSTRIES THAT CAN'T COMPETE GENESES ALWAYS HAVE LITTLE IDIOSYNCRASY'S THEY ARE DIFFERENT THEN US IT'S BEEN THAT WAY EVER SINCE CAVEMEN WERE SITING AROUND THE FIRE THERE WAS ALWAYS THAT ONE GUY IN THE CORNER CHIPPING ON A ROCK WE OWE OUR WHOLE WORLD TO THOSE PEOPLE THAT THINK OUT SIDE THE BOX YOU KEEP TRYING TO PULL HIM BACK INTO THE HERD SAYING IT WILL NEVER FLY ORVILLE …..I WAS HOPING THIS WOULD AT LEAST HAVE MEANING TO THE ADULTS IN THE ROOM BUT I SEE NOW THERE ARE NONE….

  31. CNBC is trash. Also outdated since Tesla made a huge 3Q profit. Trump wants to take away the tax credits but GM is begging for them even though their CEO is a climate change denier. Could've had Gigafactory 3 in the US, but Trump's dumb tariffs forced them and other companies to build overseas. So the government isn't really bending over backwards for Tesla like CNBC makes it seem.

  32. I don’t understand why the liberal media is constantly bashing Elon??? Let’s hate on a guy who is trying to help save our planet from global warming, makes total sense

  33. This argument was told by a conservative back in 2016 because Elon seemed to be against Trump. It's amazing that the liberal news now wants to take Elon now.

  34. The FBI should investigate CNBC for criminal misleading and manipulating Tesla stock market. I'm serious! Would someone please sue this one?!

  35. Fox Business Network posted a video today (November 1) in which they compare Tesla to ISIS. The title of the video is "Elon Musk tweets about Tesla auto-pilot feature." This is despicable. I encourage anyone who believes in the Tesla mission to contact Tesla so that they know that this has happened.

  36. GM, Ford and Chrysler has received over $50 billion in subsidies past few decades!
    GM has cost the taxpayers over $11 BILLION for the 2009 bailout.
    Tesla gets peanuts. Oil companies received close to $10 billion in subsidies if you account state level.

  37. I think what needs to be paired with this story is how unprofitable Tesla is as a company. I really don’t have a problem with certain tax breaks going to a budding business that also shows it can be profitable. But that just doesn’t seem to be the case with Tesla at this time. And I don’t how many more of us should shrug our shoulders and say that this overhyped, abusive, and ultimately mediocre company should be supported.

  38. Cnbc you need to stop all this FUD !!, big oil are killing our children shame on you !! Im in the uk and I have £60,000 ready to purchase my model3, the ice vehicles are dinosaurs and are eventually doomed to die !!

  39. FACT is Tesla has the LOWEST tax incentives of any EV in America in 2018.
    TESLA made the MOST cars of any EV manufacturing in 2018 Triggering the FIRST EV car company in America to get the Full $7500 tax credit halved , and VOLT and BOLT are not too far behind.

  40. I hate stupid people. It's because of stupid people like the ones that comment about this reporting CNBC is providing facts. Those in love with Tesla need to face reality. It's like those who like Amazon but don't want to know how Amazon does business. Yet they get upset and hate it when the truth of how Amazon does business comes out.
    For those idiots. Hang yourself. Drink bleach. Enough idiots in this world.

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