A new report shows Elon Musk’s companies, including Tesla Motors, have taken a sizable chunk of help from governments over the years.
On Saturday, the Los Angeles Times revealed Musk’s three companies – Tesla, SolarCity and SpaceX – have been earmarked $4.9 billion in support from federal and state governments, in the form of tax incentives, loans and other subsidies.
Tesla alone has received $2.391 billion, including a $45 million loan from the U.S. Department of Energy, $517 million from selling off regulatory credits and nearly $1.3 billion in tax incentives from the state of Nevada to build the Gigafactory there.
In speaking to CNBC on Monday, Musk defended the help from governments he’s received and says it hasn’t come in the form of, “getting some huge check.”
“What the incentives do is they are catalysts. They improve the rate at which a certain thing happens.”
He says the terms of the Nevada deal are still to be determined, but it will likely come over time as Tesla invests in the battery factory and adds jobs in the Reno area. Musk also defended the incentives he’s received compared to other breaks given to industries he views as not progressive.
“If you add up all the subsidies that SolarCity and Tesla get, it is 1/1000 of what the oil and gas industry get in a single year.”
Given the tumultuous financial history of Tesla, it very likely would not exist without the support of governments Musk has been able to secure, and the company admits that. And since the onset of the recession, lots of much larger companies have received backing from state and federal agencies. But soon, Tesla will have to show it can stand on its own to silence critics and make investors rest more easily.