August 3rd, 2020 by Johnna Crider
A common theme Tesla critics have focused on off and on for years regarding Tesla is subsidies, and it’s a popular topic again. The idea from critics is that Tesla is getting billions of dollars of subsidies and that’s why it’s a viable company. Let’s hone in on that thought and see how accurate it really is.
Before getting into that, though, let’s briefly recap exactly what Elon Musk said recently about a US government stimulus package for Americans, since this is what triggered another round of hyperventilation around “Tesla subsidies.”
Many have focused only on the first tweet, and criticisms of it have lacked the important context of the followup tweets and thus been misleading. In his thread, Elon shared his thoughts as to why a bailout wouldn’t benefit the American people. Simply put, giving free money to large corporations in a complicated stimulus package, such as the Republican plan, wouldn’t help you or me much — nor those millions who are facing eviction — while again funneling a ton of money to the richest Americans..
Bernie Sanders and Robert Reich, two of the most notable critics of Elon’s first tweet, actually have the same critique that Elon has. So, the whole controversy is based around miscommunication rather than different opinions on policy. However, they have also tagged on attacks on Tesla for having received government subsidies — subsidies and regulatory credits (which are not subsidies) that, again, Sanders and Reich surely supported.
Twitter user “JPR007” (“007”) dove deep into these waters and I am diving in with him. Let’s see just how Tesla and Elon Musk benefitted from these billions of dollars worth of subsidies and who else also gets them (besides the oil companies).
Subsidies: Tesla vs. The Other Guys
In his thread, 007 included screenshots from the subsidy tracking website goodjobsfirst.org. Here are 007’s key points:
Tesla received $0.4 billion of federal loans and bailout support via the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program. However, that amount was repaid in full with interest, almost a decade early. The federal loan Tesla received was for $465.5 million and was granted in 2010 — the first recovery year after the 2009 financial crisis. As CleanTechnica reported in May 2013, that was paid back 9 years earlier than it had to be.
While Tesla did receive a lot of aid from taxpayers, Tesla paid us back.
Tesla’s total subsidy value according to the data is $2,441,582,590 ($2.44 billion), across 109 “awards” — 82 federal grants and tax credits as well as 27 state and local awards.
The idea of a subsidy isn’t really a bad thing — its the government’s way of investing in a company. That’s how I see it, and honestly, it’s supposed to be a good thing, not a bad thing.
The idea of an entity putting money into a company, whether it’s via stocks (for example, an index fund buying massive shares in a company) or a state or local government giving tax breaks for a certain amount of time in return for a company keeping a promise (for example, moving there and creating jobs). So, keep that in mind when comparing Tesla and the other automakers below.
The Other Guys
007 also detailed which other automakers received funds from American taxpayers and whether or not they paid us back. They are:
- Ford borrowed $5.937 billion under the ATVM Loan Program. Ford still hasn’t paid that back.
- As of today, Ford has had a total of at least $33,489,841,570 ($33.49 billion) in subsidies awarded.
- Nissan borrowed $1.448 billion under the ATVM Loan Program and still hasn’t paid us back.
- Nissan’s total subsidy value is $1,955,199,450 ($1.96 billion).
- Fisker Automotive borrowed $529 million under the ATVM Loan Program and went bankrupt. We won’t get that money back.
- GM and Chrysler both went into bankruptcy and had to be rescued under a separate program.
But people are worried about Tesla, which has had the least amount of subsidies according to this tracker?
GOVERNMENT SUBSIDY TRACKER – TESLA
Website : https://t.co/MGVJt1wxIw…
$0.4 billion of Federal Loans and Bailout support
– note that this amount has been repaid in full with interest
$2.4 billion of Subsidies mostly from State and local pic.twitter.com/3JIckjJhFm
— JPR007 (@jpr007) July 31, 2020
– Fisker Automotive had borrowed $529 million and been bankrupted
– GM went into bankruptcy and had to be rescued under a separate program
– Chrysler went into bankruptcy and had to be rescued under a separate program
— JPR007 (@jpr007) July 31, 2020
Who Else Gets High Amounts Of Subsidies?
I wanted to take this to the next level and include oil companies that are currently creating products that pollute the air. As you know, pollution has been linked to higher Covid-19 deaths and also many, many other illnesses. So, let’s take a quick glance at some of the more popular brands you may be familiar with:
- Exxon Mobil: total subsidy value is $1,015,682,466 ($1.02 billion);
- Exxon’s federal loans/bailout assistance total: $3,853,988,000 ($3.85 billion).
- Chevron: total subsidy value is $117,023,474 ($117 million);
- Chevron’s federal loan and bailout assistance: $2,074,752,000 ($2.07 billion)
- Shell: total subsidy value is $1,795,683,725 ($1.8 billion);
- Its federal loans and bailout assistants total $2,686,000 ($2.69 million).
Although these companies were awarded smaller subsidy amounts than Tesla was, keep in mind that these long established companies pollute our planet and thus bodies in ways that cause all kinds of illnesses and tens or hundreds of thousands of premature deaths a year.
Additionally, they have gotten massive bailouts.
The average American may see criticisms of “Tesla subsidies” and automatically assume that Elon Musk is trying to steal their money and is getting away with it because he is a billionaire. This is simply not the case. Every year, we as taxpayers give billions upon billions of dollars out in subsidies to many, many companies. Tesla has benefitted the least from this while providing some of the most valuable products of the century, which will enable us to have a better future. That is why the government has rightfully invested in Tesla over the years — because the return on investment for society is massive.
Others companies that have been established for decades and contribute every day to deadly pollution also receive subsidies. If Tesla was not going to do so, that would put it on lower ground than the competition and make it harder to succeed — which would hurt everyone.
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