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Both Tesla and SpaceX receive heavy government subsidy. Tesla is not operating at a profit once government subsidies and tax breaks are removed. I do not consi
by peterhajas 14y ago
Both Tesla and SpaceX receive heavy government subsidy. Tesla is not operating at a profit once government subsidies and tax breaks are removed.
I do not consider significant reliance on the state for funding the mark of a great entrepreneur. Musk has a bold vision, and the tenacity to execute on it, and that is commendable. But not without significant aid.
- Vivtek 14y agoSo what you're saying is that Elon Musk isn't capable of revolutionizing two long-standing American industries (arguably the two long-standing American industries) at the same time, single-handedly and without help, and that this is evidence that he is not a great entrepreneur. I think maybe your bar is set too high.
- philwelch 14y agoIt remains to be seen whether Elon Musk can revolutionize even one long-standing American industry.
- Vivtek 14y agoI dunno, a private delivery contract to the ISS qualifies in my book. Maybe I am setting my sights too low. This is a tough crowd!
- notdrunkatall 14y agoIt's cool to be contrarian, haven't you heard?
- Evbn 14y agoWhy? He negotiated some funds from the state. They aren't insuring his entire business.
- gfodor 14y agomain quality of an entrepreneur is resourcefulness. think about that for a second.
- aik 14y agoHe's not paying everything out of pocket, therefore he is not a great entrepreneur? My understanding is that great entrepreneurs find ways to distribute the risk.
- stretchwithme 14y agoGreat entrepreneurs, in my opinion, Deal with others peacefully. They don't use the power of government to force people to invest. Or "distribute the risk" (a euphemism for overriding people's choice over what risks they choose to take). Our government distributes enough risk to me already, while letting the pseudo entrepreneurs keep all the upside. That's the reason all those credit default swaps made by Goldman Sachs and others were paid for by the taxpayer.
- codeulike 14y agoMany big American companies receive government subsidies - either directly or via military/gov spending. Its the smart market to be in. "48 companies that have received more than $100 million in state grants since 2007." http://www.nytimes.com/interactive/2012/12/01/us/government-incentives.html#co-generalmotors http://www.nytimes.com/interactive/2012/12/01/us/government-...
- mikeash 14y agoWhat's the difference between that and getting a similar amount through VC?
- tlholaday 14y agoWhat percent of the defense budget is a subsidy to the petrochemical industry?
- adastra 14y agoThat's not correct. The US government doesn't subsidize SpaceX, it purchases launches and technology. It's just a customer. And it buys those things for much cheaper than before. You as the tax payer are actually saving money compared to what NASA and the DoD were spending on the big contractors.
- steveklabnik 14y agohttp://news.yahoo.com/nasa-selects-spacex-boeing-sierra-nevada-commercial-crew-165300568.html http://news.yahoo.com/nasa-selects-spacex-boeing-sierra-neva...
- jessriedel 14y agoThere's no sharp distinction between selling to the government as your sole customer, and subsidies. One bleeds into the other, and it's nothing like an efficient market against which one would hope to measure entrepreneurs.
- Ankaios 14y agoThe government is not their sole customer, and SpaceX is not the government's sole supplier for any space-access service.
- loceng 14y agoWhat happens to the other car manufacturers if we remove their bailouts?
- rayiner 14y agoTesla recieves a subsidy to offset the implicit subsidy received by other car manufacturers, because doing the straightforward thing and banning all pollution is politically impractical. If you added the cost of global warming and people poisoned by oil refineries to the price of gas cars, tesla wouldn't need a subsidy.
- twoodfin 14y agoIndeed. I think a recent IMF study suggested the U.S. would have to raise taxes $500B annually to account for pre- and post-consumer 'subsidies', mostly to compensate for externalities. In U.S. budget-ese, you describe costs over a 10 year span, so that's a "$5 trillon tax hike". The point being that the EV subsidy is small potatoes. I still think it's a bad idea. Tax the gas. Let producers and consumers figure out how to use less, and let governments figure out how to compensate for the regressiveness of the tax.
- dllthomas 14y agoCompensating for the regressiveness is easy: give it back in cash.
- twoodfin 14y agoHow much and to whom? Some poor people drive a lot. Some poor people don't drive at all. EDIT: Also, you can't just give it all back. As long as emissions continue at something near current levels, you have to spend it on amelioration. It doesn't just become a slush fund.
- specialist 14y agoSo? Governments are the source of all wealth. Subsidies, tax breaks, issuing debts, give aways (pork), purchases, loans, war profiteering, patents, etc. Everything. Government even protects people's property rights. Without governments, there is no wealth. Personally, I'm quite proud that the US Govt is funding alternate energy, electric transportation, and space exploration. Many of the past investments have worked out quite well. I'm bullish about these investments too.
- dkokelley 14y ago> Governments are the source of all wealth. I have to disagree on that. Governments are the arbiter of most wealth, via taxation, subsidies, spending, the court system, etc. "Wealth" comes from production, transformation, and trade. I've taken a tree and nurtured it so that it produces fruit. The world is now one fruit-producing tree wealthier. I trade fruit with my neighbor for wool, because I value some quantity of wool higher than I value some quantity of fruit, and my neighbor values the fruit more than the wool. We are now each wealthier for trading something we have in excess for something we do not have. The government then takes some of my fruit to feed the soldiers defending my land. Government's role in the economy is mandatory trade for the benefit of the society as a whole. I must provide fruit to the soldiers whether I want to or not. Sometimes there is a net gain through these trades (see space exploration, for example). Other times the gain from this trade is disputed (see California's high speed rail project).
- crdoconnor 14y agoSpaceX is a supplier to the US government. That is not the same thing a subsidy. They're actually saving them money. Tesla is a recipient of government subsidy, but you pretty much have to operate in the auto market. Everybody else (big auto companies, big oil) are the recipients of massive subsidies too.
- varjag 14y agoTrue, subsidized means a portion of the cost is absorbed by other party. SpaceX provides a service the customer needs at a competitive market rate. It is not much different from how Lockheed-Martin operates.
- revelation 14y agoThey received 450M$ to build a luxury vehicle from scratch in two years. In the same program, other companies got 1B$ just to retrofit some fucking factory.
- danieldrehmer 14y agoThe subsidies are a problem, but help to balance the fact that the government isn't taxing emissions properly