Elon Musk’s mission at this time, at least in doge, is Cut the budget of the Federal Government of the United States in two billion dollars. It is not, obviously, a trivial figure, but rather amazing if we take into account that this budget currently amounts to 7 billion dollars. Hence the conflict of interest of a person who has Tesla or Spacex among his companies, It hasn’t taken long. Yet, The Washington Post has just revealed The, possibly, the greatest paradox of the richest man in the world.
An empire with 38,000 million. It told the environment that the rise of Musk as the richest entrepreneur in the world has been deeply linked to the financial support of the United States government. How much? With At least 38,000 million dollars in contracts, subsidies, loans and tax credits for their companies over two decades.
In other words: Musk is one of the biggest beneficiaries of the taxpayers’ coffers and, although the tycoon has promoted a disruptive innovation and business independence, its success has depended on the Government’s key investments at critical moments for Tesla, Spacex and other companies in its ecosystem, as we will see below. Investments, o generosity of the State, which now paradoxically has the mission of trimming.
The case of Tesla: from collapse to domain. In 2008, when Tesla faced serious financial problems, Musk pressed to obtain A loan of 465 million dollars of the energy department, an amount that was fundamental For the manufacture of Model S and the purchase of its plant in Fremont, California.
Without this support, the company would have collapsed. In addition, Tesla has obtained 11.4 billion dollars In regulatory credits for selling carbon bonds to other automotive, a crucial factor for their profitability in key years. Although Musk has criticized government subsidies For consumers, your company has been one of the main beneficiaries of fiscal credits for the purchase of electric vehicles.
But there is more. Since its foundation, Tesla has also received billions in state and local incentives, including 1.3 billion dollars In Nevada for its battery gigaphal and 750 million dollars in New York For the Failure SolarCitywhich was then absorbed by Tesla. Despite these benefits, in 2021 Musk moved the Tesla headquarters of California to Texas, arguing a more favorable regulatory environment.
The Spacex case: contracts to master space. Since its creation in 2002, Spacex has depended largely on Contracts with NASA and the Department of Defense. Before achieving its first successful launch, the company had already received NASA 278 million dollars In 2006 and then A contract of 1.8 billion dollars In 2008 for the transport of supplies to the International Space Station. Government investment allowed Spacex to develop Falcon 9today the pillar of your business, and benefit from Defense and Espionage Missions for Pentagonsome of them classified and valued at billions.
In 2024, Spacex generated 9.3 billion dollars In income from your service Starlink satellite Internetalthough it continues to depend on contracts with federal agencies. Despite their growth, analysts point out that privileged access to government financing has allowed him to overcome competitors such as Boeing and Lockheed Martin in the aerospace industry.
Musk and subsidies. They remembered in The report of the post that Musk has publicly advocated The elimination of government subsidiescriticizing the Biden Inflation Reduction Law, the same that Ironically made Tesla would qualify again For tax incentives. In this way, while maintaining that your company is self -sufficient, its success has been based on A model that combines State investment and private capital, a strategy that has allowed it to consolidate the leadership of Tesla and Spacex, but without the same risks that other entrepreneurs face.
In this regard, the Professor John Helveston From George Washington University, he pointed out that “every aspect of Tesla has been promoted by subsidies and public financing”, which makes Musk’s rhetoric against government aids It is contradictory. At the same time, its impulse to cut subsidies throughout the industry has affected emerging companies that depend on the same type of support that Tesla had in its beginnings.
The role of government in the Musk Empire. The truth is that, despite his libertarian speech, Musk continues to benefit from multimillionaire government contracts and preferential access to state programs. In the last five years, almost Two thirds of the 38 billion dollars In public funds that have promoted their companies have been granted in the form of new contracts or incentives.
With 52 active contracts with agencies such as NASA, the Department of Defense and the Administration of General Services, Your connection with the government It remains a fundamental pillar of its business success. Although his influence and his fortune They have grown exponentiallyits relationship with the government remains rather ambivalent: while criticizing state intervention in the economy, it continues to receive the financial support that has cemented its empire.
Under this context, Musk does not seem to be only the richest entrepreneur on the planet, but also one of the biggest beneficiaries of public spending in the United States, which now promotes cutting.
Image | Gage Skidmore
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