Elon Musk has some very important investors in his companies – government subsidies.
Whether they are state or federal government subsidies, Elon Musk’s companies have benefited from an estimated $4.9 billion in taxpayer support.
According to Los Angeles Times reporter Jerry Hirsch, Elon Musk’s companies rely on this public-private financing model for growth.
So is it a good deal for states, including Nevada? Or, will taxpayers be stuck with the losses if Tesla Motors or Solar City fail?
Hirsch said Musk's companies all have some kind of link to public funds. He pointed out it is not always a direct link but it is there.
As an example, when someone buys a Tesla car, she will get a $2,500 tax break from the state of California and a $7,500 tax break from the federal government.
But, dozens of other companies do the same thing every year -- from Boeing getting breaks from Washington state to stay to companies getting public money to build stadiums.
According to Hirsch, the thing that makes Musk different is the scope of the government help he gets.
“What Elon is doing is taking advantage of a whole range of these programs and probably doing it better than anyone else,” Hirsch said.
Nevada is giving Tesla $1.3 billion in tax breaks and incentives to build its battery factory in northern Nevada. It is money Nevada won't see back immediately, but the hope is the state will see the return through jobs and overall economic boost.
While most politicians are bullish about the project, Hirsch is reserving judgment.
“It’s neither a bad deal or a good deal at this point. It’s a wait-and-see deal that may pay off,” Hirsch said.
Ashlee Vance wrote a biography of Musk and said that while the CEO is shrewd about getting money and benefits from the government, he is genuine about helping humanity advance.
Vance sees the subsidies as a win-win for Musk and for the advancement of technology.
“The government has tried to spur this technology along and Elon has taken advantage of it,” Vance said.
Musk is playing a high stakes game with taxpayer dollars, which in the end could be funding failed projects.
“He plays this incredibly high stakes game almost at all times,” Vance said.
Jerry Hirsch, Los Angeles Times; Ashlee Vance, Bloomberg, and author of "Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future"
