At the Feeding Trough

Aug 8, 2017

It’s hard to think of Musk’s enterprises as real businesses. Like the federal government, Elon Musk has a spending problem. In the second quarter, Musk blew through $13 million dollars every day. He lost $1.2 billion in cash. His businesses have consumed $5 billion in government subsidies. To prod the sale of electric vehicles, the federal government is paying out a $7,500 rebate on the purchase price. The state of California is offering another taxpayer funded rebate of $2,500. The only area in his company that is profitable is the sale of zero-emission vehicle credits. Some states require a certain proportion of automaker’s sales be cars that have zero emissions. When a company cannot meet the quota, they buy zero-emission credits. Tesla usually has a surplus for sale. A company so dependent upon government money would likely collapse on itself in a free market. But when the government picks winners and losers everything gets distorted.