Government subsidies helped Elon Musk attain $13.3 billion net worth

Robert-Downey-Jr copy

Robert Downey, Jr. at Comic Con 2012. Taken by Mayank Naruto.

In the Iron Man motion picture saga, as well as the Avenger movie series which is also produced by Marvel, the wealthy industrialist Tony Stark is a troubled genius and an astoundingly successful businessman. He attends glittering evening soirées accompanied by beautiful women, somehow becoming more likable as he grows more flippant. This brusque demeanor belies the fact that he becomes increasingly concerned with a growing threat facing all of humanity, in his case the appearance of the Chitauri, a destructive alien race that almost levels New York City. His incessant desire to develop super weaponry that can protect the world almost destroys his romantic relationship and taxes his personal health during the course of Iron Man 3.

An April 2010 piece published in TIME and penned by Jon Favreau, director of Iron Man and Iron Man 2, reveals the fact that major aspects of the Tony Stark character created by Robert Downey Jr. are based upon Elon Musk. The South African-born entrepreneur, who holds dual citizenship in both Canada and the United States, is lauded by the film director as a “rocket scientist,” a “green pioneer” and a “Renaissance man” over the course of a mere 188 words. Elon’s business ventures as CEO of Tesla Motors and SpaceX and their intended impact on humanity over time is closely aligned with the fictional Stark and his determination to protect civilization as he knows it.

In the Netflix drama House of Cards, a different wealthy industrialist plays a large role in the events leading up to Frank Underwood’s ascendance to the United States presidency. His name is Raymond Tusk. Tusk, played by actor Gerald McRaney, is a magnate of the energy industry who uses his ties to business interests in China and his personal relationship with President Walker to create a political victory for Walker and greater wealth for himself. His inability to do so creates a scandal that leads to Walker’s resignation and Tusk’s own downfall.


There are those who have wondered aloud whether similarities in the names “Raymond Tusk” and “Elon Musk” may have some greater significance, further punctuated by the fact that both are, in a sense, leaders in the energy industry, albeit the fact that only Musk serves as such in real life. Although the strong correlation between Musk and Tony Stark actually exists, any perceived link between Musk and Tusk is probably just conjecture. However, there are aspects of Musk’s relationship with the United States government which have been seen as troubling by some, namely the reliance of Musk corporations on government funding in order to achieve their wild success. Somewhat more insidious is the fact that Musk is potentially using government funding in order to increase his own personal wealth. As of June 3rd, Elon Musk’s net worth was $13.3 billion.


“Elon Musk – The Summit 2013” by Heisenberg Media – Flickr: Elon Musk – The Summit 2013. Licensed under CC BY 2.0 via Wikimedia Commons

To Musk’s credit, he has not denied that his companies received substantial government assistance, and it seems as though he’s never refuted the amount of money he has received, which one reporter for the Los Angeles Times pegged as high as $4.9 billion when accounting for public assistance to any of Musk’s companies. In Musk’s mind, the benefits that his corporations pose in the form of new age technologies and well-paying jobs more than make up for the public investment into his business activities. He’s also keen to point out that his companies would still be in business without government assistance, a point that is nearly impossible to prove. Further, he sought to deflect inquiry by pointing out that the incentives his company has received “are a tiny, tiny, pittance compared to what the oil and gas industry receives every year.”

Whether the money Musk’s companies received was a subsidy, or an “incentive” as he prefers to call it, there is no doubt that $4.9 billion goes a long way in  helping finance his Stark-ian business ambition or continue enjoying a party lifestyle. Consider Tesla. Musk bought into the company with a $6.35 million investment made in 2004, shortly thereafter becoming Tesla’s chairman. In 2010, the company received a $465 million loan through a U.S. Department of Energy program which had funded such impressive energy industry failures as Solyndra and Fisker Automotive. Tesla made a big to-do about the fact that the company was able to repay the DoE loan in full in May 2013, nine years before it was due. However, Tesla wasn’t able to repay the loan based on profits from sales; it instead relied on Goldman Sachs to drum up hundreds of millions of dollars that same month by managing a four million share issuance of common stock as well as $660 million in convertible notes. So the company paid for debt with debt. A myriad of other public subsidies can’t be hurting the company. These include a $7,500 federal tax credit for purchasing a Tesla vehicle on top of thousands of dollars of income tax breaks offered by a couple of states.

The Powerwall home energy technology recently released by Tesla Energy, a newly created division of Musk’s company, is hoping to reach a larger consumer market with the help of public funding. Federal tax credits will take 30 percent off of the purchase price of the battery. Again, state tax credits compound the public assistance that will spur private sales for Musk; California, for instance, is offering an additional tax credit of 60 percent of the purchase price. If you live in the right part of the country, you could almost write off the entirety of your Powerwall home battery purchase. Currently, Tesla technologies utilize battery cells developed by Panasonic, which itself receives subsidies from the Japanese government through its New Energy and Industrial Technology Development Organization. When Tesla finally opens up Nevada’s Gigafactory, which is receiving $1.25 billion in public assistance from that state government’s over 20 years, it will have a steady stream of battery cell technologies subsidized by American public dollars.

Government contracts through NASA have been extremely profitable for SpaceX, perhaps the most ambitious of Musk’s projects, one which he hopes will lead towards the eventual colonization of Mars. In August 2012, SpaceX won a $440 million grant from NASA to design and develop the next generation of the space shuttle for bringing human passengers back into orbit. Last September, NASA awarded SpaceX $2.6 billion for certification and safety testing of its Dragon space capsule. It bears mentioning that Boeing received $4.6 billion from NASA in that same round of funding and both awards were approved by the Government Accountability Office in January after a challenge was filed by Sierra Nevada Corporation.

One might think that, with all of this reliance on the public coffers, an educated guess could be made as to Musk’s political leanings. It might come as a shock for some to learn that, politically, Musk seems to be most well-respected in libertarian circles, a demographic that is not comfortable with the idea of government handouts. The 2012 edition of the Atlas Summit, a conference for those who believe in the libertarian principles espoused by Ayn Rand, held a panel on SpaceX and the future of space travel during which panelists couldn’t help but draw parallels between Musk and John Galt, the protagonist of Rand’s Atlas Shrugged. In 2012, almost half of Musk’s $74,200 total political campaign contributions went to Obama Victory Fund 2012 but he also spent thousands of dollars on Republican candidates like former U.S. Senator Scott Brown, Congressman Dana Rohrabacher (R-CA) and Sen. Marco Rubio (R-FL). In 2014, Musk’s two biggest donations went to the National Republican Congressional Committee ($32,400) and a campaign fund for Sen. Kevin McCarthy (R-CA) ($30,000). Yet there were significant members of the Democratic Party receiving campaign contributions from Musk, including Sen. Cory Booker (D-NJ), Sen. Dick Durbin (D-IL) and Congressman Dutch Ruppersberger (D-MD). Musk certainly wants to fashion himself as a realist but, ultimately, he is a pragmatist who is very good at picking winners.

What’s most troubling to us here at IPWatchdog is the fact that Musk is trying to make a loser out of the American patent system. We’ve reported on Musk’s negative view of patents, which he has portrayed as stumbling blocks that get in the way of truly meaningful innovation. Many of our readers will know that nothing could be further from the truth. As we discussed, many of Musk’s ventures have continued to apply for patents even though he maintains that he has avoided patenting any technology since he left Zip2, a former business venture, in 1999. Once again, the pragmatic Musk has been able to paint himself as Musk the idealist in a very successful manner.

Applying for a patent to bring a useful innovation to the commercial market is an honest and open way to create personal wealth in the United States. Tesla co-founder and former CEO Martin Eberhard has suggested that the government subsidies received by Elon Musk haven’t been vital for their survival, to be sure, but they’ve allowed Musk to grow his businesses into incredibly profitable empires within a few years’ time. They’ve also allowed Musk to protect his personal share of his companies without having to dilute his share of corporate holdings to grow his personal capital.

Strip away the storied, somewhat fictional elements of Musk’s idealistic pursuits and Elon Musk is Raymond Tusk. He’s an incredibly practical man who knows how to build political goodwill and cash in on it. His bright ideas might effect positive change in our world, but he is in business to make a profit, not solely to save the environment. So far his companies have been good enough to draw a profit while avoiding the scandalous fate that has befallen other governmentally funded enterprises that have been unable to deliver on their promises. However, if he is unable in the future to keep robbing Peter to pay Paul, as it were, the next thing that should follow is a precipitous fall from grace.


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Join the Discussion

13 comments so far.

  • [Avatar for mark]
    July 30, 2015 08:19 am

    Elon has a brilliant mind people just get jealous

  • [Avatar for Cheerful Clips]
    Cheerful Clips
    June 13, 2015 04:01 pm

    The real problem with Elon Musk is that he thinks up new cool stuff and then he gets it done.

  • [Avatar for boris smith]
    boris smith
    June 10, 2015 03:34 pm

    Nice article Steve. Unfortunately many people love to be ruled over tyrants and tycoons, which is why you’re seeing such nonsensical pushback in your comments. Elon Musk is a fraud of a different sort.

  • [Avatar for Steve Brachmann]
    Steve Brachmann
    June 10, 2015 12:26 pm

    @Jacques – Solar City in Buffalo is still under construction, so it has only impacted construction employment as of yet. The latest reported number of total workers at the construction site is only 250 as of this April:

    I’ll even grant you, it’s too early to be making a judgment call on how New York State’s $750 million in public assistance (data from link above) will impact jobs in the region. However, if you’re asking me now to take an account of what’s happened in my own backyard, I’m seeing $750 million in public funding underwriting a total of 250 jobs. There are expectations that this number will rise and impact both the construction and manufacturing sectors, but those are still just expectations at this point, not realities. Solar City isn’t manufacturing anything right now, so that doesn’t help your point. This sounds like something you’re going to have to grin and bear for a little while yet.

  • [Avatar for Gene Quinn]
    Gene Quinn
    June 9, 2015 07:10 pm


    You say: “The UN has posted tens of thousands of research hours saying climate change is real.”

    Would you champion the UN position if they spent tens of thousands of hours researching and concluded that the sun rises in the West? Of course not, because it wouldn’t be true. So why then would you ignore the scientific fact and rely on the UN, which just so happens to be one of the most corrupt organizations on the planet?

    Did you read the article that explains in painstaking detail how and why global warming is not happening? Curious you would look to the UN but ignore what has been published by Scientific American, or the Ice Core temperature data from NASA that dates back 400,000 years.

    As for the oceans, you are aware that over 100 million gallons of oil seep into the oceans from the ocean floor every year, correct? Burning fossil fuels has nothing to do with that oil seeping into the oceans.

    Finally, I notice you did not offer any insight into where all the water is going. If global warming is really happening like you and others say then where is the water going and why aren’t the oceans rising?

    It is an inconvenient truth I know, but if you actually look at facts the picture is perfectly clear. That you choose to ignore scientific fact and rely on a corrupt organization speaks volumes about your integrity and intellectual honesty.


  • [Avatar for jacques poirier]
    jacques poirier
    June 9, 2015 06:37 pm

    Mr Brachman,
    I must say that your ‘deeply shallow’ analysis of Elon Musk did not please me one bit. I will grin and bear it if you give me an honest appraisal of the impact on jobs in Buffalo NY, your town, of the Solar City manufacturing project. Give us some reliable number and analyse fully the cost to American taxpayers for each job created considering all ancillary contributions to the economy. I will read it with great interest, as if you do it well (can you?), this would be the proof of the pudding of what you developed in today’s article that has so many of us irritated.

  • [Avatar for Steve Brachmann]
    Steve Brachmann
    June 8, 2015 02:23 pm

    @Lars – To quote from the article in question, “Climate change is definitely happening.” So we’re not denying anything there. I’d accept some form of factual critique of what has been written here and elsewhere but you’re not able to offer that right now. We, however, have offered a couple of articles which provide a reasoned analysis of these topics using factual evidence. Elon has lied publicly about his patenting activities and continues to be duplicitous in his stance on patents. The assertion that Elon is using government funds to improve his personal wealth is one we’re reporting but it comes from the previous Tesla CEO. And even if you’ll “gladly see the feds spend [your] tax dollars on this,” are you presuming to speak for every American citizen? Regardless of what you think the appropriate altruistic choice should be, there are some who disagree, and we’ve done so while presenting a great deal of factual evidence in support of our argument. Your passion on this topic is evident but it needs more substance.

  • [Avatar for Lars]
    June 8, 2015 01:11 pm

    Gene Quinn,

    The UN has posted tens of thousands of research hours saying climate change is real. Neither do you need much of a brain to realize that our earth is suffering from what we do. Even IF the climate was not to change dramatically from burning these fuels we would still have to make changes. Our oceans are getting more acidic, smog is filling the air, and mountains of plastic trash are floating in the pacific. Other species die off due to our encroachments and deforestation is speeding up. People are not nuts to see this and have a wish to change it. Ridiculous and proves why your website is not worth reading.

  • [Avatar for Gene Quinn]
    Gene Quinn
    June 8, 2015 10:35 am


    Here is why you are completely wrong…

    You say: “We need renewable energy and a sustainable development. Our planet can’t take this crap for too long…”

    This is the same type of alarmist reaction that we have seen in the environmental movement for the past 2 generations. By now we were supposed to run out of oil, the seas were going to rise and engulf cities all over the globe, food production would cease, rivers would dry up, temperatures would rise uncontrollably. Of course, exactly none of that has happened and for the past 17 or 18 years there has been no evidence of global warming. Further, if the ice melting is so problematic where is all the water going given that the seas never rise?

    Really, if alarmism is your response you need to inform yourself of the real facts and science rather than buying into the lies spewed for the purpose of crippling economies. You can start to inform yourself by reading this:

    Next, you admit that Tesla has received federal government loans, which is proof that they have received government assistance. It should be obvious to anyone who is paying attention that the government goes not go around loaning money to just any company. So even if they paid it back that is huge assistance to get going that is not available to other businesses that can actually return a profit.

    You say: “Alluding to the fact that Elon is conspiring to take their money is deceitful and wrong.”

    The article is factual. He has been willing to take government assistance and that has undoubtedly assisted his companies and him personally. I’d be happy to take $5 billion in government assistance, as would virtually all business owners. Of course, that money isn’t available to most businesses.

    You say that Musk is not “some blood sucking villain,” which is correct. It is also correct to observe, however, that Musk has greatly benefited from generous government assistance. It is also correct to observe that Musk has outright lied to the public and the press on a variety of issues, as we have covered here on He says he has to get patents to stop the competition, but that is simply false. If he were really altruistic all he would have to do is publish the research and development. Given that the U.S. is a first to file system that would prevent anyone from getting a patent. So a defensive patent portfolio is wholly unnecessary any more.


  • [Avatar for Steve Brachmann]
    Steve Brachmann
    June 8, 2015 09:08 am

    @Sherm and @Lars – The private capital that was drummed up to pay back the Department of Energy loan was financed by Goldman Sachs. As I point out, that’s paying for debt with debt. Sure, that can work, but wouldn’t Tesla ideally have the private sales to repay the loan and not need financing? It was, however, a great PR move because if Tesla defaults on Goldman Sachs, that sounds a LOT different than Tesla defaulting on the DoE.

    @Lars – He’s not taking public money and doing nothing with the funds. He is building his businesses but doing so in a way that prevents him from diluting his share of his companies. So the government funding is, in a sense, making him a wealthier person: Tesla, SpaceX et. al. become profitable more quickly and that’s going to be reflected in his CEO salary and the company’s stock price.

    @Glen – 1. I’m not sure you’ve read much of my writing on this website if you feel that I don’t think that there is any “opportunity to dream” in this world. The Companies We Follow series on this site may follow larger corporations but I have seen a great many imaginative technologies in software, robotics, electronic contact lenses, autonomous vehicles and much, much more. 2. Elon Musk isn’t receiving pennies, he’s gotten billions. It may be fewer billions than other companies or industry sectors which are subsidized, but it’s not pennies. It’s billions. And, having pointed out Musk’s political contributions and activities, is it not possible that he could himself someday, if he has not already, become one of those protected cronies who get bailed out? 3. The Iron Man/Elon Musk link isn’t nonsense; I invite you to click on the TIME link provided in the second paragraph to this article and see how Iron Man director Jon Favreau makes that case himself. The Raymond Tusk correlation for the most part is my own invention, you’re right, but I saw some distinct parallels that I felt should be mentioned.

  • [Avatar for Glen Eric Huysamer]
    Glen Eric Huysamer
    June 8, 2015 06:21 am

    All around the world people are watching Mr Elon Musk deliver on endeavours that are charging up a massive inspirational wave. While the author seems to be attempting to hack away at pennies against a dream; a new dream that is having humanity come to the realisation that amongst all the absolute nonsense that is going on in this world, there is still opportunity to dream, create and focus on a better tomorrow in spite of the stagnation, corruption, ideological and theological religious dogma and fanaticism that has permeated humanity. Thieving politicians, corrupt governments, fraudster ‘banksters’ that leach off society for commissions for moving other peoples money.
    ‘Penny’s’ is what Elon Musk receives from the public compared to what has been going on around the world with regards to other industries, in reality, these contributions by the government may merely serve as a token amount. Just in case Elon Musk breaks through the critical mass factor with regards his vision which he openly advertises.
    A society that is less reliant on oil being only a start. Something every ‘westerner’ definitely desires.
    What we seem to have here is an author lobbying for the old school, attempting to rubbish the name of an industrialist who has lived past the American Dream. Whose roots although born in Africa are now encompassing the world by inspiring young minds and old minds and encouraging dreamers to once again believe in humanity.
    This funding that he received compared to the trillions that fraudsters received to be bailed out, cep’s who steal their bonuses from the tax man, equivalent if not more than what Elon Musk has earned through incentives.
    Let us be real here, and ask the question.
    Should he not have received more money from governments, in reality from the tax payers?
    If one looks at Elon Musks ‘entertainment’ value alone and his legendary rise from the shores of South Africa to his dual citizenship in both Canada and the USA, his inspiring journey to fortune and fame across the entire globe.
    He makes us all beg the question what in fact are we all doing with our lives?

    Here we have an ‘author’ trying to start a ‘pull from grace’ as if this is what the public should expect.

    Mr Musk is leading a possible way forward for all of humanity. Is it about the money, of course it is, because, be it that critical mass is reached and the adoption of his technology is accepted as mainstream, many more companies are going to be calling for bailouts from the tax man. And government’s leaching politicians will once again opt to bail out their cronies.

    The fact is Elon Musk is making many governments, and other industries look a little silly with their lack of abilities to move forward with technology. Many old school corporations have become so top heavy with fake decision makers and overpaid CEO’s and management nothing seems to ever get done. They pay for protection racket type government interventions, that close down newer industries to keep the status quo on monopolies, all at the expense of the society. The tax paying society.
    What has America become because of this; to the world out here, we see war mongering industrial weapon makers, exporters of military hardware, stealers of the minds of young youthful minds, who if they do not join the ‘USmarines’ become hamburger packers for McDonalds, Packers or Cashiers at Walmart. And what happens here, these people struggle for minimum wage. While companies like these receive government aid that makes Elon Musk’s token amount received from government look like penny’s.
    These penny’s would have left the USA for the USSR anyway if Dragon was not supplying the international space station.

    The author should in reality look at himself, and at least appear to be more freaking American in his essay about where American money is being spent which in this case is in America.

    And really………Iron Man… is all good and well to create a legend of sorts but this is nonsense by the media as a whole. If we talk about falling from grace then all this media nonsense about Iron Man = Elon Musk= somebody call Tusk in a television series. Get real man.

    Elon Musk is not some imagination that is happening. He is freaking real, he has an inspiring story and the world watches him and the majority are hoping that the man succeeds in every endeavour he touches and that all that he has already achieved is only the beginning.
    Soon he will be old, we all will be, and unable to push forward with the possibilities that this man from Africa puts forward to the world and all of humanity. He has made life less boring and for that maybe we should give him his due. Those that profess his falling from grace, to those we should say, keep your head up there.

  • [Avatar for Lars]
    June 8, 2015 04:04 am

    This is why the author is completely wrong:

    1. Tesla received a clean energy loan from the federal government set to be paid back. And yes, it was all paid back, $465 M to be precise. He paid it back, so what’s the big deal?
    2. California is ravaged by smog and health problems related to the car industry. They give these grants for (1) improve public health, (2) improve the environment and (3) incentivise the growth of renewable energy. These tax credits are not direct losses. The intangible benefits outweigh the costs by large factors. Alluding to the fact that Elon is conspiring to take their money is deceitful and wrong.
    3. Nasa pays hundreds of millions per flight. Either they pay ULA or go to the Russian with their Soyuz rockets. Spacex is bringing this cost down 1/10 with the use of renewable rockets. In other words. the government can launch their satellites 10 times for the cost of one!! See the whole picture please. Nasa can actually pay for the satellite with the money they spend from the flight.

    3. We need renewable energy and a sustainable development. Our planet can’t take this crap for too long and we need to rid ourselves of our dependency on fossil fuels. Morally, ethically and idealistically this is what needs to be done. I’ll gladly see the feds spend my tax dollars on this.

    4. During peak hours the electrical grid charges the most money from the consumers. Supply and demand states that(under normal circumstances), competition will even out prices and bring down profitability. This equilibrium does not exist in the utility sector. The utility companies in CA are strangling the consumers(PG&E to name one). By storing energy during the day and selling it back to the grid prices will eventually even out. We need batteries for this. Also we’ll use less coal and gas to create that energy.

    This article was biased and really one sided. I don’t blindly follow Musk’s command, but he is not some blood sucking villain stealing my $$.

  • [Avatar for Sherm]
    June 7, 2015 05:31 pm

    LOL stupid. Tesla gets a $456 Million loan from the government and that’s evidence of what exactly? That they can’t compete with such free market enterprises like GM and Chrysler that were bailed out by the federal government to the tune of several billion dollars at the same time? When Tesla got its $456 million, Ford in the exact same loan program, received $5.9 BILLION to retool its factories. The fact that he drummed up PRIVATE capital to pay it off early is not enough for the author because…well he never really goes into why. Just that a 12 year old car company should by now be able to compete with 100+ year old companies that regularly receive much larger subsidies and bailouts from the government?

    And SpaceX is a contractor for the government. Of course they receive money from the government to launch government payloads into orbit for the government. ULA, by contrast, has received large payments even when not launching payloads because the government does not build its own rockets and can’t afford its only certified launch contractor to go out of business. SpaceX is changing that.

    And Tesla is still patenting its technology, but they are making the licenses much easier to obtain. Tesla has spent a lot of money building a network of charging stations across North America and Europe. They would benefit enormously if other companies adopted Tesla technology that was compatible with those stations, and allowing the open-source propagation of Tesla’s power system goes a long way to achieve that end.