Elon Musk’s growing empire is fueled by $4.9 billion in government subsidies

31 May 2015 | Author: | No comments yet »

10 impactful quotes by Elon Musk.

For the second time in two years, Tesla Motors Inc. is walking away in defeat from Texas after failing to convince lawmakers that it should be allowed to sell its $100,000 electric cars in the state.In a world where wealthy urbanites fill out comprehensive private school applications for kindergarteners, and academic pedigree is sold as the main pathway to a financially secure future, getting your kids into the same elementary school as Elon Musk’s children would be pretty exciting.

Especially in politics, any relationship between the effect of policy, the goal of policy and the stated goal is often incidental to the point of randomness. Tesla had backed two bills in the legislature that would have allowed it to bypass auto dealers and sell its cars directly to consumers in the second-largest U.S. car market.

Which naturally brings us to a new biography of Elon Musk, whose entrepreneurial energy is a marvel; the world would be better off if there were more like him, even if a “nonstop horrible” childhood was a precursor to his adult achievements. And no state more so than Louisiana, which in 2012 proffered film and TV studios $168 million in tax incentives to bring their productions to the Bayou State.

That’s why Ashlee Vance’s new biography ‘Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future’ is so captivating. “I would like to die thinking that humanity has a bright future. But with no known website or application process, the school is something of a mystery to parents who’d love to enroll their children. “I heard about it through a friend of a friend, actually from several friends of mine, who would love for her kids to go to the school,” Christina Simon, the author of a book and a blog about the Los Angeles private school scene, tells Quartz. “And then another friend said she wanted her kids to go there; I got probably 20 or so reader e-mails, they want their kids to go—’How can I get an application?’—and I don’t have the answers.” Simon tells Quartz that she first heard of the school back in September. If we can solve sustainable energy and be well on our way to becoming a multiplanetary species with a self-sustaining civilisation on another planet — to cope with a worst-case scenario happening and extinguishing human consciousness — then, I think that would be really good.” “I think there are probably too many smart people pursuing internet stuff, finance and law. It features “upstart” private companies in some 16 industries whose innovations are revolutionizing the business landscape, according to the business news network. The good news for California is that three-fifths of the Disruptor 50 are based within the state – including SpaceX, Uber, Airbnb and Dropbox, all of which are among the top 10 disruptors.

But the worry is that the advantages of starting up and growing a business in California – access to venture capital, proximity to world-class research institutions, plentiful supply of well-educated, highly skilled workers, etc. – are increasingly being outweighed by the disadvantages – sky-high taxes, onerous regulations, aggressive unions, the omnipresent threat of lawsuits, etc. This year, Georgia, Maryland and New Jersey enacted laws allowing for direct sales of Tesla vehicles and Tesla is trying to get prohibitions lifted in Arizona, Connecticut, Michigan and West Virginia. Indeed, SpaceX founder Elon Musk complained last year that California’s personal property tax – which applies to any “business supply,” including the propulsion systems the company uses to send its spacecraft into orbit – is “a devastating cost” to the Golden State’s nascent commercial space industry.

These items sell not because the moment is ripe to transition the world economy to solar but as vanity trinkets for the rich that even the rich wouldn’t buy without a large helping of taxpayer money. The Connecticut legislature is deliberating lifting its ban. “It’s kind of a joke to think that somebody’s going to come in here and ride in on a horse that doesn’t use gasoline and change the world,” said Red McCombs, the 87-year-old billionaire founder of his namesake auto dealership in San Antonio. “They’re going to have to play by the same rules that the competition plays by.” Auto dealers sell $81.4 billion worth of automobiles in Texas, second only to California, according to figures from the Virginia-based National Automobile Dealers Association. Airbnb, the web-based house-sharing service, finds itself in the cross hairs of lawmakers in Sacramento, who are considering legislation requiring the company to “hand over broad swaths of confidential, personal information to bureaucrats who will sift through it in search of potential violations of local planning and zoning laws,” blogged David Owen, Airbnb’s regional head of public policy for the Bay Area. Dropbox, the popular web-storage service, was hit with a class-action lawsuit after a computer glitch temporarily enabled access to user accounts using any password. So, I do feel joy now, but there’s still that nagging feeling that it might all go away.” “I’d never been a sports captain or a captain of anything or managed a single person.

Two years ago, he floated the idea of manufacturing an electric pickup, a modern update of the emblematic Texas transport. “When we do a pickup, it would be logical that we would do it in Texas,” O’Connell said. “It’s also logical to ask why would we invest major amounts of money in a state where we can’t even do business.” In January, two days after the start of the legislative session, Musk made a whirlwind tour through Austin. Per the new Musk biography from author Ashlee Vance, Musk’s childhood in South Africa was a hard slog—he was a victim of bullies, and his lack of interest in rote learning led him to get poor grades in some subjects even as he excelled in math, physics and computer science. He then swung by the Capitol lawn to sign autographs for a crowd of Tesla fans, some wearing “Don’t Mess With Tesla” t-shirts as they stood by their Model S cars.

Tesla hired about 20 lobbyists and spent more than $150,000 on campaign contributions between October and December of last year, according to state records. Asked in 2011 how his family produced so many entrepreneurs—Musk’s brother and cousins have worked with him at startups—Musk said, “I had a terrible upbringing. They will maintain their headquarters in Hawthorne or San Francisco or Palo Alto – much as studios maintain their lots in Hollywood or Culver City or Burbank – but much of their business will be conducted out of state. And out of the reach of California’s tax collectors and labor unions and government regulators and trial lawyers, who make this state one of the worst in which to do business.

Tesla has concentrated its presence in wealthy urban areas, such as Austin or Dallas, where it has “galleries” in malls where customers can learn about the car, though employees are forbidden from discussing prices or offering test drives. Musk hired to explore “what types of tax credits and rebates Tesla might be able to drum up around its electric vehicles,” which eventually would include a $465 million government-backed loan. As in other places, auto dealers sponsor Little League teams and Girl Scout troops, spread advertising revenue to newspapers and host victory celebrations for politicians. Their father reports that they “really love going to school” so much that “they actually think vacations are too long; they want to go back to school.” And that’s a common enough sentiment for a Musk. And how Tesla came by its ex-Toyota factory in California “for free,” via a “string of fortunate turns” that allowed Tesla to float its IPO a few weeks later, is just a thing that happens in Mr.

Musk has yet to show that Tesla’s stock market value (currently $32 billion) is anything but a modest fraction of the discounted value of its expected future subsidies. Somehow we doubt he intends to make it easy for politicians to whip away the $7,500 tax credit just when somebody besides the rich can benefit from it—in which case the annual gift from taxpayers will quickly mount to several billion dollars each year. Musk owes the taxpayer, suggested the wunderkind could be a “bit more grateful, a bit more humble.” Unmentioned was the shaky underpinning of this largess. Even today’s politicized climate modeling allows the possibility that climate sensitivity to carbon dioxide is far less than would justify incurring major expense to change the energy infrastructure of the world (and you certainly wouldn’t begin with luxury cars). Any government is going to be a buyer of services; it’s only sensible that Washington buy more of its space services from competitive private contractors rather than try to produce them in-house by NASA.

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