If I cared about subsidies, I would have entered the oil and gas industry | Alternative Energy | Forums

He does make a point

Elon Musk says his companies don't need the estimated $4.9 billion they enjoy in government support, but the money will help them move faster to transform the dirty business of energy.

"If I cared about subsidies, I would have entered the oil and gas industry," said Musk, the chief executive of Tesla Motors and SpaceX and the chairman of SolarCity.

Musk's remarks came in response to a Times story detailing his corporate strategy of incubating high-risk, high-tech companies with government money — estimating the total received or pledged so far at $4.9 billion, a figure Musk did not dispute. The story noted that his companies have seen a big financial upside from the incentives — helping them build billions in stock value — while taxpayers have shouldered the cost.

The companies at first did not respond to repeated requests for comment about subsidies, but Musk on Monday granted The Times a wide-ranging interview on government money for his companies and their competitors; Tesla's struggle to produce an affordable electric car; and the reasons why his companies are not profitable.

The Times' estimate of government support comprises a variety of incentives, including grants, tax breaks, factory construction, discounted loans and environmental credits that Tesla can sell. It also includes tax credits and rebates to buyers of solar panels and electric cars. The companies have already received large sums and will get more over time as they meet milestones in deals with certain states.

"All three of these businesses get government subsidies and contracts, but none of them get much in the way of profit," said Mark Spiegel, a hedge fund manager for Stanphyl Capital Partners who is shorting Tesla's stock, a bet that pays off if Tesla shares fall. "He is going in to cutting-edge, fringe industries."

Musk said Tesla and SolarCity are tied together by their mission to help the environment. Tesla's electric cars and SolarCity's panels aim to accelerate the development of clean power, he said.

"Ultimately, humanity has no choice but to transition to renewable energy," he said. "It is just a question of when and how much damage occurs between now and that transition."

Government money for Tesla and SolarCity helps speed that transition, Musk said.

Musk called SpaceX an "insurance policy" in the case of an environmental catastrophe. Its rockets, he said, will help colonize new planets.

"We should become a multi-planet species," Musk said.

Musk said the subsidies for Tesla and SolarCity are "a pittance" compared with government support of the oil and gas industry.

more http://www.latimes.c.....tml#page=1