Yesterday Elizabeth Warren went after Elon Musk on Twitter calling him out for being named Person of the Year by Time Magazine.
She called for tax reform to get people like Elon Musk paying more money and called him a “freeloader” off the America people.
This all goes back to a quote now a decade ago from Senator Warren before she ran for senate which became famous in the 2012 election “You didn’t build that!”.
Claim basically being this very backwards idea people who started multi billion dollar companies didn’t actually do it, because of the work from government in things such as roads, public schools, police and more to make it happen.
That claim has genuinely annoyed me for 10 years and here’s why Elon Musk did indeed build Tesla and at the same time did more to pioneer electric cars and reduce climate change over any person currently in the senate.
First thing to address, this lie Tesla has taken massive government subsidies.
There’s been a claim for year that Elon has taken billions of dollars from the federal government. This is completely untrue for Tesla. Elon has had billions in government contracts with SpaceX, but that’s due to them being a contractor for NASA. Making the claim businesses that provide contracts to the government are subsidized and wouldn’t exist without that would undermine most companies. Hell, Mars Foods sells over half a billion dollars a year in food to the military alone, but I’m pretty sure they’d still be able to sell M&M’s.
There’s only three noticeable subsidies Tesla has received from the federal government.
A 465 million dollar loan for electric car research.
This was a federal program the department of energy did and Tesla was by no means the biggest user here.
Ford took a 5.5 billion dollar loan over a decade ago the same time as Tesla and only started formally selling some electric cars in limited supply recently.
Tesla had the 465 million dollar loan and paid it back in 2013, six years early.
The electric vehicle credits
Tesla’s profitability has come from getting credits for selling the most electric vehicles of any car maker in the US.
There’s a requirement now that automakers have to sell a certain number of electric vehicles and get these credits.
Tesla sells these credits, because other companies underperform.
This program isn’t really a subsidy, because it’s effectively just a penalty on other companies. Tesla is the leader in electric cars and does help reduce these burdens by selling their credits.
The PPP loan
Tesla did take a PPP loan after during COVID, but they were also shut down due to a government mandate.
For this, it wasn’t something Tesla wanted to do, but they had to do it over regulatory issues, like countless other companies. If they were allowed to stay open, they’d not have had this problem.
This all goes against this narrative that Tesla only exists, because of some rogue subsidies in the government.
Every single automaker with 100 years more experience has taken more money and produced less. A lot less.
Tesla did this as a new company, where it had an investment from a guy who sold his shares in PayPal to finance it to the next level and continued to grow.
After that, there’s this whole idea tesla is a freeloader company with Elon Musk leading it.
Tesla has 70,000 employees currently.
The average salary is $77,000 a year.
If they all after deductions and so on paid 10% of their income to taxes “it’s noticeably higher”, that’d be alone 539 million a year in taxes.
Which that’s a lot lower over what the number actually is.
Tesla off of the jobs created is bringing in billions of dollars in tax revenue and has paid back any federal, state or local subsidy by a huge margin.
And finally, I just want to bring up Warren’s big quote on this claim people didn’t build their company.
Clearly Elon Musk & Tesla had a vision for electric and made it happen, where other companies had way more subsidy in the field and got nothing done.
Clearly the company has a well paid staff, which the tax revenue from them is contributing billions to schools, infrastructure and more.
But what I don’t think people get is what Liz Warren’s real claim in her quote is a decade later.
Her feeling is this idea that every achievement in a person’s life is some bill to the government.
Yes, roads exist.
Yes, k-12 exist.
Yes, other programs.
But no, those things don’t make a Tesla, Microsoft, Facebook or Apple happen.
There’s many existing companies that came before them with more resources and more access to grants/programs that’d give them an advantage over any up and comer.
They missed the mark and someone new came in and won. This wasn’t just a product of subsidy, but vision, hard work and things a taxpayer paved road wasn’t responsible for.