December 30, 2013

Tesla's Profitability Hasn't Stopped the Government Handouts

Veronique de Rugy

George Gibbs Chair in Political Economy
Summary

Tesla Motors, the fast growing electric car company, just received yet another handout from the government. The gift comes in a form of a $34.7 million tax break from the state of California to increase the company's production capacity, and it isn't the first set of subsidies that Tesla has obtained from federal and state authorities.

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Tesla Motors, the fast growing electric car company, just received yet another handout from the government. The gift comes in a form of a $34.7 million tax break from the state of California to increase the company's production capacity, and it isn't the first set of subsidies that Tesla has obtained from federal and state authorities.

So why should Tesla Motors be provided such generous advantages by the government? In Tesla's case, it is not because the company is doing poorly. In fact, Tesla managed to survive without help from the federal government for the first nine years of its existence. Recently it has been booming and its stocks soaring, making its billionaire CEO Elon Musk even richer than he was before.

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