Elon Musk, the world’s first trillionaire, owes a significant portion of his wealth to government help. Both SpaceX and Tesla, his flagship companies, have received substantial funding from the federal government. According to Ross Gerber, CEO of investment firm Gerber Kawasaki and an early investor in Tesla, ‘there would not be (Tesla and SpaceX) if it weren’t for the government.’

SpaceX’s Government Funding

SpaceX received over $500 million in grants from the federal government in its early years, including a $278 million grant from NASA in 2006 to develop the Falcon rocket system and Dragon space capsule. This funding was crucial for the company’s survival, with Musk acknowledging that SpaceX was almost out of cash in 2008 before receiving a $1.6 billion contract from NASA.

Tesla’s Government Support

Tesla also received significant government support, including a $465 million low-interest loan from the Department of Energy in 2010. The company used this loan to develop the Tesla Model S sedan, its first major success. Additionally, Tesla benefited from a $7,500 tax credit for electric vehicle buyers, which allowed the company to sell its cars at a higher price than the market might have otherwise allowed.

Tesla also generated significant revenue from the sale of regulatory credits, which accounted for nearly 25% of the company’s revenue in 2008 and 10% of its revenue over the next five years. The company’s ability to sell these credits was due to its compliance with federal emissions regulations, which required other car companies to purchase credits from Tesla to meet their own emissions limits.

While Musk’s wealth is largely due to government assistance, it is also tied to Wall Street’s faith in his companies. The value of Tesla’s shares is based on Musk’s promise to deliver widespread self-driving ‘robotaxis’ and humanoid robots, a promise that has yet to be fulfilled.

Original reporting: KRDO (Colorado Springs metro) — read the source article.