Posted on December 19, 2016 by Matt Pressman
Guest Blog Post: Charles Morris is the Senior Editor of Charged, the magazine of electric vehicles, for which he writes a daily blog and regular print articles. He's also written five books including Tesla Motors: How Elon Musk and Company Made Electric Cars Cool, and Sparked the Next Tech Revolution.
Since its founding, Tesla has been a constant target of skeptics, bears, trolls, haters, spoilsports, wet blankets and party poopers. Articles targeting the company range from legitimate skepticism to misleading hit pieces to bald-faced lies. And since the US election, as our president-elect details plans to make the federal government into a subsidiary of the oil industry, Tesla’s emboldened enemies have been in rare form. Just a few days ago, Rep. Mark Meadows (R-N.C.) was lobbying Trump and took a swipe at "the Tesla guy" Elon Musk and the subsidies he receives.
Above: Tesla Model S in snow (Image: Tesla)
Many of the anti-Tesla arguments center on the supposedly huge amount of financial support that the company has received from the government. The Teslaphobic tend to insist that they aren’t singling Tesla out - they’re against government subsidies for any private company. However, few if any of them mention the government largesse lavished on the Big Three automakers, and on the fossil fuel industry, both of which dwarf the government support Tesla has received. Before getting into that however, let’s clarify just how much federal financial support is currently flowing specifically to Tesla’s automobile business. And the figure is (drumroll, please): nothing.
Above: Tesla Model S (Image: Cheat Sheet)
Now, that’s not to say that Tesla hasn’t benefited from a range of government programs - it has. But, contrary to the picture painted by some naysayers, no one from the federal government has been delivering any suitcases full of taxpayer cash to Elon Musk’s private jet (or, if they have, they’ve been quite discreet about it).
An inside look at Tesla's supposed subsidies
Here are the main categories of government goodies that benefit the California carmaker. Few, if any, are specifically targeted at Tesla - they are available to any company that delivers a desired outcome, such as reducing pollution or creating jobs.
An inside look at oil and auto industry subsidies
Now, about those oil and auto industry subsidies. According to Good Jobs First, Ford has received $3.8 billion in state and local subsidies, most of it since 2010, and $27.5 billion in federal loans since 2000. Over a similar time period, GM received $5.2 billion in state and local goodies and over $50 billion in federal loans, while Fiat Chrysler scored $2 billion and $17 billion.
Above: Detroit's Big Three receives plenty government support (Image: Autoblog)
Government handouts to the energy industry are, by most accounts, orders of magnitude greater. Most oil-producing nations offer a range of financial incentives for fossil fuels at every stage of production (they also support other energy sources, including nuclear and renewables). What’s the total amount? The picture is so complicated that there’s simply no way to arrive at a figure that everyone could agree on. According to an IMF study, the global total ran to around $5.3 trillion in 2015, but this includes “externalities” - estimated costs of the environmental damage caused by fossil fuels - which aren’t direct subsidies.
Above: Carbon-emissions from dirty energy sources (Image: Financial Times)
Oil Change International produced a report in November 2015 that considered only benefits for fossil fuel production. It pegged the total at $444 billion per year for the G20 nations, or $20.5 billion for the US. Despite the fact that the G20 pledged in 2009 to reduce oil subsidies, the total increased by 35% over the next six years.
Above: The G20 and fossil fuel subsidies (Youtube: Oil Change International)
At the other end of the spectrum, articles from oil industry sources (OilPrice.com, drillinginfo) crunch the numbers in such a way as to show that the oil industry is in fact not subsidized at all, but highly taxed.