Adapted by:
Miguel Jorge
WriterJournalist. I've spent more than half of my life writing about technology, science, and culture. Before landing here, I worked at Telefónica, Prisa, Globus Comunicación, Hipertextual, and Gizmodo. I'm part of Webedia's cross-section team.
Karen Alfaro
WriterCommunications professional with a decade of experience as a copywriter, proofreader, and editor. As a travel and science journalist, I've collaborated with several print and digital outlets around the world. I'm passionate about culture, music, food, history, and innovative technologies.
As head of the Department of Government Efficiency (DOGE), Tesla CEO Elon Musk’s current mission is to cut the U.S. federal budget by $2 trillion. It’s a staggering figure, especially given the current $7 trillion budget. As a result, a conflict of interest wasn’t far off for someone whose companies include Tesla and SpaceX. However, The Washington Post has revealed what may be the greatest paradox of the world’s richest man.
Building an empire with $38 billion. According to the Post, Musk’s rise to become the world’s richest entrepreneur has been closely tied to financial support from the U.S. government. How much? At least $38 billion in contracts, grants, loans, and tax credits for his companies over two decades.
Put another way, Musk is one of the biggest beneficiaries of taxpayer dollars. While he has promoted an image of disruptive innovation and entrepreneurial independence, his success has depended on key government investments at critical moments for Tesla, SpaceX, and other companies in his ecosystem—investments, or government largesse, that he now paradoxically seeks to reduce through DOGE.
The Tesla case: from collapse to dominance. In 2008, when Tesla faced serious financial problems, Musk lobbied for a $465 million loan from the Department of Energy, which was critical to producing the Model S and purchasing its factory in Fremont, California.
Without that support, the company would have collapsed. Tesla has also received $11.4 billion in regulatory credits for selling carbon credits to other automakers, a crucial factor in its profitability in key years. Although Musk has criticized government subsidies for consumers, his company has been a significant beneficiary of tax credits for electric vehicle purchases.
But there’s more. Since its founding, Tesla has received billions in state and local incentives, including $1.3 billion in Nevada for its battery factory and $750 million in New York for the failed SolarCity, which Tesla later acquired. Musk moved Tesla’s headquarters from California to Texas in 2021 despite these gains, citing a more favorable regulatory environment.
The SpaceX case: contracts to dominate space. Since its creation in 2002, SpaceX has relied heavily on contracts with NASA and the Department of Defense. Before its first successful launch, the company had already received $278 million from NASA in 2006 and a $1.8 billion contract in 2008 to deliver supplies to the International Space Station. Government investment allowed SpaceX to develop the Falcon 9, now the mainstay of its business, and to benefit from defense and spy missions for the Pentagon, some classified and worth billions.
In 2024, SpaceX generated $9.3 billion in revenue from its Starlink satellite internet service. However, it remains dependent on federal contracts. Despite its growth, analysts say privileged access to government funding has allowed the company to leapfrog competitors such as Boeing and Lockheed Martin in the aerospace industry.
Musk and subsidies. According to the Post, Musk has publicly advocated for eliminating government subsidies, criticizing President Joe Biden’s anti-inflation law—ironically, a measure that allowed Tesla to regain tax incentives. While he claims his company is self-sufficient, his success has relied on a model that combines government investment and private capital. This strategy has allowed him to consolidate Tesla’s and SpaceX’s leadership without the same risks other entrepreneurs face.
Professor John Helveston of George Washington University noted that “pretty much every aspect [of Tesla] has benefited from direct government subsidy or financing,” making Musk’s rhetoric against government subsidies contradictory. At the same time, his push to reduce subsidies across the industry has affected startups that rely on the same kind of support Tesla had in its early days.
The role of the U.S. government in Musk’s empire. Despite his libertarian rhetoric, Musk continues to benefit from multimillion-dollar government contracts and preferential access to government programs. Over the past five years, nearly two-thirds of the $38 billion in public funding that has boosted his companies has come from new contracts or incentives.
With 52 active contracts with agencies such as NASA, the Department of Defense, and the General Services Administration, his connection to the government remains a cornerstone of his business success. While his influence and fortune have grown exponentially, his relationship with the government remains ambivalent. He criticizes government intervention in the economy but continues to receive financial support that has cemented his empire.
In this context, Musk isn’t just the richest entrepreneur on the planet—he’s also one of the biggest beneficiaries of public spending in the U.S., the very spending he wants to cut.
Image | Gage Skidmore
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