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When the CEOs of the three Detroit based automakers used corporate jets to fly to Washington in late 2008, they were eviscerated by the national media and grandstanding politicians. Within weeks, all three companies had canceled the leases on those aircraft and all future travel by Detroit executives would be happening on commercial aircraft.

Apparently, Tesla Motors CEO Elon Musk didn't get the message. As the CEO of two companies (Tesla and SpaceX) Musk could certainly make the case that his time is too valuable to spend hanging out in commercial terminals. Musk himself has a Dassault Falcon 900, but he was reimbursed to the tune of $175,000 by the company in 2009. That much was revealed in Tesla's S-1 filing that was necessary for its initial public offering.

Musk flew to Washington D.C. at least a dozen times since early 2009 to help make the case to the Department of Energy for nearly half a billion dollars in low interest loans as part of the Advanced Technology Vehicle Manufacturing program. Without the loan money, it seems unlikely that Tesla would have remained solvent long enough to bring the Model S to fruition. Anything that benefits a company, benefits its shareholders – in this case the biggest beneficiary (who owns 38.8 percent of the company's shares) of Tesla's success will, of course, be Musk himself.

[Source: PEHub.com]


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  • 51 Comments
      • 5 Years Ago
      The whole system is a little sad. The government that can't even dream of a balanced budget has to give or loan out their borrowed money in the hope that a rich man's dream might come true... and maybe, just maybe they won't have to bail out the rich man's company on an annual basis.

      It's all going to crash at some point, right?
      • 5 Years Ago
      Bad timing to complain about Tesla Motors private planes. One crashed in Palo Alto this morning. Do you feel better now?
      http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/02/17/BA391C32O5.DTL
      • 5 Years Ago
      I don't see the big deal of him using a private jet. Tesla is a private company, so more power to him. However, since he is planning a IPO these expenditures do matter to potential investors.
        • 5 Years Ago
        That's what I'm thinking too. If the shareholders didn't have any objections (and he's obviously the largest shareholder), there's really nothing much the public can do to complain. Of course after the IPO, the public investors have a say.

        And also the intent of the automaker bailout vs the ATVM loans are completely different and it is very misleading to tie in the two in the same way. First, there is the major distinction of bailout vs a loan. The ATVM loans were approved by Congress before the recession. Then there is the fact that the ATVM loans are audited to make sure the money only goes to the construction of the factory (as far as I know). These distinctions have to be made to give context to the story.

        It seems like the media just trying to stir the pot and use sensationalism to get some hits.
        • 5 Years Ago
        All good points jake. I would call this "tabloid journalism" but I doubt the person who wrote this as any actual journalistic experience or education.
      • 5 Years Ago
      It's really time to get over the private jet stuff. With CEOs time being as valuable as it is, flying private often makes a lot of financial sense for the company. And if you use the right jet operator, the price can be a lot lower than you might think.
      • 5 Years Ago
      Dubious --- "...Without the loan money, it seems unlikely that Tesla would have remained solvent long enough to bring the Model S to fruition..."



      Unequivocal --- ...Without the loan money, it seems unlikely that GM / Chrysler would have remained solvent long enough to bring something else to fruition...

        • 5 Years Ago
        Yea, a $ Billionare "needs" YOUR money.... (suckers!)

        (and if he fails, he'll come back for more because by then he'll be too big to fail)
        • 5 Years Ago
        Neptronix, if you had actually read the link you provided, you wouldn't have spouted such nonsense. The Wikipedia article listed the private financing rounds, which came to $187 million for Roadster development, then the investment of $50 million by Daimler and the $465 million dollar ATVM loan, for a grand total of $702 million.

        A far cry from "several billion", and obviously the 465 million loan is a lot less than "1 to 2 billion"

        What GM and Chrysler got was emergency bailout loana, with the government taking majority ownership as collateral. Tesla applied for a loan from a program that had been set up years earlier, specifically designed to promote production of advanced high efficiency vehicles.
        • 5 Years Ago
        At least GM has made money at some point, unlike Tesla, who has produced what.. 1000 cars with a few billion dollars invested... and now they're setting up an IPO?

        What GM got was a cash loan until they get back on their feet. But Tesla gets 1-2 billion dollars in funding and to date has only earned 1 million dollars.

        See the facts here:
        http://en.wikipedia.org/wiki/Tesla_Motors

        I know companies take money to build, but this verges on the ridiculous side.
        • 5 Years Ago
        @ChrisM your points are valid.
        But here's where I disagree with Tesla gettin ATVM loans in the first place.

        Cause they're developing luxury cars.

        The end.
      • 5 Years Ago
      On the other hand, Tesla makes all-electric vehicles... that's still good, right?

      I know. Well, not exactly, because you're charging on a grid powered by coal. It's all bad.
      • 5 Years Ago
      That is a pretty good metaphor for Tesla. Technologically chaotic, combative, and very inefficient.

      I appreciate the fact that they made EVs fast & cool. However, as a going-concern, I have very little faith in them. They ran out of Roadster buyers, they are going to stop building Roadsters for a while, and the Model S has been pushed back to 2012. And who knows if they'll meet that 2012 date. And if they do, will they actually be able to sell these new cars for $50K?

      I have more faith in Nissan and GM.
        • 5 Years Ago
        Their IPO filing said they only had 200 people left on the waiting list. No, they didn't literally hit zero . . . but the number of interested people certainly dwindled to a handful.
        • 5 Years Ago
        They stop building Roadsters next year. If they ran out of customers as you said then production would have already stopped. They're reducing capital expenses on the Roadster (and customers have a year to place their orders) to push the Model S through the following year.
      • 5 Years Ago
      I find it rather odd that the author of the article failed to mention that Elon Musk gets absolutely no salary from Tesla Motors, while the other executives mentioned are pulling multi-million dollar salaries AND were flying on corporate-owned jets, not like Musk's own private jet.

      My office reimburses me for mileage on my car; why cant Elon Musk get reimbursed for travel expenses in his own private jet? Its not like Tesla plopped down millions to buy him a freaking jet.

      Learn how to be a journalist. This site is going the way of Fox News, and fast. This whole article is simply sensationalist garbage that leaves out the real facts in lieu of some narrative the author constructed.
        • 2 Months Ago
        "This site is going the way of Fox News, and fast."

        Great!

        -Andy
      • 5 Years Ago
      So???????

      Musk is rich and has a private jet. Don't confuse a private jet with a corporate jet.

      and....

      Don't confuse a DOE loan with a gov't bailout.
        • 5 Years Ago
        He got paid by the corporation to fly his own jet. That makes the distinction between corporate jet and personal jet academia. Tesla paid to fly Musk on a chartered private jet, just like other companies do. It just so happens that in this case instead of chartering it from NetJets or a similar company, they're chartering it from Musk himself.

        And the DOE loans have by and large acted as bailouts so far. From top to bottom.
        • 5 Years Ago
        polo, I'm not lying. Read the article on this page. Musk received money from Tesla for flying his own jet. In essence, Tesla chartered a jet from a company to fly Musk around, and the company they chartered it from is Musk's own company. So he received the money.

        It's a common thing with CEOs.

        And I reiterate, the DOE money has been given as bailouts so far, top to bottom. The program started before the recession, but the money was approved during the financial crisis. Read the press from when the monies were approved, the press minced no words, they called it a bailout. It sure bailed out Tesla, that's for sure.
        • 5 Years Ago
        "He got paid by the corporation to fly his own jet. That makes the distinction between corporate jet and personal jet academia. Tesla paid to fly Musk on a chartered private jet, just like other companies do."

        Stop lying. Not only does Musk NOT take a salary from Tesla, its his own jet. And this loan program was started in 2007, way before the word "bailout" entered the newscycle so just shut up.
        • 5 Years Ago
        The article only lists the 12 trips to Washington for the DOE loan. I'm quite sure that the $175,000 is for all the flights he made for Tesla last year. I'm also sure the value of his time far exceeds the difference between his private jet and a commercial airline. He can also do work on the airplane that he could not do on a commercial airline. He can take his staff with him if necessary and discuss confidential business without worrying about being overheard. The benefits to him definitely include the luxury aspect but are not limited to that.
      • 5 Years Ago
      Uh, check into how many MILLIONS of dollars Queen Nancy Pelosi has spent flying her FAMILY to and from California then get back to me.
        • 5 Years Ago
        I'm no defender of the Speaker, however, there are legitimate security requirements for her flying on the C-40 (which are both used Boeing Business Jets bought from Ford and are very basic, i.e. not paneled etc...).

        She can fly her husband legitimately, and must pay for her children/grandchildren. She also pays for all of her food and beverages. The commander of the unit that flies her, personally pays for the consumable items and the Speaker's legislative aide repays him and gets the receipts. In other words, it's not coming out of the ANG budget.

        It should also be noted, these planes are outfitted in ways no civilian airliner is equipped.

        Having said that, they tried to buy smaller jets and the budget request was turned down. This would have reserved the C-40s for overseas missions. There is always more than is presented by the media.

        Will John Boehnner (sp?) be accorded the same level of security if he becomes Speaker? Yes. He won't need the C-40 to get to Ohio, but the other aircraft (C-38) in the fleet set aside for Congress routinely breaks and caused former Speaker Hastert to miss meetings on more than one occasion. Perhaps then, they'll upgrade and standardize with the 89th Airlift Wing's Gulfstream 550s.

        More info at: http://en.wikipedia.org/wiki/201st_Airlift_Squadron

      • 5 Years Ago
      As many have already stated, Musk is using his own money to create an EV that makes a profit, while 2 of the big 3 went bankrupt. The government is LENDing Tesla Motors money to bring their SOLUTIONS to market sooner - SOLUTIONS that America needs to become energy independent.

      Musk is too valuable at the moment to tie up his time and risk his safety traveling on commercial airliners. Sounds like the MSM is once again jealous / resentful of entrepreneurs who enjoy greater perks than anyone other than the President of the United States.
        • 5 Years Ago
        Again, your figures are way off, Neptronix. Total invested and loaned is $702,000,000 which is about half the "one in a half billion dollars" figure you made up.
        • 5 Years Ago
        what profit?

        about one in a half billion dollars went into tesla and they have made about a million dollars to date.
      • 5 Years Ago
      Oh come now. The guy is working for $0 and working hard against all odds. He has a plan to bring a sub $30K Electric car to market and this is the only way to do it. You sell $130K cars to get off the ground. Then $60K cars to pay off equipment, become profitable and produce the numbers you need to bring down the price to around what the average working class can afford. I would rather he spend some money on a Jet and close the deal, than have the business fall through because he was held up and body searched in some airport security's back room.
        • 5 Years Ago
        Well said.

        Let's say on each flight Mr. Musk brought along himself and 4 others, a likely scenario. All of a sudden the cost of $175k breaks down to about $2900 per person per flight. That is more than 1st Class, but the flights went on time, they probably didn't spend as many nights in hotels, per diem would be lower and anyone who flies often to DC (like I do), it is a pain getting there from the West via commercial airlines. It literally takes me all day from Colorado to Washington. I can never arrive on the "travel" day and get anything done. When I leave, I always get back at best in late afternoon. I wish I could fly on a private jet, it'd save me tons of time.

        One more thought: On a private jet, you can work while you fly. So the 4 or 5 hours between the West coast and DC or NY can be spent refining issues or doing other work. This is not quite as easy on a commercial airliner with a zillion interruptions by the flight crew (which I understand is necessary, except for when they come on to report sporting scores) etc...
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