Tesla CEO Calls for Carbon Tax

By · March 26, 2012

Tesla Model S

Tesla CEO Elon Musk says it was Daimler's investment—not its DOE loans—that saved the startup automaker and made its IPO a success.

When Elon Musk, Tesla's chief executive officer, spoke during the opening session of The Wall Street Journal’s ECO:nomics conference in Santa Barbara last Wednesday, he offered his views on government subsidies. "The DOE [loan] was a helpful catalyst," said Musk. But he noted that it didn't determine the automaker's fate.

According to Musk, Tesla was "saved by Daimler," and not by loans from the Department of Energy. Musk further claims that Tesla Motors didn’t need the federal government's loan to survive, but took it to help stage the automaker's initial public offering. As Musk said, the IPO would have occurred anyway, though "it wouldn’t have been as good."

Musk stated that the best method for addressing climate change in the automotive industry is to impose a tax on carbon dioxide emissions. Instead, the government indirectly subsidizes the industry by making incentives available for the purchase of green automobiles, including electric vehicles. "The ideal would be to tax CO2," said Musk.

According to Musk, government subsidies aren't necessarily good, but sometimes they're useful in helping a company move toward success. Musk addressed criticism of government subsidies by saying the loan program should award funding based solely on technologies. It should not be used to pick winners and losers in the automotive industry.


· · 6 years ago

Most subsidies, laws and regulations and taxs are there to promote petrol business and avoid anything else. These few battery car putch are just false pr done by the industry to calm down the ones opposing petrol use, this it just pr and it won't displace any petrol use and the ones buying an electric battery car are just waisting their money. if you take into accounts all the cost of driving a battery car and the limited range and long and arduous recharging time, it then cost 10x the money for a given millage compare to a gasoline car.

This guy, e musk is a puppet from the oil industry. It's goal is to sustain petrol industry in reality but do false pr to cover this with inneficient battery electric car. These battery car are a planned fail so the oil industry is not compitionned by anyone, it's a total cartel controlling goverments, industrial investments , industry, military and banks, religion like scientology and catholic, medications, spaceship technologies, etc. They even try to control biology with gene modifications on plants, humans, etc.

· · 6 years ago

Much as I like EVs, I think they need to win fairly and not through lawyers and legal tricks. Artificially inflating the cost of gas cars isn't going to fool anyone and it may cause such an uproar (particularly now) that it will end EVs for good. Electric car prices need to be brought down from the $40k's through legitimate innovation like metal lithium batteries rather people stealing money from their neighbors through bogus tax hikes.

I can see diverting tax subsidies from big oil to EV rebates. That makes sense since the silly subsidies are already there. However, taking from the gas-driving family that can't afford a new car and maybe not even their home mortgage is not right.

· · 6 years ago

Hmmm . . .

Unmarked black helicopters currently circling over your house, Gorr? I like to propose conspiracy theories from time to time myself, but this one really takes the cake.

· · 6 years ago

tterbo: the trouble with not having an emissions tax is that the gas-driving family down the street (and everyone else, myself included) is spending our environmental capital without accountability. Most people won't care about the crap they dump into our common air tank unless it affects their bottom line. Higher polluting cars currently have an unfair advantage in the marketplace because the real costs of their use are not directly billed to the manufacturer or end user.

· · 6 years ago

@ gorr: Can you back up even one of your claims with anything resembling fact, data, or a reliable source? I very much doubt you can. You might want to loosen the tin foil hat a little.

· · 6 years ago

I think a carbon tax is reasonable in theory but very difficult to implement. The CO2 emitted by my Zing depends upon where I charge it and whether I choose to drive it on gas or grid power. In Georgia, (a very high coal use state) it works out about the same either way. In New Hampshire, charging from the grid would be far better than running it on gasoline. In North Dakota, (the highest coal usage state) it causes less CO2 emissions if I run it on gasoline.

If the taxation is federal, then it seems that a grid average lbs/kWh figure should be used. People who live in states like NH or who have rooftop solar cells would complain, however. Very difficult to come up with something that everyone would think is fair.

· · 6 years ago

@ Ken Fry - No one who has solar should complain about a carbon tax. Such a tax would not happen on the vehicle level. If you buy electricity from a utility your electric bill would contain the tax based on the way the utility generates its electricity that you use. If you buy gasoline for your vehicle the tax would be included on the price of the gasoline. The idea is to try to get all parties to move more to carbon free energy sources via price pressure. Ideally the funds would be used to promote renewables, such as deploying charging stations or increasing grid capabilities to allow for renewable energy to be moved from where it is generated to where it is needed.

· · 6 years ago

There is a much more sell-able approach to this: simply make drivers pay for the cost of obtaining their gas. This would include: first and foremost the military budget for obtaining the world's oil - pay for with a gas tax surcharge; elimination of all direct and indirect subsidies including special tax treatments - oh, and while we are at it, the maintenance of the interstate highway system - and leases of government lands at below market values, etc, ad naseum.

The military budget would have to include the full cost of caring for those who fight (and survive) to put gas in our tanks as well as the victims of the collateral damage from the War on Terror (or whatever it is called now).

· · 6 years ago

world2steven: nicely put!

· · 6 years ago

According to Musk, Tesla was "saved by Daimler," and not by loans from the Department of Energy.

I have to admit I am a fan of Tesla but I have a problem with that statement. I don't know why companies always have a problem admitting the government helped them out. Daimler brought $80 mil to the company, the DOE brought $465 mil not to mention money given to suppliers, including Daimler Chrysler, researchers, infrastructure, and so on.

Well I hope this doesn't become a sign of the future in which this company forgets where it came from.

· · 6 years ago

@Ken Fry: I think (although obviously "view differ" as always) that "carbon tax" here means, on everything, including electricity generation.

This means that any kWh you buy off the grid have their carbon tax already included, paid by whoever generated them in the first place (and that cost passed on in the wholesale price which affects your retail price, etc.). Since gasoline is burned by the end user, the carbon tax is most appropriately charged "in the IC engine", but anywhere upstream from there would again suffice: at the pump, or at the wholesale distributor, or at the refinery / during import.

Paying a carbon tax on fuels burned to make electricity also has the interesting (and good) side effect of accelerating the shift away from coal, which puts out more carbon per kWh than any other large industrial source.

· · 6 years ago

The best place for a carbon tax is right at the source. The coal mine, the oil rig, the incoming tanker, the extracted fracturing gas. No need to go further down the chain. If you tax it right at the source there is no single end user that can escape. The effect on the electricity grid would be a rush away from fossil fuels and towards renewable energy. Suddenly, hydro projects, wind parks, geothermal, solar, biomass generation would become profitable because there is no carbon tax on those renewable energies. Today with free pollution, we are in exactly the opposite situation and we sustain major fossil polluters.
On Tesla side, I am surprised they are involved with Daimler since that company slashed the Swatch car as it was intended to be an electric by its creator. Daimler is also controlled by Deutsche Bank which is controlled by the Saudis. Lots of questions there indeed. The theory of a showroom EV to avoid real market breakthrough gets suddenly more credit with this Daimler presence at Tesla. Not a good thing at all, it is better to have them out of the company as soon as possible.

· · 6 years ago

@ Chris T:

Yes, I think that would be a good approach.

· · 6 years ago

"The best place for a carbon tax is right at the source. The coal mine, the oil rig, the incoming tanker, the extracted fracturing gas. No need to go further down the chain. If you tax it right at the source there is no single end user that can escape."

Well put Prius Maniac

I heard a great idea to do just .
Start at the source as it hits port or comes in a pipeline from Canada.
Make it small at first, $1.00 per ton of CO2, crank it up over time to adjust to CO2 production.

The KEY would be to not give it to EV drivers or solar start ups directly.
The KEY would be to give to the American consumer: divide all that income by 300 million and we all get a check thanks to the FF companies.

Take ALL the revenue and hand it back to each citizen.
Of course the gas oil coal FF companies will pass along the cost to the consumer but that is OK. As any price increase would be offset by a nice quarterly check the government gives to each citizen. Moreover as the price goes up and up Hummer sales go down and down and EV sales would go UP UP UP

Thus wind solar geothermal BioMass (my local favorite) options look better and better to Utilities Municipalities Homeowners.

Carbon capture startups would get a LOT more funding if coal plants knew they could capture and safely store carbon and avoid the tax.

Keep it simple Stupid

· · 6 years ago

tterbo -

Listen to what these others are saying please. You are implying that subsidies are good if we all pay unfairly into a system that allows everybody to drive a polluting automobile. The idea of a carbon tax is not to "tax" people unfairly. It is to get them to pay what their product currently costs our society. Should we be using public money to make gasoline use more attractive? Should we be consuming our children's resources and polluting our environment so that every man woman and child has an equal chance at driving a gasoline car? We cannot make rational decisions about our energy or transportation if we don't pay the full costs. Right now we subsidize gasoline and everybody is happy about that because of the false idea that it helps the poor people keep driving their cars. When we subsidize EVs, or we tax carbon, far too many people cry foul.

A carbon tax as Musk suggests might not be the best plan. But somehow we need to show everybody what their decisions actually cost. Right now we're hiding it. EVs are not too expensive. Gasoline is (artificially) too cheap.

· · 6 years ago

In case anyone didn't notice "gorr" is a well known nut job who usually trolls over at Autobloggreen.

· · 6 years ago

Thanks JRP3. I wasn't aware that his reputation preceded him. I'll stop responding to his nonsense (in other threads).

· Bill Howland (not verified) · 6 years ago

Its amazing to me how many otherwise intelligent people have opinions on subjects they are both neither expert in, nor sufficiently researched. While I respect Mr. Musk, his agreement with the likes of Ken Lay, Al Gore (inventer of the Internet), GE Jeffrey, and, let us say, Big Banks raises a very Big red flag. It would be interesting to see if he was 'encouraged', either through 'help' from General Electric, et al, to publicly voice an opinion. Unknown at this point whether $ are involved or not.

I much prefer Carlos Ghohn's position: "Its not whether I believe in Global Warming, or whether I don't believe in Global Warming, that's not the issue. The issue is that people expect Nissan to provide these products (eg: Leaf)". Mr. Ghohn has kept his personal views heretofor to himself. To me that is very satisfying.

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