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.

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