How much of Elon Musk’s wealth comes from government help? Virtually all of it | RNZ News

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Elon Musk has many people to thank for becoming the world's first trillionaire.<br>Photo: FABRICE COFFRINI / AFP

By Chris Isidore, CNN

Elon Musk has many people to thank for becoming the world's first trillionaire - his companies' engineers who produced technological breakthroughs, Wall Street investors who were eager to shower him with their dollars despite questionable financials, but most of all, American taxpayers and government policymakers.

"There would not be (Tesla and SpaceX) if it weren't for the government," said Ross Gerber, chief executive of investment firm Gerber Kawasaki and an early investor in Tesla.

The federal government awarded SpaceX more than US$500 million (NZ$858m) worth of grants in its early years, and that is just a fraction of what Tesla received from government grants, loans, contracts and regulatory policies.

That's not to say SpaceX's success and Tesla's roughly $1.5 trillion (NZ$2.6t) valuation are entirely due to federal spending, but both companies teetered as startups, before receiving taxpayer subsidies.

Early money propelled SpaceX

The question of how much Musk's US$1 trillion (NZ$1.7t) net worth comes from the government is not as simple as it sounds. By some measures, only a small portion of his wealth is thanks to taxpayers.

His companies have received "only" tens of billions from government contracts and programmes, but it's not just the dollar amount that matters - it's when it was received.

SpaceX's first major windfall was a US$278 million (NZ$477m) grant from NASA in 2006 to develop the Falcon rocket system and Dragon space capsule. The Space Shuttle programme was ending, and the US needed a new way to get astronauts and cargo to the International Space Station.

It was the first of more than $500 million in grants SpaceX would receive, according to data from PitchBook, which tracks the valuation of private companies.

"That was about half of their capital that they raised to that point," said Casey Dreier, chief of space policy at the Planetary Society, a public interest group advocating space flight, before the SpaceX IPO. "This was a substantial commitment that NASA provided."

While NASA has enjoyed the benefits of SpaceX's success, with dozens of humans ferried to the space station aboard the company's rockets, it didn't benefit like those private investors.

"The people who put in the other half of the capital from that era are about to be made multi-billionaires," Dreier said.

The support from NASA didn't stop with the grants. Musk has acknowledged the company was almost out of cash at the end of 2008, when it got a critical and then-unprecedented, US$1.6 billion (NZ$2.7b) contract from the American space agency.

"The fact [is] that we could not have started SpaceX, nor could we have reached this point, without the help of NASA," Musk said in 2012, when launching the company's Falcon 9 rocket to the ISS for the first time.

Falcon 9 rocket launches from Vandenburg US Space Force Base in California.<br>Photo: AFP/PATRICK T. FALLON

Regulations kept Tesla going

By comparison, Tesla has received relatively modest government contracts in the past, but it got a lot of help getting started - critical help.

In January 2010, Tesla had sold less than 2000 cars in its entire history, virtually all of them electric oddballs based on sports cars from Lotus, a relatively obscure British company.

Then Tesla received a US$465 million (NZ$798m) low-interest loan from the Department of Energy, months before its initial public offering. With the loan, the company developed the Tesla Model S sedan, its first major success.

Tesla paid back the loan early through proceeds from an additional sale of stock in 2013.

A $7500 tax credit for EV buyers allowed the company and other automakers to sell American-made EVs at a higher price than the market might have otherwise allowed.

Tesla buyers received federal tax credits worth an estimated US$3.4 billion (NZ$5.8b) before the perk ended in 2019. Tesla then cut prices to maintain demand.

Given how much it had to cut prices, the tax credit likely allowed Tesla to bring in more than US$1 billion on cars sold in America than it could have without the tax credit.

The tax credit was restored in 2023 as part of the Biden administration's Inflation Reduction Act, but Republicans in Congress and the Trump administration ended the credit across the industry on 30 September, 2025.

Tesla's most significant financial support was not from tax credits for EV buyers, but from a government programme to reduce carbon emissions across the automotive industry.

Under the regulatory framework, car companies had to meet emissions limits. If they didn't, they would have to buy "emissions credits" from companies that did comply with the limits.

The one company that...