Listen to this article Government Funding Received by SpaceX and Tesla Surpasses That of NPR by a Significant Margin
Introduction
This week, Twitter is abuzz with talk of public funding. Elon Musk sparked the controversy when he labeled National Public Radio’s Twitter account as “government-influenced media.” This term was previously used to describe state-operated media outlets that shade into propaganda. Musk later changed the label to “government-funded media.” NPR, which maintains editorial independence and has a history of running stories critical of the US government, decided to leave the platform rather than accept either label.
NPR’s Funding and Response
While NPR does receive government funding through grants, the money represents less than 1% of the nonprofit’s revenue. In 2022, NPR reported $309 million in revenue, and it noted an $80,000 grant from the National Endowment for the Arts. Additionally, member stations may receive government funding that contributes to their license payments. Despite this, NPR maintains that its editorial content is independent and decided to leave Twitter rather than accept either label.
Government Funding for SpaceX
Critics promptly highlighted that SpaceX and Tesla, two of Musk’s highly prosperous firms, also receive substantial government funding both as a share of revenue and in absolute terms. SpaceX, for instance, is essentially a government contractor that has been awarded contracts worth $15.3 billion since 2003, according to US government records.Its most important businesses are launching astronauts and scientific missions for NASA, and flying satellites for the US military.
SpaceX’s Relationship with NASA
SpaceX owes its existence to NASA. The US space agency backed the rocket-maker with a critical contract in 2008, without which the company likely would have failed. Moreover, SpaceX’s business model involves working with NASA to develop space vehicles like the Falcon 9 and Dragon, which it can then offer to private customers. These public-private partnerships have saved money for the government while helping to create a surge in private space activity. SpaceX is also seeking $885 million in government funding to support broadband access in rural communities.
Government Subsidies for Tesla
On the other hand, Tesla has benefitted from a number of outright subsidies created by the US government to encourage the development of electric vehicles to reduce carbon emissions. Notably, the auto company received a $465 million preferential loan from the US Department of Energy in 2010, which it paid off in 2013. Through 2020, the company also benefited significantly from tax credits given to consumers who buy electric cars, which have reduced the cost of Tesla vehicles by $4,000 to $7,500. One attempt to track all these subsidies, including state and local incentives to support manufacturing facilities, estimates the total benefits at nearly $3 billion.
Musk’s Critique of NPR
Musk’s recent focus on NPR’s government funding appears peculiar, particularly when Tesla is striving to leverage the latest set of EV tax credits, as part of the Inflation Reduction Act, by lowering prices and guaranteeing that its batteries are manufactured in the United States. Notably, in the past, critics have censured Musk for accepting subsidies at Tesla.
Despite these experiences, Musk has never been shy about suggesting that competitors benefit from overly generous government support (sometimes with good reason). While Musk’s critique of NPR may be an attempt to drive engagement on social media, it highlights the role of government funding in the modern economy. Direct funding, basic R&D, and effective regulation often play a crucial role in the success of any enterprise.
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