In the case of Tesla, the Los Angeles Times calculated last year the upstart automaker had received $2.4 billion in taxpayer-funded subsidies, mainly from California (where it is headquartered), Nevada (where it is building the biggest lithium-ion battery factory in the world), and the federal government. SolarCity, the Times calculated, had received $2.5 billion in subsidies — mainly in federal assistance for solar installations and New York state support for building the biggest solar-panel plant in the Western Hemisphere in Buffalo.
And then there is SpaceX, a supplier of launch services to NASA, the military and various commercial customers. SpaceX has not received much in the way of subsidies, but its survival depends very much on government contracts — over $6 billion in awards for resupplying the International Space Station, launching military satellites, and supporting various other missions. If all goes according to plan, SpaceX will begin lofting U.S. astronauts into orbit before the end of the decade, displacing Russian rockets that have been doing that since the Space Shuttle retired.
However, there is good reason to believe that all will not go according to plan — not just for SpaceX, but for the rest of Musk’s empire. In the case of Tesla and SolarCity, the fact that President-elect Trump has appointed a climate-change skeptic to lead his transition team at the Environmental Protection Agency speaks volumes about how federal priorities are likely to change on the energy front. Trump has pledged to cut off money for United Nations climate-change programs and lift regulations limiting exploration for fossil fuels.
With SolarCity already facing financial troubles, the disappearance of federal subsidies could prove fatal. Musk has moved to preempt a crisis by folding the solar-services provider into Tesla, but Tesla could soon be facing its own problems. So the second explosion of a SpaceX rocket in less than two years just as the general-election campaign was moving into high gear couldn’t have come at a worse time. SpaceX’s main U.S. competitor in the launch business, United Launch Alliance, hasn’t lost a single rocket since it was founded over ten years ago.
Boeing and Lockheed Martin, the co-owners of United Launch Alliance, both contribute to my think tank (Lockheed is a consulting client), so I’ve been getting an earful for the last few years about the risks of relying on low-cost launch providers to get into space. Those risks will become a lot more politically potent if SpaceX is allowed to begin lofting astronauts using a proposed fueling technique that would require the crew to be sitting on the rocket while the fuel is loaded. The spectacular explosion of a SpaceX rocket on September 1 occurred while the vehicle was being fueled.Read more "Will Elon Musk’s SpaceX Crash Land On Planet Trump?"