This is a classic example of socializing the risk while privatizing the profits. Yes, Musk is a smart guy with plenty of great ideas and good execution. But he's also plenty good at funneling government money to himself.
This is a classic example of socializing the risk while privatizing the profits. Yes, Musk is a smart guy with plenty of great ideas and good execution. But he's also plenty good at funneling government money to himself.
The government makes these investments all the time. In fact, usually the (barely implicit) goal of government funding is to also encourage job and wealth growth. $12 million isn't much of a return, but even revenue neutral is a win for the average government investment. And, like the tax breaks to encourage people to buy the very cars the government was helping pay to produce, the idea is to help kickstart an industry that might not have the differential to self-start, but has the potential to eventually be self sustaining and bring outsize benefits compared to the investment. Basically the same reason we fund basic science research as well.
And again, this is highly selective outrage. You can disagree with the whole category of government-sponsored industry, but you have a bit of an uphill battle there. Meanwhile, there are far more "classic" examples all around, not to mention the two other major car companies that together received nearly 16x what Tesla received and have so far not exactly put in a great showing for the industry-creating change that money was supposed to help fund.
That said, the interest was low, but it was meant as a public good. Without Tesla, I very much doubt the big car companies would be pushing out their own EVs on nearly as aggressive a timescale.
They had a loan program to kick-start electric vehicles. One of their loans was largely responsible for the existence of Tesla and its ensuing success. The loan was paid back.
Should the government have been more profit-maximizing? Do we want civil servants taking large equity stakes in private companies? We fund research (both directly and through the university system) all the time with the understanding that the net benefits to society outweigh the direct costs of the programs.
AFAIC Tesla upheld their end of the bargain and society is up by quite a bit. This is in stark contrast to other bullshit that the US government has funded which is wasteful at best. War, war on drugs, war on privacy, bankers, ...