Twitter owner and Tesla CEO Elon Musk has clarified the source of his funding for Tesla. In a tweet on Saturday, he stated clearly that the funding for his electric vehicle company came from his Paypal proceeds, from 2004’s Series A to 2007’s Series C.
Musk’s tweet was in reaction to allegations by Liberal politician Ralph Nader that Tesla was established with a government welfare grant, which is technically taxpayers’ money.
“Musk (@elonmusk) started Tesla with a huge U.S. government welfare grant. He has taken taxpayers to the cleaners for his factories and for Starlink,” Nader wrote on Friday.
However, the attempt to label Musk as a “gigantic corporate welfare king masquerading as a capitalist businessman” did not work, with the serial entrepreneur coming out to explain the source of his funding.
When eBay purchased PayPal for $1.5 billion in 2002, Musk got about $175 million from the deal. That lump sum, he said, was the primary source of the funding for Tesla. Aside from his initial investment in Tesla, he added that he gave Tesla the last of his money in late 2008.
“It was that or the company would have died,” he revealed.
“We closed that funding round at 6pm on Christmas Eve. If we had not closed that round, Tesla would have gone bankrupt 2 days after Christmas. I gave my last money thinking Tesla would probably still die, not thinking that it would be lucrative,” the business magnate continued.
Musk said the company did get some funding from the government, but the first meaningful one “was in Q2 2010 under the vehicle efficiency lending program.” That loan, he said, was paid back early with interest, adding up to “profit” for taxpayers’ funds.
“Ralph Nader, you’re lying – shame on you!’ Musk tweeted as he followed with clarification to call the four-time failed presidential candidate’s bluff.
Ralph Nader, you are lying – shame on you! I personally provided almost all Tesla funding, based on my proceeds from PayPal, from Series A in 2004 until Series C in 2007.
In late 2008, I gave Tesla the last money I had. It was that or the company would have died. We closed that… https://t.co/fi2GdWER0d
— Elon Musk (@elonmusk) February 24, 2023
The foundation of Nader’s allegations is shaky, as Musk did not start Tesla. Tesla was founded back in 2003 by engineers Martin Eberhard and Marc Tarpenning. Musk only took over as CEO in 2008 after a $6.5 million investment turned him into the largest shareholder in 2004.
Nader’s tweet put him under fire as Twitter users quickly corrected his less-than-correct assertion using the social media app’s “Community Notes” feature.
Nader you are a liar and play with the public’s bias! You also have been spreading lies since the corvair days! The other thing is that Musk payed for Tesla out of his pocket and not from gov. Financing https://t.co/EvRaJm6Wmu
— jetengineguy (@gasturbinejets) February 25, 2023
Career politician who's grifted millions from donors and taxpayers caught lying https://t.co/bsikmxffwW
— KingCharles111 Conservative Not Tory (@KinCharles111) February 25, 2023
I suggest doing some fact finding because this is really far from the truth.
— Rajiv (@realdarkromance) February 25, 2023
Even users that did not care much about the accuracy of his statement swiftly called Nader’s attention to Musk’s achievements.
And look at what @elonmusk created?
A satellite system that works better than cable
A car that revolutionize the auto industry
And all you've done for decades is COMPLAIN, creating NOTHING! https://t.co/pThc1mscoK
— Kevin Jackson (@KevinJacksonTBS) February 25, 2023
That is a lie @RalphNader & you know it.
Also, @elonmusk directly employs 110,000 people, contributing c. $400M per year in tax.
Add the people employed by Musk's suppliers & the total tax contribution is close to $900M.
The US needs more Elon Musks. https://t.co/0YqFIOeoYf
— Len Osborne (@Len_Osborne) February 25, 2023
Just like in India even in USA abusing successful entrepreneurs has become a favourite sport of some failed politicians https://t.co/1zEfNC3y2L
— Swathi Bellam (@BellamSwathi) February 25, 2023
He employs ten of thousands and innovates
You nitpick https://t.co/MzcaIOaqgN
— Hank (@HankRearden4547) February 25, 2023